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If you want a great investment, and the ability to put yourself in a great bargaining position when it comes to buying your property, an off plan property investment could be perfect for you. To purchase a property 'off-plan' is simply to decide to buy a property before it is built. There's nothing strange about that - loads of people do this when buying their own residential property in order to have a say particularly on the interior finish of their home. However, for you - a property investor the "off plan" option can have a huge significance.
In all forms of retail, discounting has long been the most effective method of moving stock quickly; houses are no different. If you buy a property before it's built, there's a good chance that you can exploit the possibility of a discount - and a significant one at that. If you want to secure the property off plan, just a deposit will be required initially - which means that you can reap the benefit of capital growth during the build phase (usually between 6-12 months in the UK and 2-3 years Overseas), as you will have only paid the deposit rather than the full purchase price.
An off plan property investment is a business decision, and therefore made with the head and not the heart. So remember, it stands to reason that the information needed to make the investment decision is fundamentally different to that needed when you are buying your home. You'll need a wealth of nuts and bolts information, firstly regarding the developer. What's his status? His history? And is he financially secure? When it comes to the property, make sure you are familiar with the plans, floor layouts and building specifications.
The benefit of investing this way is that it gives you choicer and flexibility. While property is being built, prices will typically increase; on larger sites there is a marked increase in the property price between each phase of the development - you're literally making money from the word go. When the property is completed you have the choice to complete the purchase, and benefit from a rental income, or in a move that's called Flipping, you can sell the property before it's finished and release the capital growth that has been achieved during the build. Flipping is popular as Investors don't have to worry about tenants, furnishings, rental collection or mortgage and insurance payments.
However you decide to make the most of your capital, an off plan property investment is a great way for you to start a property investment portfolio.
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