Off Plan Property Investment

What does Buying Off Plan actually mean?

`Buying off plan' means a leap of faith because you are buying a property that hasn't yet been built. You are, literally, buying the property off a plan. This `plan' will generally contain details of the layout, the square footage and the specification of the property.

It is the developer's job to tempt you into taking that leap of faith and part with your cash. In order for them to do this, there will generally be a marketing strategy which will involve glossy brochures, high profile advertising, models of the proposed development, computer generated images and an `all singing, all dancing' show flat. The purpose of all this glitz is to make their product look as attractive as possible, in order to lure you into investing in their development.

Seeing through the glitz

It is your job to investigate all the areas, when buying off plan, that will maximise your `property profit potential'. A glitzy package may not always represent the best investment.

Why Buy Off Plan?

The principle reason to buy off plan is to achieve a discount of around 20% off the market value of the property. This is generally possible, especially in a rising market, because the property is only in the construction or pre-construction stage at the time of purchase. This will mean that there is a `lead in time' whilst the property is being built, which will last until construction is completed and the property is ready for occupation. This `lead in time', can vary from a year or more, depending on the construction schedule.

How do I know if I am getting the off plan property at a discount?

Research the price of similar properties in the same location. If you consider that the developer is asking too much of a premium for the off plan property, let them know that you have done your homework, researched the area and that you consider their price to be inflated. Be prepared to put in an offer below the asking price - the worst they can do is refuse it and if they don't refuse it, then you've got a property at a reduced price.