Buying a property off plan - Things You Should Know

Written by Posted On Monday, 16 June 2014 05:18

Buying an off-plan property can prove to be an excellent property investment opportunity. But what is off plan property? In a nutshell it is property which is still at the planning stage. You would then go on to sell it once it’s complete and for a profit. It’s particularly worthwhile when the property market as a whole is booming although it’s still a good strategy to buy an off plan property in London where homes are always in demand.

Buying off plan property in the United Kingdom

Buying a property off plan means paying for a house or apartment before it’s even been built ie it’s still at the drawing stage (or nowadays the 3D CAD simulation). Occasionally the building work has already been started but essentially it will still be a long way before completion – it’s often up to one year before you can look towards selling off plan property and the property may actually have even been sold several times by a wholesaler or consolidator before it goes on the open market. This is known in the trade as ‘flipping.’ Off plan property is commonly sold as a complete development, although it’s also possible to buy apartments and houses individually too. Usually the quicker you buy, the more profit you stand to make (a profit one fifth of the value of the buying price isn’t uncommon during a property boom and is still possible today when selling off plan property in London.

Why do developers sell off plan property

There are many reasons why developers sell early such as the fact they need the capital to continue with the remaining development or, when they come to market it, they want to boast that some properties have already gone thereby creating a ‘rush’ on those remaining. By selling several apartments at a less expensive starting price they can market it at that starting price, despite the fact the remaining apartments are priced much higher.

How to buy off plan property

Developers commonly invite investors and estate agents to a non-public launch promotion for the apartment or housing scheme (a ‘sneak preview’ in other words). This is where the particulars of the property will be ironed out. Then it’s a case of researching the locale, previous projects by the developer, whether there are factor fees and what similar off plan property is selling for. Here at Hurford Salvi Carr we can show you how to take advantage of early investment opportunities for off plan property. But we will also point out some of the pitfalls that, once you’re aware of them, can easily be avoided.

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