Purchasing off the plan property is not a risk worth taking. The promise of stunning apartments, high-rise buildings and stamp duty may look good on paper but it pays to look at the small print and risks involved. Here’s why.
Purchase price vs sale price
The purchase price of an off plan investment can wildly fluctuate from the value of the property come completion. Your purchase price may not adequately reflect the value of the property once complete and can be tricky to predict the value of the investment come time to sell.
Depreciation in Value
An off plan property can depreciate significantly as it goes from new to used. Investors need to carefully review what impact any depreciation will make on their investment and price accordingly. Also consider the possibility that construction may run over schedule, which can also impact the investment.
Supply and Demand
Too many of the same apartment buildings in close proximity to one another can reduce the ability to sell for profit and retain rents. At infolio, we always recommend researching the surrounding streets and suburbs for similar constructions that may impact the investment.
Discount incentives can look appealing on first glance. In reality however, off plan investments can incur hidden costs including developer markups, market fluctuations and depreciation.
The final product
Buying off plan may seem attractive due to discount incentives. Buying property before you’ve viewed the investment up close is risky, especially when the final product is unknown.
It can be tempting to invest in the ‘idea’ of an apartment but in reality, it may look very different. At infolio, we use a strict model for purchasing established property in areas that have strong track records of capital growth.
Buy established and trusted
Consider whether the investment lies with trusted, proven professionals with impressive track records. Remember, its in their best interests to get the best price for the property – not yours.
Purchasing off the plan is not a risk worth taking. At infolio, we always recommend buying established properties in small blocks and blue chip areas with a track history of strong capital growth. These areas are a reliable and advantageous investment.
As buyer advocates, we carefully research each investment to suit your investment needs. We can help you weigh out the pros and cons of each potential investment to find the right solution for you and can even negotiate on your behalf.
Contact us today to learn more about how we can work for you.