Choosing to invest in off-plan property can be a hugely rewarding decision for a number of reasons. However, finding the right property is only half the job.
Since you’re purchasing something that doesn’t exist yet, trusting the developer is paramount. That’s why choosing between off-plan property developers is such an important step. Even if you choose the best property on paper, it could be ruined by a poor developer.
In this article, we’re going to explore some of the considerations you need to take into account when choosing who to invest with. Before you look at developers, though, consider the following…
We all want incredible quality for a low price, but no two property developers are alike, so you need to take the time to identify your priorities in more detail.
If the quality of the finish is your number one priority, you’ll need to find a developer that prides itself on this. On the other hand, if you’re in a rush to invest, quality may come secondary to a quick turnaround.
Think of it this way. You go to Ikea for low cost and convenience, not for bespoke furniture made of the best materials. If you want the latter, you’d expect to pay a premium and have to wait.
Property developments are no different. Each developer has their own style, so deciding what you want is the first step to finding one that matches your aspirations.
Some property developers will offer incentives like covering stamp duty costs or paying for your legal fees. This can be attractive but may require you to use, for example, the developer’s solicitor.
If you’re an experienced investor, you may already have a team of advisors you trust, and so many of the incentives offered by developers could be less impactful.
Of course, some developers may offer discounts for early investors, but these should not be taken at face value straight away. This is for the simple reason that some developers build discounts into their pricing, so always be sure to research local sale prices to understand whether you’re really being offered a discount.
As we mentioned, you need to trust the developer if you’re going to buy off plan, and their experience is a great place to start.
Find out about the background of their team and inquire about projects they’ve recently completed. Bear in mind, though, that property development is a fast-growing industry, so research some of the smaller developers as well. They may not be well-known, but you can often find better service with a younger developer than an established one.
Not many people pick up a hammer and build a house on their own. That’s because building properties takes a host of different skills and expertise.
Part of being confident in your developer is being confident in their partners. So, take the time to find out who they work with, from contractors to architects to solicitors.
Your chosen developer will likely also recommend themselves or a partner to manage your investment for you, so take the time to research these businesses.
When choosing an off-plan property developer, it can be tempting to pick one that is building in a major city centre. There’s nothing wrong with this, but you should consider the type of tenant you want to attract as part of choosing a location.
For example, much of the properties in city centres attract younger professionals. This is great unless you want to attract families because you think they’ll occupy the property for longer.
If you’re new to property investment, you may want to buy nearby so you have the security of being able to keep an eye on it. Again, this isn’t necessarily a bad choice but you should double-check whether you actually live in a strong investment area. For example, the North typically achieves higher rental yields than the South.
Much of the off-plan property you come across will be leasehold, meaning finding the right developer is even more important, as they’ll likely be your freeholder as well.
How you can maximise your investment is changing, with serviced apartments now providing a new way to achieve exceptional rental yields. Therefore, you want to be free to use your property as you see fit in the future.
With this in mind, try to find a developer that offers a leasehold agreement with as few restrictions as possible.
This may seem like a particularly picky way to choose between developers, but checking whether the property site is kept clean can help you find one that cares about quality.
If a site is not kept in good condition, it could be a sign that the small details aren’t their number one priority.
Of course, every building site looks like, well, a building site so you should expect some mess, but it should at least have some semblance of organisation.
As you may have predicted, we’ve saved the best till last when it comes to how to choose between property developers. While cost may be your first consideration, anyone with experience of purchasing off-plan property knows that project clarity is just as important when it comes to avoiding stress.
Does the developer have a clear timeline of the project and a set deadline they can share with you? How effective have they been at delivering projects on time in the past?
Every project has potential speed bumps, so are they aware of where delays may occur and how do they plan to minimise them?
Finally, do they have projections for capital growth and rental yield once the project has been completed and how have these been calculated?
Get a good answer to those questions and you could be onto a winner.
Finding the right off-plan property developer may take a bit of research, but not doing so could cost you more in time, stress and money further down the road.
Of course, when it comes to choosing a property developer, one of the best indicators is your gut feeling when you speak to them. It’s no surprise then that you should speak to multiple developers before you make a choice.
To find out if Taylor Rhodes Group is the right off-plan property developer for you, get in touch today and speak to our team.