What to Consider When Buying Off-the-Plan

Investments alone hold no guarantees of return. However, of all the opportunities an investor can participate, buying off-the-plan holds a higher risk than many others. While not every investment will be perfect, there are a couple of specific dangers buying off-the-plan can pose.

Price

Markets fluctuate greatly, so it is best to invest off-the-plan when you can be assured that by the time you settle, the property price will have risen. Rental guarantees are uncertain, as the seller could be advertising a higher rental income than is actual, which could put a false valuation on the property and lower your overall return. Keep in mind, also, that an oversupply of properties in the area may affect whether your property at settlement will live up to its valuation.

Plan vs. Actual

Sometimes the property you see is not what was specified in the plan. Fixtures and fittings installed may not be what was planned, and rooms may not be as adequate as they seem in the plan. It is recommended that a building advisory service is utilised to examine the building and its fixtures, match the structure against the plan and evaluate the overall standard of the building.

Now that you are aware of a couple potential hazards of buying off-the-plan, you will be better prepared to maximize your return on your investment.