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Want to be a part of the biggest new trend in property investment this decade? Well, if you have a little vision and a lot of ambition, buying off-plan could be the quickest way to build up your property portfolio by capitalising on growth in the market place.
Off-plan property investment involves buying a property before or during its build phase. (Literally, you are buying a property off the developer's plans.) Developers are usually prepared to discount property bought in this way as it gives them security that their project will be successful and lets them fund additional developments without waiting for the completion of build.
It's easy to see why this type of investment is really on the increase. Not only can you secure a discount on the 'completed' price, you won't need to spend time or money on refurbishment. If you're in the right place, it's possible to capitalise on growth in the marketplace during the development phase - reaping a profit even before the developer has even left the site.
If it was always that easy though, everyone would do it. There's some crucial knowledge you need before signing up to an off-plan purchase. For example, how many of the properties are being sold to other property investors? If it's a majority, you'll have to compete for that all-important profit or tenant.
You also need to check out the maintenance costs if you're buying in an apartment block. While the gym, swimming pool and 24-hour porter service might look attractive to a tenant, you will be responsible for the charges. You also need to make sure that build happens to the agreed specification. Often this involves detailed 'snagging' to make sure that when you take possession of the property it is ready for rental without delay.
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.
There are of course risks with any off plan property investment in so far as delays can push back delivery dates, which can be awkward if you are dependent on rental income. Another problem is that foreign mortgage lending can be complicated to set up. In France there are numerous ways of borrowing sums at different rates for different periods of time. The safest way to buy off plan property therefore is through an independent property investment company, which will not only find a suitable property for you, but which has a longstanding relationship with reliable developers, and expert knowledge of legal and financial processes.
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