Buying a property off the plan involves purchasing an advertised building that is yet to be built. Apartments and units are often sold “off the plan”, where a buyer signs a contract without being able to examine the finished building first. This may sound like a strange concept, but there are actually many advantages to securing a property before it’s built. Of course, there are also important considerations to weigh up in order to avoid legal and financial complications.
So, should you buy a property off the plan? Here’s some advice and an examination of the pros and cons.
First and foremost, investors consider buying property off the plan because they have the opportunity to lock in the price. This means you pay today’s prices even though the property hasn’t been completed yet.
Buying off the plan is also more accessible for many investors, especially considering you can have access to a high-value asset. Buying off the plan can come with lower deposits and more time to make the final payment (you don’t pay until construction is complete).
Finally, you may earn extra money if the local market experiences a growth period, meaning you’ve secured your property for a bargain price.
Investors buying property off the plan in Victoria may be eligible for stamp duty concessions, making it an easier investment opportunity for many. Investment properties also come with tax advantages and off-plan purchases are no different. You may be able to depreciate certain items in order to lower your tax requirements – talk to your accountant for expert advice.
Of course, buying a property before it is built means you’re getting a brand new asset. Whether it’s a place to live or an investment opportunity, this is a major advantage. New developments are also built with modern lifestyles in mind, which is another benefit.
In some cases, investors will have several customisation options, allowing them to change the colour, finish and layouts in a property, allowing your flat to stand out from the rest.
It’s essential to research the reliability of the responsible developer for building your off- plan property. If the developer goes into bankruptcy before the construction is complete, you will need to know how much money you get back and what other guarantees they are offering. While there is no way to ensure a reliable developer, buying from a developer with a strong track record provides a greater chance of success.
There are always elements of off-plan purchases that will be outside your control. With a fixed price, changes in the property market could mean you severely overpay for your new investment. Similarly, changing interest rates could affect the overall viability of your investment.
Unfortunately, you can never know exactly how your off-plan property will look upon completion and you may be disappointed. There can also be changes in the construction schedule that affect the layout of the property or alter other factors that are not to your liking.
Perhaps most important of all are the legal considerations – getting these details wrong could leave you unprotected but taking the right steps can protect you from a range of other risks.
If you’re considering an off-plan purchase, property law and conveyancing experts will be essential to your success. Professionals like the team at Just Conveyancing can examine your contract of sale and help to ensure a range of protections such as:
At Just Conveyancing, our property law experts provide complete guidance for investors looking to buy off the plan in Melbourne and throughout Victoria. With more than 30 years of experience, our services will avoid legal complications and protect for your purchase.
For more information about this service, contact Just Conveyancing and ask us about our high-quality, off-plan services.