6 Benefits of Buying Off-Plan Property

If you’ve been thinking about making your next investment, you may be wondering whether you should buy an existing property or an off-plan one.

Buying off-plan property comes with a host of benefits, and in this article, we’re going to share some of them with you, including how they can produce quick capital growth and better rental yields.

Read on to find out what we’re talking about…

1. Brand New Property

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 If you’re going to invest in property, the last thing you want after completing all the paperwork is to find a closet full of skeletons. Unfortunately, this is a reality of buying pre-existing property.

One of the great things about buying off-plan properties is that the build is brand spanking new, and as such, comes with various guarantees that you’re not going to be left with a huge maintenance bill after you buy. 

In short, it means that the property is in excellent condition and ready to start making you money from day one. This is easy, as the newness of the property means that it’ll be designed and decorated in a contemporary style that stands out on the market.

This goes a long way to ensuring that not only can your property be let quickly, but it can also be done so for a premium rent and you can maximise the potential profits the building’s location offers.

Of course, when we talk about ‘brand new property’ we aren’t referring to new-build white boxes. Just because a property is off-plan doesn’t mean it doesn’t already have a unique history and character. Many off-plan property opportunities come in the form of redevelopments, which come with their own set of benefits.

Another added bonus of buying a brand new property is that they come with the latest technology. This often means they tend to be more energy efficient, which means they are cheaper to maintain – a great selling point when it comes to finding a tenant or buyer in the future. 

Service Accommodation Guide2. Tailored Build Progression 

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There’s no doubt that it can be nice to see exactly what you’re buying, but off-plan property comes with its own unique advantage. Since the properties haven’t been built yet, you can often have a say in what the final outcome will look like.

That means getting to choose from a range of different fixtures and fittings, from kitchen packages to the colour of the walls. Ultimately, having a say in how your property comes together means you don’t have to waste time redecorating after purchase, as you would often have to when buying an existing property.

This gives investors the security of knowing what their property will look like on completion, especially when you combine this customisation with the accuracy of the plans and CGIs on offer.

3. Time to Relax

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Another benefit of off-plan properties is the idea of knowing the completion date, allowing you to create a clear timeline of what needs to be done before everything is finished.

It’s natural to want your property as soon as possible, but as every investor knows, having the time to actually get your affairs, paperwork and portfolio in order is certainly a blessing.

We’ve all experienced the stress of trying to buy a property and it feeling like the stars have to align before you’ll actually get to pick up the keys. In these cases, time can run away quickly, but with off-plan property, you have enough lead time that this isn’t an issue.

This time is particularly useful if you need to restructure your portfolio and sell an existing property to finance your new investment. Likewise, you’ll also have plenty of time to organise the mortgage.

The final, and possibly most important, benefit of this extra time is that it means unforeseen circumstances don’t have to prove disastrous. For example, over the course of a build, it may become clear that owning the property is not actually in your best interests.

This is clearly never the goal, but the time afforded when buying off-plan property means you can sometimes sell the property before it completes and even make a profit.

4. Buying from a Professional

One of the most frustrating elements of buying property is that if the seller is inexperienced or disorganised, the time it takes to complete the purchase can drag on and on.

When buying off-plan, you’re investing with a company that has already sold countless properties. In short, they know what they’re doing and won’t waste time through inefficiency.

If you’re new to the property investment game and don’t already have a go-to team, a property developer can also point you in the right direction when it comes to finding a high-quality solicitor and mortgage broker.

Likewise, if you’re planning to rent out your property, a developer can advise you on what a realistic rent for the area is and put you in touch with a property management agent who can take all the hard work off your shoulders.

5. Capital Growth

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A great rental yield is one thing, but one of the wonders of property investment is that it allows you to sell up and cash in at a later date.

When buying off-plan property, one of the major benefits is that it allows you to enjoy capital growth before the property is even completed, assuming that’s the way property prices are going.

For example, if you were to buy a property tomorrow at £140,000 that didn’t complete until 2021, you’d have two years of capital growth before the keys are even handed over.

So, if the market is kind to you, you could see the value of your property increase drastically, simply in the time it takes to build.

Another way of thinking of it is that you’re buying tomorrows property at today’s prices, and in this market, that could mean you’re saving a lot of money.

6. Quick Exits

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We’ve already touched upon the fact that off-plan property can allow you to make an emergency exit if you need to, but it’s worth its own point to explain in a little more detail.

When it comes to paying stamp duty on your property, this is done at the point of completion. If you sell the property before completion, you won’t pay the stamp duty the new owner will.

So, if during the build the value has increased, you can sell the property for more than you paid, pocket the profit and avoid the stamp duty.

Be aware, though, that not every property developer will allow you to do this, so always check the T&Cs.

Conclusion

With these benefits, it’s pretty clear that investing in off-plan property can enhance your ease of purchase and the returns you get from it. 

With the ever-growing world of technology, developers and their teams offer the chance to invest in the cutting edge of property and attract a higher quality of tenant without breaking the bank. 

If you’ve read this blog post and off-plan property sounds like something you want to go down the route of, but don’t really know where to start, get in touch with our team here to learn more.

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