Buying off-plan is often an appealing option for property investors thanks to the discounted purchase price compared to the value of a completed property. It also allows the purchaser to place a deposit to secure the property while construction takes place.
Normally, the property investor will need to pay a reservation fee and a deposit. The deposit can be anything from 10-20% and upwards of 50% depending on the developer and development. This is an attractive prospect to investors alike due to the high leverage of the deposit during the build period. There could also be extra payment options again depending on the developer and development.
Although a riskier strategy than buying a completed property, many property investors favour this approach because off-plan properties are generally priced significantly below market value.
Property Investors are now facing extra costs to counteract this, it’s more important than ever that investors seek to find the highest yield / return on their investment. This is where off-plan investments in emerging markets offer great potential. For example, buying off plan property in up and coming areas outside of London enables property investors to secure well located property before they hit their most competitive pricing. Off-plan developments can offer maximum potential profit as opposed to buying second hand property as they will be priced at a premium.
Short & long term profit when buying property off-plan
Some early-bird property investors, who buy property off-plan at the earliest phases of construction, sometimes intend on securing a short-term profit by re-selling or ‘flipping as known in the property industry’ their property investment prior to the completion of the development. This also enables those property investors who want to buy off-plan but don’t want the early risk to still see their investment grow.
More serious long-term investors, however, will take a medium to long term property investment view, by holding onto their property investment purchased off-plan as part of a property portfolio.
Discounts for buying property off-plan
Purchasing properties off-plan in the early phases of their development has traditionally presented an opportunity to secure a discount when purchasing multiple units, or its already priced below market value.
However, investors need to be in a position to proceed quickly with their purchase and possibly even buy off-plan in bulk, if they wish to secure any form of discounted purchase.
Bulk-buying properties off-plan to save more money
Property Investors hope that the more they buy in one go, then the more they save.
Some professional property investors prefer to take small portfolios in one development, whereas others prefer to diversify the type of property they buy as well as where they purchase.
Purchasing property off-plan does come with associated risks and so wherever you choose to invest, always ensure that you undertake your own careful due diligence prior to parting with your money.
If you are considering purchasing a property off-plan no matter if you are a first-time property investor or seasoned property investor, Acentus Real Estate are here to help you as we have many exciting residential, student and alternative investment options for you to consider.
If you would like to speak to one of our property advisers who will guide you through our latest projects please contact us at firstname.lastname@example.org