Buy a property off-the-plan
If you are looking to get onto the property ladder by investing in a property, but you’ve been faced with obstacles such as affordability of property in your suburb of choice, saving for a deposit on a home loan, or balancing the financial demands of owning your own home, you don’t need to give up yet. Another option is buying a property off-the-plan; which comes with a number of financial and practical benefits.
What does buying off-the-plan mean?
First thing’s first. Buying off-the-plan means purchasing a property that hasn’t yet been built. You’ll be making a purchasing decision based on the location of the development site and usually artists impressions and plans of what the property will look like.
Advantages to buying off-the-plan
- Lower property prices: The purchase price of properties off-the-plan are often less than established properties; which means you can get a better property for your hard-earned dollars. It’s all part of the incentives to invest early on in a development project.
- Less financial pressure: Unlike an established property, when buying off-the-plan you’ll typically have to pay a deposit to the developer then the remaining balance on completion of the property. This means you have between saving for the deposit and the actual settlement – spreading out your financial commitments and lowering the barrier to owning your own home.
- Stamp duty savings: In most cases, when you buy off the plan you can save on stamp duty. This means that your deposit can be lower than if you were to buy an established property. When buying a house and land package off the plan, stamp duty is calculated on land value, not the house and land.
- Growth potential: In some instances, buying off the plan can turn a profit before the property even settles. If the developer prices the property at today’s prices and your purchase doesn’t settle for another two years. You could be in for two years of capital growth – particularly if the market heats up soon after you purchased your property. The extra advantage, is that those two years of growth have only cost you the deposit, and no stress or other overheads from the property.
- Depreciation: Unlike an established property, a new property has more items that can be depreciated over time. Commonly, you can make a range of tax claims, including appliances, building depreciation, floor coverings, window coverings, video security systems, air-conditioning systems and even solar panels.
- Reduced power bills: A new property must meet particular building codes and energy efficiency standards are now more efficient than ever. This means that your property will be more energy efficient so you’ll save on power bills. And if your property comes with solar panels, you save even more on energy costs. Learn how Reventon’s investment properties meet today’s high energy efficiency standards.
- No expensive repairs: A brand new off the plan property is likely to reduce the chances of you having to pay for repairs. They also come with a builders warranty. And when purchasing a property with Reventon, you can be assured that if any repairs are needed in the warranty period, it will be the same builder who built the property carrying out the repairs. As with any purchase it’s always best to do your research and it could be wise to seek advice of a property expert before you make a decision.
Considerations when buying off-the-plan
- Cancellations: There are rare instances where property developments get cancelled after buyers have paid their deposits. If your development is cancelled, you can get a full refund of your deposit – but its often a huge letdown for buyers, who may have their heart set on a particular location; and who may have missed out on other properties in the meantime.
- Delays: Some developments get delayed, which means that buyers need to wait a long time before they can move into their home. Even if there are no delays, there may be some time between buyers paying for a deposit and moving in – this can be positive for some who are keen to get their finances secured, but for others it may be a frustrating wait.
- Sunset clause: A sunset clause is a statement in the sale contract, which buyers need to be aware of. The clause states a date by which, if the property is not completed, the original contracts are declared null and void and buyers receive their deposit back. Some untrustworthy developers have been known to purposefully delay their projects so they can null their contracts and sell properties at higher prices. This is why its important to work only with trusted developers and people who know the industry.
Buying off-the-plan could be your entrance into the property market. Reventon has supported thousands of clients into home ownership this way – and we can support you to do the same. All it takes is an initial chat with one of our expert advisers, to discuss your circumstances. To discover how Reventon can help you purchase an off-the-plan property that will best suit you, please get in touch for a free consultation.