Buying property off-the-plan is often a great way to secure a great price on up and coming areas. Perfect for investors or first home buyers, what off-the-plan lacks in viewability, it makes up for in value.
If you are considering an off-the-plan apartment or townhouse purchase, there are a few things to keep in mind to make sure the risk of not seeing your new property is minimal. Here are the top five tips when purchasing off-the-plan in Australia:
Tip 1: Get a quality real estate agent
Trust in your real estate agent is crucial. Make sure you are dealing with a genuine and honest agent or agency. They all want to sell, but finding someone who has your best interests in mind as well is critical, especially when it comes to your unique situation. They should also be knowledgeable and provide all of the information you require about your potential area and property to help you make an informed decision. It is in their best interest if they want your repeat business after all.
Tip 2: Don’t be blinded by the price
Buying off-the-plan is cheaper than ready-made properties due to the element of the unknown. Keep in mind that signing on the dotted line means you are legally bound to that property before it reaches final development and occupancy approval. The price may be too good to be true, but ensure that you will end up with something you are happy with, that is of high quality.
Usually, the biggest issues with off-the-plan purchases come after the fact based on the quality of individual elements within the property. To avoid this issue, carefully examine all of the options put in front of you during the process and never assume the pre-chosen elements are fine. Always ask questions if you are unsure about something as you will be faced with a lot of choices!
Tip 3: Take advantage of the situation
Depending on your situation there may be tax depreciation benefits or government incentives when buying a new property of the plan. This is sometimes area specific or more relative to first home buyers, but if you listen to the first tip in this article, you should have an agent that can alert you to any eligible exemptions and concessions.
Don’t rely solely on your agent, however, do your own research to see if you can cut down the stamp duty a little.
Tip 4: Get the right loan
Most off-the-plan situations mean your loan will be given in stages, often only requiring interest payments. Talk to your financial institution to see what the best mortgage set-up will be (an offset account may even help), and reduce the amount you need to spend before being able to use the asset.
Tip 5: Know the market
This tip technically applies to any property purchase, but research is essential. Make sure you are well across building developments close by and the market movements of the area, especially if you are purchasing as an investment.
There is no reason to steer away from off-the-plan purchases as old homes can have just as many issues as new ones. There is a reason why so many people are buying before seeing; the value is too good to ignore. If you are willing to be a little bit flexible on the specifics of your new home or investment, then you may just grab yourself a fantastic deal!