Buying Off The Plan - What You Need To Know
First time home buyers, owner occupiers, downsizers, upgraders, investors: when you’re looking to buy, purchasing property off the plan can be an attractive option for a number of reasons.
We’ve drilled down into some of the key benefits and things to consider when you’re buying off the plan.
Getting the Right Price
Buying property off the plan gives you access to first release pricing. You could purchase a property that may appreciate in value during construction, and ultimately be worth more once built. You’ll also be able to save for a longer period of time, increasing the initial deposit towards your home loan.
Choosing A Prime Position
What does your ideal apartment look like? Is it North facing? Should it have a spectacular view? Ground floor or top? Buying off the plan allows you to select a prime-positioned apartment perfectly suited to your needs. According to Adam Sparkes, General Manager at McGrath Projects, it’s good to get in early: that way you can look over the entire building rather than leaving it too long and potentially missing out.
Buying Brand New
Does the thought of living in an immaculate new apartment in a designer building appeal to you? There’s nothing quite like the feeling of that first soak in a brand new tub, or the taste of that first dinner prepared in your new kitchen.
Newness is attractive to tenants, too. Potential renters may pay a premium in weekly rent for the privilege of being the first to reside in the property.
Making A Savvy Investment
If you’re looking for an investment, buying offers tax concessions through negative gearing and depreciation allowances.
It’s a good idea to check in with your financial adviser or accountant to see how you can maximise available tax breaks.
Doing Your Research
Buying off the plan allows you to thoroughly research and find the ideal property to suit your needs. According to Sparkes, it’s crucial that buyers look beyond the CGI and marketing collateral to ask some crucial questions, “what is the background of the developer, what have they delivered in the past? What are their past achievements, have they won an award, which building team are they using?” He also encourages buyers to “inspect some of [the developer’s] past sites, talk to the tenants and just take your time in the process - you don’t need to make any rash decisions”.
It’s also important to research the neighbourhood: is it close to transport? Are there good schools in the area?
What’s the shopping like?
Lastly, it’s worthwhile asking how many properties on the plan have sold to date, who’s buying them, and whether there’s a number of presales required for the project to go ahead.
Getting Expert Advice
Always seek independent advice before you commit to buying off the plan. Sparkes stipulates that it’s absolutely crucial that you check in with your accountant, financial planner and mortgage broker before making any commitments. Get the contract for sale thoroughly reviewed by your appointed conveyancer or lawyer, to highlight any issues and negotiate any requested amendments.
Ready to get started? We’ve put together a quick checklist to summarise key points and help you make an informed decision.
- Define your budget. How much are you willing to spend, and how much can you save during the building phase?
- Put together a wish list. What does your ideal apartment look like? What aspect are you after?
- Research the developer. What’s their track record? Visit past projects if you can and chat to residents.
- Research the builder. Likewise, what’s their track record? Have they won any awards?
- Explore the neighbourhood. Can you picture yourself living there?
- Talk to the experts. Get in touch with your financial planner, accountant, mortgage broker and lawyer before you make any decisions.
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