04 Mar A Guide for Buying Off Plan
Is it a suitable option for you?
Purchasing property ‘off-the-plan’ increasingly is becoming a popular way to purchase property.
It offers a range of benefits and flexibility to purchaser’s that is not otherwise available when buying established real estate.
What is Buying Off-the plan?
Buying real estate “off the plan” means committing to buying a property that hasn’t yet been built. For you this can also mean:
- You can secure a new home not yet built that is likely to have the latest in finishes and technologies included in its specifications,
- You have more time to save for your home purchase while your home is being built, and
- You may be able to customise your selected floorplan to make it more individual to you, and in turn helping make a perfect home for you and your family.
What are some of the benefits for you?
There are some good reasons why some people choose to buy real estate off-the plan. To help you think about if this is something that might suit you, we can share with you the top reasons buyers often explain to us why they made this ption their choice.
The purchase price is typically lower than for an equivalent established property at the time you enter into your contract for sale. For both home-owners and property investors, buying off-the-plan can be more affordable and flexible than buying an existing property. Why this is so…
- Developers typically offer lower prices early on in the life of a development project in order to secure the project sales before construction starts.
- After construction commences, the developers no longer has a need to discount the prices and the prices then typically are higher.
You only pay the deposit to the developer and the remaining balance you only have to pay at completion of the property. This means you have more time to save before settlement while your property is being built. Why this can benefit you….
- Your property may increase its market value as while it is being built, providing you with exposure to the market capital growth even though you have only paid a deposit. This is a type of leverage strategy in real estate investment.
- There are generally greater levels of tax depreciation available to purchasers of “new properties”, meaning you can maximise the benefits to you from the after-tax cash flow.
- There can be certain exemptions or concessions available to you eg you may be eligible for the first home owner grant or for stamp duty concessions.
“It helped me with a disciplined approach to saving, I knew how much time I had and how much I wanted to save to put towards the equity in my home!”
You can typically have a greater ability to customise your property to meet your lifestyle needs.
With some developers, the earlier you get involved in buying off the plan, the more ability you may have to ask it to be customised for you – even play around with the way the floor plan works and finishes to personalise your home.
‘When people come to visit my home, it turns into journey through my life’ in a home perfectly matching my personality. The wait between signing on the dotted line and moving in also gave me plenty of time to find great online furniture, research local designers and artists for artwork and objects that all now sit on the walls and shelves of my home. Everything about my apartment is an absolute reflection of my personality, it feels like my home.”
Your structural repair bills are lower than for established property for a time.
When buying off the plan, you will be given certain builders’ warranties that extend for a period after completion and settlement. The builders’ warranties you get when you buy a home off the plan means certain structural or interior building defects must be repaired by the builder within a certain timeframe.
By comparison, when you buy an established property, they are typically being bought with no builder’s warranties in place – making it the buyer’s problem to pay for any repair costs for any building defects.
Other Things You Should Consider
There are other things we recommend you should consider before deciding to buy off-the-plan property. You can get some more expert advice by talking with one of our team. Buying off the plan does come with some risks but it can be an extremely positive experience if you follow a few simple steps.
- Contracts – Make sure you understand the type of contract you are entering into. You will typically pay a 10% deposit and the balance of the purchase monies is paid at the completion of the building process.
- Inclusions – Every builder and developer will offer different ranges of fixtures, fittings and finishes that are included in the properties they offer. It is important you understand what you should be expecting in your property. These inclusions may differ dramatically between developers, dwelling types, and locations.
- Drawings/plans – The floor plans are the blueprint for the property you are purchasing. They will form part of the contract of sale and it is important that you understand the exact layout and dimensions of the building and your property, including ceiling heights, electrical layout and external finishes. If you do wish to make any alterations or variations to your property, the best time is to ask for these before detailed working drawings and construction documentation has been done by the builder, using the process outlined within your contract.
If you are thinking that you want to buy or need to sell off the plan real estate. we will guide you along every step of the process. We only sell properties we love ourselves and we are always happy to help buyers find the right property for their needs.