Are you considering buying off the plan for your next property?
The thought of buying a property before it has been built is exciting and the fact that you will have a NEW never before living in home is even more exciting.
It can be cost effective as developers usually only require a 10% deposit but may be as low as 5% or as high as 20% and then the balance will be paid on the completion of the build.
Are you familiar with interpreting plans? Will the rooms be big enough? Will you be purchasing in a good position of the building if you are looking at apartments.
If it is an investment – what is the market going to be doing in 12 to 18months times when the build is complete?
Stamp duty may be discounted, depending on when you buy. If construction has not started then the stamp duty is payable in the land value and not the finished property.
Getting in early may mean that you secure a great deal as developers need to sell a certain number before they can gain the finance they need.
Often the property increases in value while it is being built as the price of property grows over 12 months or more of construction.
The developer may not actually manage to get the build complete and you may lose your deposit if they happen to go bankrupt. Make sure you gain legal advise and do your research about the developer.
Often lenders will not fully approve your finance until the build is complete.
The final product may not be what you expected when you purchased off the plan.
Buying off the plan is not for everyone. It can be better suited to investors who have time to wait and as they are not planning on living there, the process can be better. Saving on stamp duty and the potential of the property increasing in value are two big positives.
Ensure that you get good advice and do your research before you commit to any purchase.