Whether you’re a first home buyer or a property investor, the idea of buying a brand new property ‘off the plan’ is certainly appealing. The developer’s glossy brochure invites you to picture yourself at home in a ‘seamless indoor-outdoor environment’, with European appliances and facilities worthy of a five-star resort. There’s no nerve-wracking auction bidding to worry about, and you don’t have to think about pest inspections or the many potential hidden maintenance issues within an older home. But is buying the off the plan a smart move in today’s property market? Here are five things to think about before you hand over your deposit.
What are the potential pitfalls of buying off-the-plan?
- Any money ‘saved’ on stamp duty is often paid at settlement when the bank valuation comes in at 10%-15% under the purchase price.
- Apartments bought off-the-plan can take up to 7 years to realise their original purchase price.
- Apartments bought off-the-plan often come onto the rental market at the same time. This can significantly devalue their rental return.
- Developers may create the Owners Corporation, striking exorbitant fees and locking owners into long term contracts to manage the complex.
- Developers can facilitate an imbedded network, locking residents into higher than normal utility costs. The developer receives the difference between what you would normally pay and what the utility supplier charges you.
So should you ever buy off–the-plan?
As Buyers Agents, we’re not against buying off-the-plan. If you’re looking to invest in a development, a Buyer’s Agent can navigate the tricky waters and assist you to maximise your investment.
By ensuring you are buying the right size and floor plan, in the right location, a Buyer’s Agent can help you to maximise your short, and long-term returns. But most importantly, a Buyer’s Agent will also return the commission a selling agent would have received from the purchase – making up the shortfall in the valuation. A Buyer’s Agent can also help you to identify the unique apartments on offer in individual developments to ensure that you’re not investing in a dime-a-dozen apartment.
As your Buyers Agent we can assist you to find the best investment property for your needs and budget. Avoid the pitfalls of buying off-the-plan by speaking to us today on 0404 00 66 00.
