At Coposit, we understand that investing in off-the-plan properties can be a daunting experience. With so many factors to consider, it can be difficult to know where to start. That’s why we’ve put together this guide to help you make smart investments in off-the-plan properties.
Off-the-plan properties are properties that have not yet been built. They are typically sold before construction has begun, with the promise of a future completion date. What this means for buyers is that you’re making your decision based on building plans and designs in the display suite, rather than the actual finished product.
One of the main benefits of investing in off-the-plan properties is that investors can often secure the property at a lower price than they would pay for a completed property, usually if they get in early enough or before construction begins. This can provide an opportunity to generate a healthy return on investment once the property is completed.
Another benefit of investing in off-the-plan properties is that investors can often have a say in the design of the property. This can include choosing the fixtures and fittings, as well as the layout of the property. It’s on a case by case basis; you’ll need to check with the relevant developer to see what’s possible in your desired development.
Investing in off-the-plan properties does come with risks. One of the main risks is that the property may not be completed on time or may not be completed at all. Construction delays can lead to increased costs and inconvenience. This can leave buyers with a property that is not generating any income and may be difficult to sell.
Another risk of investing in off-the-plan properties is that the value of the property may not increase as expected once it is completed. This can result in a lower return on investment than expected, or even a loss.
At Coposit, we believe that there are several key factors to consider when making smart investments in off-the-plan properties. These include:
It’s important to choose a location that is in high demand, with good transport links and amenities nearby.
It’s important to choose a developer with a good track record and experience in delivering off-the-plan properties. We’re pretty selective with the developers we bring on to the Coposit platform however you are absolutely advised to conduct your own research and do your due diligence before signing any contracts. Start by researching their past projects, reading online reviews and testimonials and checking their social media accounts. You can also check to see if the developer is a member of any professional organisations or industry bodies; this can mean they are committed to the enhancement of the industry.
It’s important to research the local market, including demand and supply, as well as any upcoming developments that may impact the value of the property.
It’s important to have an exit strategy in place, in case the property does not generate the expected return on investment. It might be the last thing on your mind when you’re feeling excited and optimistic about purchasing a property, but it’s crucial that you are pragmatic and kick things off with the ending in mind. There are several exit strategies to research; seek the advice of an independent financial advisor to help work out which strategy will work best for you and your unique situation.
You may notice one crucial factor not mentioned above: the deposit. Typically, to secure a property you’d need 10% of the property’s value available upfront as your deposit. However, thanks to Coposit, that’s no longer the case. There’s a new way to property, where you can get onto the property ladder with $10k as your initial deposit.
Investing in off-the-plan properties can be a smart way to generate a healthy return on investment. However, it’s important to carefully consider the risks and benefits before making any investment decisions. As always, we recommend you seek out independent financial and legal advice.
There is more than just one way to buy property. If you’re ready to kick-off your search for your new home, download the Coposit app and start browsing from a range of projects where you can secure your home for as little as $10k upfront.