Published: 04/07/2020Buying off-plan offers many benefits for investors and buy-to-let landlords.
London remains one of the top worldwide locations for foreign property investment, and there are enormous opportunities for a wise property investor when buying property off-plan.
Below is our guide on what you should consider when buying off-plan:
The early bird catches the worm
It's usual for developers to secure a certain number of sales before construction is complete, by advertising the project's desirability. Therefore, it's advantageous to get in quickly and be in a strong position to negotiate a fair price especially when there is a drop in the value of sterling. Some developers also offer additional discounts for investors purchasing multiple properties at any one time as an added incentive.
Invest today for tomorrow's growth
As a rule of thumb, buying a property off-plan, with a completion date two years hence, will show an increased capital growth value in line with the market. It can add value to a property, especially if purchased at a discounted price from the outset. It also means you can maintain the existing property and invest in new properties further down the line.
Spreading the cost
Most developers allow you to make staged payments when purchasing off-plan. Spreading the costs removes the stress of having to find a large deposit, which is a huge bonus and enables you to keep the funds in the bank for as long as possible; the interest accrued can help with purchasing white goods or furnishing packs.
Stamp your personality on the property
An advantage of purchasing off-plan is that you have a blank canvass to work with. It gives you the option to tailor your property's design to one that suits you while being built. Getting involved at the outset means you have more say over the finished product and developers are usually quite flexible, offering options to suit every budget. They can also arrange a furniture pack so that your property is ready to go on day one.
Fire doors, smoke alarms, and fire-redundant materials are standard as well as high-level security locks and alarm systems. Most new developments offer a twenty-four-hour concierge service as well.
Parking spaces are reserved at the time of purchase, saving a considerable amount of money compared to buying one later.
Location, location, location
When buying off-plan, you are generally able to choose where the property is in the development: aspect and whether you have a balcony or terrace can influence the rental yield hugely.
Up and Coming
Buying in an area that is being, or about to be regenerated, is a shrewd move. It usually means that the transport links are improved, as are the shops, schools, amenities, and public spaces.
Warranty as standard
A 10-year National House Building Council's (NHBC) Buildmark warranty will come with your new build so that a leaking roof that needs replacing six months down the line is covered. As a prospective homeowner, you can rest assured in the knowledge that your property is a high standard and that costs that arise due to failure to meet these standards during construction, will be covered. However, always check the small print as warranties will differ from developer to developer.
We highly recommend that snagging should be carried out before completion.
Finally, it may seem obvious, but one of the main advantages of purchasing property off-plan is the simple fact that it means you are guaranteed to have a property upon completion. While others will be left to acquire any remaining properties at market value or above, you can relax knowing that you have a property that meets your tastes and standards.
To find out about rental yield and how it can be achieved in a particular development, please talk to our team on 0203 137 7877.