What is buying off the plan?
Buying off the plan involves entering into a property contract before the building has been constructed. Most new apartment blocks and townhouses are sold in this manner, presenting investors with the opportunity to secure capital gains long into the future at today’s prices.
What are the advantages of buying off the plan?
- Developers generally sell off the plan apartments at a reduced rate. It is often much more cost-effective to purchase properties at this stage to avoid the larger price tag assigned to properties that have been constructed.
- Properties bought off the plan have an extended settlement period. While you pay a deposit to secure the property, you only settle when the apartment has been built giving you plenty of time to research and secure a suitable loan deal. You may also have the added benefit of earning interest on the deposit held in a trust account until settlement.
- You can take advantage of rising market prices and secure capital gains before you have even settled.
- New apartments allow you to claim depreciation as a tax-deductible expense.
- New apartments boast the advantage of minimal mid-term maintenance as appliances are generally covered by a manufacturer’s warranty, and most buildings are covered by a builder’s warranty.
What should I do to ensure I get a good deal?
- Buy from a reputable developer. Ensure the developer has a solid reputation within the property industry. Research how successful past projects have been and consider whether the company is well-known and trusted. Visit past developments where possible.
- Ask to inspect samples of the fittings and finishes so you know you are getting what you pay for.
- Consider location. As with any investment property, location, location, location is the key to success. Some key features to look for include proximity to schools, shops and cafes and easy access to public transport.
- Assess the floor plan. Look beyond the price tag and size of the apartment. Sometimes a 70 metre squared apartment might be more profitable than one that is 80 metres squared if it makes better use of space. While these two apartments would command similar rent, the smaller one is likely to cost less at the time of purchase and therefore will be a more lucrative investment.
- Visit the development site and assess the location. Consider what the view will look like from your apartment.
If you have any further questions about the benefits of buying off the plan, please feel free to contact our office and talk with one of our experienced sales people.