Pros and Cons Of Buying Off Plan Property

So you have visited the developers office, seen the glossy brochures, spoken to the slick sales agent and now decided you want to buy off plan. This could be a great move but before you sign on the dotted line there are a number of things you need to consider first. 

Lets have a look at just some of the pros and cons when it comes to buying off plan property. 

Benefits of buying off plan:

• Low up front costs – Most developers will require a 10% security deposit with the remaining amount to be paid during the construction period or at completion. This  makes buying off plan more affordable and easier to manage for most buyers. 
• Buy brand new – When you buy off plan you get a brand new never lived in unit. What you also get is first choice of available units. This, if you buy early enough allows you to pick from the most desirable units in a particular development. 
• It’s often more affordable – If you buy early developers are often keen to secure sales for the project to go ahead. As a result the prices are often lower compared to what is offered  towards the end of the sales process.
• Sell before completion – Most developers will allow you to sell your property before project completion. This allows buyers to cash out early should prices rise.
• Capital appreciation – If the property market experiences growth, the property you purchase off plan today is likely to increase in value by the time you take possession.

Risks of buying off the plan:

• Falling property market – Just like the property market can go up it can sometimes just as easily go down. What this means is that the property you bought two years ago is worth less today then it was when you first purchased it. This can cause various problems with financing and reselling the unit should that have been the intention. 
• Not getting what you expected – Unlike with ready property you don’t get to see the property which you buy off plan. This means you often have to envision the end product and rely on brochures and the word of the developer sales agent.Unfortunately not all promises are always delivered on and what you end up with may not be up to the same standard you had hoped for. 
• Developer Issues –Property development can be a tricky industry and it’s not unheard of for property developers to go out of business. This can leave existing buyers in a rather awkward and uncertain situation. 
• Not being able to use the property – An off plan property can take anywhere between 2 to 5 years to complete meaning you can’t move in and use the property. This can be an inconvenience should your personal circumstance change during the construction period.

As with all investments, buying an off plan property does come with its own set of pros and cons. Understanding what these are is crucial and will go a long way in helping you decide whether buying off plan is the right thing for you.