As an investor buying an off-plan property can be a lucrative one when done right. However, there are uncertainties that can come with buying an off-plan property and taking certain steps can help minimize risks and give you good returns as an investor.
The first and most important step to take is to do Due Diligence on the developer – its important to know the developer of the project you are looking into;
•Who is the developer?
•What is their background history? etc.
Usually, a developer who has a good track record of delivery and delivers to the standard they presented when selling is a good place to start from. Taking the time to learn more about the developer can give you true insight and throw light on the direction to take.
Once you get your due diligence done and you feel confident, it’s good to go in.
With a positive outcome of your due diligence, you may decide to invest in the property, once you do, it’s good to get in on time as one of the key advantages of buying off the plan is the increase in value you can gain on your investment.
You will find that there is increased demand for a development once it’s completed, this is when the late adopters come in and the early bird investor can make some good gains if they choose to flip. Once completed the price value is significantly higher that the off-plan price.
Another advantage that comes with getting in on time is the flexibility you get to spread your payments. Depending on how early you get in and the construction duration, you get to spread your payments over a period of up to 2 years without paying interest; meanwhile you will continuously make gains on your property, as you would have locked in the early bird price even though the property continues to increase in value with the development progressing, mastering this can be very lucrative.
This eases pressure on the investor compared to having to pay upfront for a ready-built building.
Another inside note is that developers are usually happier to give discounts at the off-plan stage. The lower the sale price the higher your gains when the project is completed.