Off Plan Property Investments
Off plan property investments have provided excellent returns for many investors in many emerging countries and even in some established holiday locations.
Interest in overseas off plan property investment has been fueled in recent years by lower interest rates and stock market returns and the increasing scope and affordability of international travel.
- Off-plan investments can offer investment property (and holiday home buyers) the potential to achieve returns of between 10-100% in just 24 months.
- In some countries, profit on your property investment can be free from capital gains tax if sold prior to completion.
- If you decide to keep the property to obtain rental income, excellent yields can be achieved.
- Guaranteed rental agreements can also provide very lucrative and avoid the need to find tenants for periods of up to 5 years.
Off Plan / Pre-Construction
When you buy property 'off-plan', you are buying a property based on the drawings, floor plans and artist impressions by the developer or promoter. Sometimes, the property development has not even started to be built.
Types of off plan / pre-construction property include:
- residential and commercial buildings
- apartments, condos and houses
- commercial units
- resort properties (e.g. golf courses, ski resorts etc)
Why buy property off-plan?
The recent poor performance of the stock market and pension funds has led to many people turning to property as a sound financial investment. The main advantage to buying property off-plan is that you will be able to buy the property at a much cheaper price than if you were to buy it completed, however there are many other benefits:
- Off Plan property is cheaper than normal property. You can often get discounts of up to 20%
- It only requires a low deposit (typically 5-10%)
- You can get a high return on your investment by locking in today's prices for a purchase carried out in the future
- You can sometimes give input and make requests to change aspects of the final design and layout
- Payments are staggered easing cash flow
- You can get in early and negotiate the best price on a development
- Many off-plan schemes will guarantee a rental income for a fixed period thus lessening your risk.
- Investing in off-plan property is very flexible and there are many various investment strategies which buyers can employ. Once the property is completed, it is up to you what you do with it - you could move in yourself, rent it out or sell it on for a quick and easy profit.
Why is Off Plan Property Cheaper than Second Hand Homes?
The developer of a typical development in pre-construction phase is always exposed to risk. In order to cap this risk as quickly as possible and limit bank loans and other debts, properties are sold as "off plan".
Prices are kept low as potential buyers cannot see a physical property at this stage and their decision to buy is purely based on location, artist impressions, diagrams and sometimes computer simulations.
In addition to competitive pricing, the property, due to the fact that it is in reconstruction, allows the investor to benefit from an excellent finance structure. In some cases, a deposit of only 10 - 30% of the value of the purchase is payable. The balance of the new property is payable upon completion and can sometimes be financed by a mortgage.
Off Plan Property Hotspots
All countries featured on Fair Deal web sited have been carefully selected on the grounds that:
- The off plan development is in an emerging holiday or tourist destination
- or simply because the off plan development is in a country / region where the economy is solid and growing at a rate faster than other nations.
Our Property Investment web site provides essential information on buying investment property abroad and is packed with research, background information and reports on economic and tourist factors influencing property investment in various hotspots around the world.
