Key Facts to Consider While Purchasing Off-Plan Real Estate.
The term ‘off-plan property’ refers to property which is available for purchase before it has been completed. Buying an off-plan luxury property might be a turn-off for most investors because they tend to doubt the authenticity of the developers in terms of delivery and sizes of each housing unit. Although this is a normal feeling among investors because of the fear of failure that arises when investing in property. However, this may not seem right because you tend to see the approved plan for each housing unit before you can transact with the developer or the company in charge. In addition to that, you have the opportunity to carry out your housing measurement again.
This article focuses on;
-What is off-plan property?
-Benefits of buying or investing in an off-plan property.
-Risks of buying or investing in an off-plan property.
-Conclusion
Off-plan properties are properties or development that is still undergoing construction and so has not been completed yet. This implies that sometimes potential investors won’t have the opportunity to see or view a prototype of the investment they want to invest in. Although investing in off-plan properties have a lot of benefits provided that the location where the property is positioned will skyrocket investment returns.
Great Advantage When Buying An Off-Plan Property
Buying off-plan means committing to buy a property before it’s finished being built. This often means before it’s started to be built, but not necessarily: even if the property is well on its way to being finished, it’s still technically an off-plan purchase.
These are some of the advantages;
-You are able to secure a purchase price below market value.
-Great capital growth can be attained.
-It gives the ability to resell the property at a profit.
-It gives you an opportunity to buy the property with a minimal deposit.
-It gives time to plan and save.
-Gives investors peace of mind, taking the stress off during a building project.
-Equity Growth.
The property is brand new and fresh.
So what are the benefits of buying or investing in an off-plan property?
One of the commonest benefits of buying off-plan property is that you tend to buy below market value. Let us take, for instance, a luxury finished four bedrooms detached duplex in Abraham Adesanya, Ajah which goes 70,000,000 on outright purchase, if off-plan, might be going for 50,000,000 and with flexible payment plans up to 18 months, with an initial deposit of 5% of the price for the duplex. Now you can see that you are buying below market value and by the time the property will be fully finished, it would have appreciated.
Another important point is that you have the opportunity to contribute your own input into things like interior decoration, kitchen finishing, bathroom tiles, and many more.
In addition, you have the opportunity to know more about the materials used in constructing the building, unlike an already completed building that might have problems ranging from cracked walls to poor plumbing works to electrical installations.
Lastly, you have the opportunity to flip your investment even before completion.
Having explained the benefits you tend to get when you buy into off-plan property, let us now look into the risk involved in buying an off-plan property
One of the major risks is Trust on the part of the developer, the trust issues arise when potential investors find it difficult to believe in the reputability of the developer or real estate company and also on what the property would look like after completion. This why some developers develop a physical prototype for potential investors to see how the off-plan would look like.
Another important risk is that the project may face delays. This problem might be attributed to funds in raising the projects. This is why you need to note in the contract the deadline for the projects. It’s also pertinent for potential investors not to violate the terms of payment between them and the developer.
In conclusion, buying an off-plan luxury property is a good investment if you invest in areas where properties appreciate faster as you will have the opportunity to get a high return on investment. When it comes to location; Lagos, Abuja, some part of Ogun state are good areas for investment as demand for residential properties keep rising in this location. Also, when you buy from the right developer that has track records of what they have achieved so far in the delivery of off-plan properties.
