Investing The Off-plan Way in Real Estate
Off-plan Investment – The Pros
Buying off plan means committing to buy a property before its completion. In simple terms, as a prospective home owner, you financially commit upfront to buying a house before you can actually see it physically complete. Off plan buying covers several stages of construction, right from ground breaking to general finishing but developers tend to draw a line from when the property can be bought off plan or as a complete unit.
Prospective buyers are however advised to conduct due diligence on the developer, including review of past projects, the company’s reputation and getting reliable referees, among others before signing a contrac
t. The buyer should be able to conceptualize the idea from drawings to ideal, therefore he/she should be able to/find someone to interpret architectural plans so as to know the basics, for example the size(built up area, type of construction materials and number of rooms of the house. The buyer is also advised to keep track of the construction process and to be in constant touch with developers for satisfactory results.
Some of the advantages of buying off-plan are as follows;-
Most off plan sellers are investment companies that develop multi-dwelling units, either blocks of apartments or gated communities comprising bungalows/maisonettes. The buyer therefore gets to pick his/her unit at the most convenient situation according to personal interests, e.g the view, the floor in case of apartments, corner plot/ house among others.
Once the sale price is agreed and the sale agreement sealed, it shall not be appreciated despite the sale value of the units upon completion. Most of these developments upon completion appreciate in value, usually due to demand and subsequent attraction of complementary services in the neighbourhood. The off plan buyer however retains the agreed sale value.
Depending on the projections by the developer, the buyer is given the option of making periodical payments all through the period and by the time the unit is complete, the buyer has paid full price. Additionally, the deposits paid by an off plan buyer is relatively lower than that of a complete unit’s buyer. Developers may require off plan buyers to pay an initial down payment of about 10% of the total price agreed, while complete units always ask for 20% – 30% of the total sale price and a shorter period of time for completion of payment.
For easier and faster construction, developers always adopt a standardized type of design for multiple units. In as much as the exterior may not be altered for aesthetic purposes, an off plan buyer may decide to alter the interior, so as to fit his/her preferences e.g partitioning, types of finishes and fittings, internal colors, open plan design, incorporation of DSQ among others.
Prospective buyer – Choose wisely!!
