A property that is off the plan simply means that it has yet to be constructed. Potential home buyers can see the design and building plans to get an idea of what it will look like. Early adopters are often able to take advantage of financial incentives offered by the developers.
Property investors and first homeowners benefit as buying a property under these circumstances offers numerous advantages which include:
- Stamp duty savings
- Ability to customise finishes
- Substantial capital gains potential
- Choices in apartment types
- Only a small deposit require
- More time to find a mortgage
But the risks also need to be taken into consideration.
The most obvious is that you will be unable to move into the property until it is completely finished. Another risk is that property values can drop. If this happens, the buyer is still obligated to purchase at the original price. However, buying off the plan can still be beneficial.
Below are tips to follow when buying a property off the plan as a first time home buyer.
- Get Your Finances in Order: The first step is to get all your finances in order by understanding how much you can realistically afford and how a mortgage would fit in with your current financial position. Speaking with a lender is strongly recommended to help you assess your finances.
- Look At Different Plans: Now that you have a better idea of what you can afford, the next step is to look at off the plan properties. Never make an impulse purchase as it is a good idea to get a better feel of the area. After all, this may very well be the home you spend the next 10 to 20 years in.
- Research the Developer: Who is developing the project? It is strongly recommended to inspect the quality of previous properties from the developer. This gives you a much better idea of what to expect and whether you are working with a reliable developer.
- Get Legal Advice: Seeking assistance from a specialist is advisable to protect your interests in the event the deal turns out to be not what you expected. Reviewing the contract with a lawyer is strongly recommended to better understand the terms involved.
Although there are certain risks involved, there are numerous advantages to buying a property off the plan. This includes helping you save a great deal on your first home. If you any additional questions, contact us today and one of our representatives will be happy to help.