Buying a property that doesn’t exist can be quite scary for some. But, what if it could mean owning the property you’ve been dreaming about? Well, buying a property you haven’t seen yet may sound kind of crazy, especially after hearing concerns about seeing first what you’re actually buying before putting in hundreds of thousands of dollars. But, have you asked yourself if your concerns are justified?
As with any major investment, off-the-plan purchases can be high risk if no adequate research has taken place. With sufficient research and understanding, you’ll be surprised with the perks of off-the-plan purchases. To support you with that, here’s an article to help you understand how buying off-the-plan can be extremely rewarding and very beneficial.
Off-the-plan basically means something that is yet to be started, built, or delivered. You don’t physically have something to walk in and see. So, you have to really understand the design, the layout, and the finish quality that you’re looking to purchase. It typically requires a 10% deposit to go through, reserve the property, and get it off the market once you’re going to take the contract.
There’s plenty of benefits of buying off-the-plan property. Typically, developers need to get sales in quickly when they start a new project. To do that, they can do a number of different things.
The main one is a reduced price. What developers need to do is get a number of pre-sales away so that they can get their finance in place, allowing them to get the development built. In return, they offer lower prices than the typical market prices, throughout the build stage.
The price of a new property rises after it’s built. When you buy off-the-plan, you’re paying the current market price for a property which will be completed in the future. Property prices generally rise over time. Buying a property off-the-plan gives you the advantage of securing the property at the current market price, but not take possession of the property until months or years later. During which time, the market may have experienced growth.
The second big advantage of off-the-plan property is that it’s brand new. No one else has lived there and you usually tend to find better quality tenants moving into paying higher rent than an existing or established property.
When you look at off-the-plan, usually depending on when you get in, you have the first opportunity to pick any property in any development that you like. You get a chance to pick once. The first choice only counts at the start. Once the project is under construction, you then start to look at options that are still available.
You have more choice when buying off-the-plan, potentially allowing you to purchase a home with a superior position or better view, flexible floor layout, and finishes such as stone bench-tops or hardwood flooring. You may be able to choose the colour of paint you want and many other smaller details that give your property a greater potential for strong capital growth.
Some people invest in off-the-plan properties to take advantage of tax breaks. By buying the property brand new, you can find the maximum benefit of depreciation expenses for furniture and finishing.
You can often make substantial stamp duty savings if you buy off-the-plan. Some state governments in Australia offer bonuses and reductions or have reduced stamp duty to encourage new property development.
With ample time before settlement, you can avoid the stress involved in getting your personal affairs in order such as selling your house or finishing your lease before you actually move in.
Something that’s overlooked when buying a property off-the-plan is that you’re competing against other buyers for that particular property. Often, there are multiple units in each development that are quite similar. So even if there’s another buyer, they’re probably not looking at the same property that you are. This can relieve the stress of competing with five or six other buyers on an established home where there is only one of them available.
With a little research and understanding, buying off-the-plan may turn out to be a very smart way to buy your next property. This article was made to help you feel confident in buying a new property off-the-plan but it’s recommended that you still seek professional advice before buying any property.
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