If you are thinking about investing in real estate, you may not have considered off the plan property buying options. When you purchase 'off the plan', you are building a property which is yet to be constructed. The major benefit of doing so is that you pay current market rates. If the housing market is performing well, this means that by the time you move in, your house will have already gained value. If you're tempted by this, below is a guide to everything you need to consider before you invest.
1. What are you investing in?
When you purchase a property that has already been constructed, it is pretty clear where your money is going say you can ask for a viewing so that you can inspect the building yourself. However, when you purchase 'off the plan', it isn't so clear. The construction company or property developer should include plans which outline the property which they plan to build.
If the property is a multiple occupancy dwelling, the contact should also clearly state which apartment you are purchasing. However, it is unlikely that these plans will contain a great amount of detail. You should also be aware that most 'off the plan' contracts give the developer the right to make changes to the design of the building without consulting the people investing in the property.
2. How long will the project take to complete?
The majority of 'off the plan' contracts will offer the property developer flexibility when it comes to estimates on how long it will take to complete the project. However, you should check if there is a particular date which is listed by which the contractor aims to complete the building work so they can hand over the property to the buyer. If this date is breached, the contract may allow either the buyer or the developer to pull out and cancel the deal. If this occurs and you have made a deposit, this will be returned to you.
3. How will you finance the 'off the plan' deal?
It is likely there is going to be a lengthy period of time between signing an 'off the plan' contract and the day on which the project is completed. You will, therefore, need to think carefully about how you can access long-term finance as many high street mortgage lenders will approve open-ended loans. In this case, it may be best to approach a specialist lender.
For more info, contact a real estate agent today.