A Simple Guide to Investing in an Off-the-Plan Property
Jan 16, 2018 Home Trading Steps
To start with, off-the-plan properties are those wherein the construction hasn’t begun but the project has been announced. There is no physical proof of the project or property of how it will look like. Not many are in favour to invest in such properties as it involves a lot of risks. Here the investor has to rely on the blueprints or the design of the prospective property. In this case, most of the units get sold when the project is in its pre-launch phase.
However, there are certain investors who see investing in off-the-plan property as a good opportunity to earn even before the property or the project is constructed or completed. The investors get to invest in the property at a much lower price as compared to the property in the under-construction or ready-to-move-in stage. The developers also offer some financial incentives to the investors at a very initial stage. Also investing at such an early stage gives times to the invested capital to grow and investors can gain from it.
Investors in off-the-plan properties are also a great help for the developers too as investors in the initial stage of the project help in financing the project while making it worth for the financing for the lenders.
So here are some tips for those who plan to invest in an off-the-plan property:
Do thorough research on the property: always remember that the property you are investing is just a design, there is no physical proof about it. Hence, it becomes very necessary to know and do a thorough research on the property. Calculate and analyse how much you are investing in and how much you could gain out of it in the long term. Research about the market, compare the other properties before making the choice. Also look for the prospective future plans in that location such as established and upcoming infrastructure, the trend in property prices, vacancy rates, demographics as well as employment statistics. All these factors will you help in making a good decision.
Decide the budget: set a budget before selecting a property. As this is a long term investment so you need to be sure of the money you are investing as you would not get instant returns out of it. And you don’t want to be in financial pressure and stress in the long run.
Check the time you have: you must know that investing in an off-the-plan property means long duration. You must be ready to take the risk and accept the fact its a long term business. You should know that the minimum period you need to stick is at least 5 years. If you want to earn good return then you need to stick for at least 10 years.
Hence keep this factors in mind while investing in an off-the-plan property.
However, there are certain investors who see investing in off-the-plan property as a good opportunity to earn even before the property or the project is constructed or completed. The investors get to invest in the property at a much lower price as compared to the property in the under-construction or ready-to-move-in stage. The developers also offer some financial incentives to the investors at a very initial stage. Also investing at such an early stage gives times to the invested capital to grow and investors can gain from it.
Investors in off-the-plan properties are also a great help for the developers too as investors in the initial stage of the project help in financing the project while making it worth for the financing for the lenders.
So here are some tips for those who plan to invest in an off-the-plan property:
Do thorough research on the property: always remember that the property you are investing is just a design, there is no physical proof about it. Hence, it becomes very necessary to know and do a thorough research on the property. Calculate and analyse how much you are investing in and how much you could gain out of it in the long term. Research about the market, compare the other properties before making the choice. Also look for the prospective future plans in that location such as established and upcoming infrastructure, the trend in property prices, vacancy rates, demographics as well as employment statistics. All these factors will you help in making a good decision.
Decide the budget: set a budget before selecting a property. As this is a long term investment so you need to be sure of the money you are investing as you would not get instant returns out of it. And you don’t want to be in financial pressure and stress in the long run.
Check the time you have: you must know that investing in an off-the-plan property means long duration. You must be ready to take the risk and accept the fact its a long term business. You should know that the minimum period you need to stick is at least 5 years. If you want to earn good return then you need to stick for at least 10 years.
Hence keep this factors in mind while investing in an off-the-plan property.
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