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Considering buying off-plan

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joycey

New Member
How well protected would my money be when buying an investment off-plan? It concerns me that I’m ultimately buying something that doesn’t yet exist?
 
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Michelle Barringer

Member
Forum Partner
hello - this is where your due diligence comes in - you need to check the previous track record of the company (and individuals within that company) and check the current status of the project to ensure that there timescales are realistic. You should also look at the payment schedule and ideally look for a project where you can make staged payments so that the asset value is increasing as your investment increases. If all goes well off plan can be a great way to make money as the asset is increasing in value though the build phase as the market grows but the prices are fixed at the time of purchase.
 
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Luke Masters

Member
Premium Member
@joycey everything Michelle has said I concur with due diligence is absolutely key, the other safe guard is making sure the developer has an insurance policy to protect any deposit monies you put down.

Provided the seller’s new home warranty provider gives protection for buyer’s deposits (which most warranty providers for example NHBC and Premier Guarantee do),this should not be a problem for any buyer or cause any real concern.
 
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Judith Beilby

Member
Premium Member
An off plan investment can be a good way of locking in capital growth during the build phase of a project however this needs to be balanced with scrupulous research into the actual market value of the completed unit, the track record of the developer and the legal pack outlining the terms of the purchase.
It is not uncommon for new build developments to run over plan by a few months so I would build this into your expectations.
 
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nmb

Well-Known Member
While off plan developments can create significant investment returns they also offer the greatest degree of risk. The fact is that the earlier you invest in any development the greater the risk although this can be mitigated to a certain extent with due diligence and legal agreements. Where you are investing in off plan developments you should also ensure staged payments based upon performance as a further incentive to the property developer (and a way to protect your capital).
 
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