Why Buy Off Plan Property?

Why Buy Off Plan Property?

Off plan investment refers the act of reserving a property as much as two years before the scheduled construction date. The advantage to you, as a property investor is that you can secure the property at a price well below the market rate, once construction begins on the property the value inevitably increases.

The property developer is contractually required to sell a certain number of units before construction may begin. In fact, the bank will only insure the property development upon the guarantee that a percentage of the units will be sold before construction may begin. As a direct result large discounts are available to promote early off plan sales.

It is also important for investors to remember that only a small percentage of the total property price in required to secure an off plan unit. You can usually expect 25 - 30% of the list price, the payment of which may be made in instalments. The total balance is not due until completion.

It is however possible to sell your unit before completion, gaining a return that reflects the increased market value, while only investing 25 - 30% of the discounted price. This is an increasing popular investment as you can achieve maximum gains on a short investment and are able to free up capital for your next off plan investment.

As with all types of investment, timing is important, particularly when investing in emerging markets. An emerging market offers an opportunity to capitalise on discounted development prices in an economy that is promoting low unit cost to encourage foreign investment. However, it is vital that once you find a suitable investment, to act quickly. The worldwide property investment market is highly competitive and fast paced, "the early bird catches the worm".