Off-Plan Properties

With property investment around the world at an all-time high, many investors are looking for more financially lucrative ways to invest their hard earned money. As a result, “off-plan” properties are becoming a popular alternative to buying existing construction. When purchasing off-plan property, investors are able to choose from a wide variety of floor plans and locations, rather than making sacrifices to live in existing construction that may not suit their needs and tastes. While purchasing off-plan is a popular choice in many emerging real estate markets, bear in mind that it comes with its own positive and negative aspects. Not sure if buying off-plan is for you? Understanding their pros and cons can help you make an informed, economical decision.

Pros

Price. Often, buying off-plan is less expensive than buying from existing construction, as you’re buying directly from the developer. In addition, the property often appreciates in value before construction is even finished, making an off-plan property a potentially profitable venture.

Quality. In some newer markets, existing homes just may not be up to par quality-wise. Building off-plan can ensure that you have the latest technology and standards in place in your new home.

Taste. Face it; foreign floor plans often suit the lifestyles of nationals more so than visitors. Those purchasing off-plan properties can choose floor plans that suit their unique needs and tastes.

Funding. Off-plan developers often offer financing options for buyers. Those who don’t have enough cash to buy their property in full find this a nice option.

Even if financing isn’t available, buyers find the “stage payments” made to developers much easier to handle than making one lump payment.

Cons

Time. If you’re in a hurry, buying off-plan may not be a good choice. Construction can take a year or longer. If unforeseen weather or economic conditions arise, plan on construction taking even longer.

Risk. Not all developers are on the “up and up.” Some will take your money and run. Other developers may find themselves in a financial bind, which could completely halt the construction of your property, leaving your wallet and real estate portfolio empty. Understanding what your rights are in case of such occurrences may prevent future losses.

Quality. Yes, it can be a con, too, as some builders may cut corners to save money. Those purchasing off-plan aren’t guaranteed the best quality or construction practices.

Recourse. Those who don’t read all of the fine print may find themselves agreeing to unreasonable terms. Even worse, signing the wrong contract may mean that you have no financial or legal recourse against the developer should things go wrong.

Without a doubt, purchasing property off-plan can be a sound investment decision for anyone looking for property overseas. Just like any real estate venture involving another country and another culture, those considering purchasing property off-plan should make sure to investigate all positives and negatives before making a final decision. Doing so will ensure that buyers understand the potential risks—and probable gains—of buying off-plan properties.