The Pros of Purchasing Off Plan
The general lack of stability or guarantee of returns available from the stock market coupled with a global housing boom have resulted in many more investors putting their hard earned sums of cash into real estate around the world over the past year or so.
Some of these investors have simply purchased second homes, some have developed and flipped houses while others have bought into real estate investment funds and trusts for example – but the one thing that many of those profiting from property have in common is consistently cashing in on off plan real estate developments.
And even if the global property market is about to take a tumble into recession as some doom and gloom-mongers will have you believe, there are still profits to be made from off plan properties.
Here are my five pros of purchasing off plan: -1) By buying before a single layer of bricks has been laid you have complete control over the internal layout and finish of your property.
If the home is to be a holiday or second home you can customize it to your tastes, alternatively if it is to be let out or flipped and sold on for profit you can customize it to fit your target market.
If you’ll be corporate letting the property you can spec it up to the max, if you’re going to be selling to a family you can ensure there’s at least a second bathroom and that the bedrooms and family spaces are decorated appropriately for example.
Basically, buying off plan gives you more control!
2) You are buying the off plan property at today’s prices – you are fixing and future proofing the cost of the property meaning that not only can you budget to afford it, but you will also benefit from any natural periods of inflation that the local real estate market enjoys meaning that when the property is completed in twelve to eighteen months time you will benefit from any increase in the underlying value of the house.
The equity growth potential from buying off plan is a great plus!
3) You will have the full period of the build duration to pay for your property meaning that you don’t have to find a large capital lump sum up front to afford it.
You can work and save to meet the stage payments throughout the build process making buying off plan an affordable way to acquire a home!
4) You need never pay in full for your off plan property – yes – you heard me right!
Instead of making the final lump sum payment on your off plan property you can flip it by putting it on the market as it comes to completion.
You will take back what you put in to the property plus all the profit and you need never make that final payment if you time your investment right.
5) Many constructors encourage investors to buy off plan as it allows them to use your funds to pay for the building of the development - in return they offer you guaranteed rental yields for a fixed term.
By buying such an investment property off plan you will future proof the price you pay for it, you will benefit from any natural inflation in the housing market during the build period, you will then also generate a fixed rental sum annually for a given period and throughout that period as well you will reap the rewards of housing market inflation in terms of the rise in equity that your property will gain meaning profits all round from off plan properties!
Rhiannon Williamson is a freelance writer whose many articles about international property investing have appeared in publications around the world.
Visit this link to read her latest articles about Property in Bulgaria
Rhiannon Williamson
