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Buying off-plan means that you are investing in the property before it has been built, whether that’s during or prior to construction taking place. Buyers may only have access to CGI’s, floor plans and specifications at times, which understandably can appear risky, however, buying off-plan can be beneficial.
Over the last few years, the off-plan development market has become increasingly popular. To secure the best off-plan investment, an area with exponential growth is important and desirable.
Cities providing successful regeneration projects have noticeably attracted numerous business opportunities and improved the lives of existing residents in both the local and regional economies, offering real value to the city in both the public and private sectors.
When you invest in property, capital growth is something that you always want to look for. Investors who have previously purchased off-plan, typically see a rise in price growth over time.
Over the period that it takes for the development to complete, you could see the property value of your investment increase before it’s ready. Off-plan properties are set below the market value due to the inconvenience caused, and therefore, we understand the hesitancy investors may have to pay for something that is not built yet. However, there is a promising outlook on the property market as property prices grow in value each year.
Regeneration projects positively affect the property market. Cities undergoing large regeneration schemes boost the economy within the area, thus strengthening the property market. Increased inward investment helps transform local amenities, offering more to residents, furthermore, increasing the value of properties within the area. Click here to read more about capital growth.
An additional benefit of buying off-plan is that it holds high popularity with investors, as it is a much cheaper way to buy. When investors purchase during the planning or construction stages, the value is more than likely to go up by the completion date.
In some cases, developers can offer discounts for early investors such as securing a cheaper deal, negotiating staged payment plans, and making smaller deposits. Once completion rolls around, it will automatically attract a swarm of investors, increasing demand and driving up prices.
Therefore, to invest in off-plan property, you are not only getting a cheaper alternative but there is huge potential for profit to be made as the value will increase over time.
Investors who purchase off-plan can choose to put the development up for sale at completion and sell at a higher market value. This can be considered a great strategy for investors who are looking to make quick profits. However, as an alternative, investors may choose to tenant the property as quickly as possible and benefit from regular rental income. Properties in prime locations, surrounded by attractive and strong transport networks, plentiful job opportunities and local amenities will benefit from higher rental yields. The desirability of the area will also mean the risk of properties remaining vacant will be extremely low.
The final key benefit of purchasing off-plan is the attractive, modern design. When purchasing a development off-plan, you, as an investor, will have the ability to choose a specific unit and its benefits. However, to secure the best unit, the sale process works on a first-come, first-served basis and so you must get in there relatively quickly to secure the best deal.
To increase attractiveness, an off-plan property will have a new-build design. Off-plan properties are new or refurbished builds, which guarantees a contemporary build, benefiting from energy efficiency and environmentally friendly specifications and safety standards. Modern tenants are focusing more on living in greener properties. Being a landlord for off-plan new builds almost guarantees hassle-free encounters with tenants.
Should you invest in buying off-plan?
Simply put, yes. Buying off-plan has a wide range of benefits (as seen above). With the appeal of advantageous capital growth, down to the design of properties, off-plan purchasing has the potential for exponential success.
With the current market inflation, we are aware that there is hesitancy in purchasing property, however, if not now, when? Do we wait? Here’s the reality, markets rise and markets crash, but it is a gamble either way. How are we sure that prices will drop? Rather than trying to determine whether now is a good time to invest or not, our view is, that if you know what you are doing, it’s always a good time.
Working with the right developer is important, though. As with any investment, there are going to be elements of risk. Research prior to your investment is imperative. Before buying off-plan, you want to minimalise any potential risks by conducting full extensive research on your developer.
Luckily, here at CityRise, we pride ourselves on working with developers that have had a full and complete due diligence check. We consider everything from the reputability of the developer down to the security and financial stability. We do all the hard research for you so that your process of working with us and the developers is smooth and hassle-free.
Although off-plan investment can be considered risky, the rewards excel. The risk can be managed by conducting prior, thorough research. At CityRise, our expert advisors will guide you throughout the whole process, making your property investment journey an enjoyable one.
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