Buying off the plan is becoming an increasingly popular option for good reason. As well as getting a brand-new home, you’re also buying at a set price and usually only need a small deposit. However, if you do decide to go down this route, it’s vital you go in with your eyes wide open. Here are some of the things you need to think about when buying off the plan.
Research the property market
Regardless of whether you’re an owner occupier or an investor buying a rental property, do your homework when buying off the plan. Take a look at current vacancy rates, rental yields and demographics of the area you’re considering buying into. Compare recent property sales figures and check out any proposed future developments which could impact the value of your new home.
Research the developer
Ensure the developer is reputable and trustworthy. Do a quick online search for their name, the name of the builder and the name of the project marketer or real estate agency in charge of marketing the development. Find out what experience the developer has, take a look at recent projects they’ve worked on, and find out if the project was completed on time and to budget.
Consider the risks
Before buying off plan, it’s important you find out if the developer has already reached their pre-sales target and when construction is expected to begin. Adverse weather could slow things down, as could getting the necessary approvals in place.
Be sure to check the sunset date in the contract – the final date that the developer must complete the building or you have the right to exit the contract. An excessively late sunset date should sound alarm bells, as it means uncertainty around when the property will eventually become yours.
Do the maths
Be mindful of the costs involved in buying off the plan. While you won’t be paying a mortgage yet, you’ll need to have enough saved up front to cover a deposit, legal fees, and any other stamp duties or borrowing costs you may be charged.
Seek legal advice
Because buying off the plan is a little different to buying an established property, it’s vital you get legal advice from a lawyer or conveyancer who has experience in dealing with off the plan contracts. Have your lawyer review the contract before you sign.