Buying off-plan or completed property is a great question and one which comes up a lot. As a company who works on both, there are some plusses and minuses on each.
The biggest issue with the off-plan property is making sure it will be complete on time and making sure you have the correct processes in place in case of a large problem arising.
Even with completed property, there are unknown issues you can come across if you don’t know the history of the property or who built it.
In both cases, working with a reputable company that can show comprehensive due diligence is important.
At Baron & Cabot we have over 100 checkpoints we look at on any property before we decide to work on it. We have to reject a lot of properties when they are unable to meet such a stringent checklist.
This means that if it is off-plan we not only check the finances, track record and delivery of every contractor and developer working on the project, but also have in place full refunds if the development has a significant delay.
In addition to this, almost every project has the money invested held in escrow or fully insured to make sure our clients have full protection.
While we have never needed to use this it is critical to have it in place.
So why do people choose off-plan over completed property?
Normally there are four major factors:
- You tend to get quite large discounts by investing early. For most developments we have negotiated 5-10% discount off-plan, we retain a large proportion of the remaining properties which go to estate agents at higher prices for owner-occupiers.
- If you only need to put down a 20% deposit, get a 10% discount and the property value grows 5% it’s one of the best investment periods you will have. Your ROI without any mortgage or tenants to deal with is huge,
- You get the pick of the properties in a block,
- All of our new properties have 10-year build warranties so you shouldn’t have any major costs of repairs.
Like anything, you should start by speaking to one of our specialists and looking at both options and the ROI v’s delay risk for both. We build this into a cash flow for you so that it’s really simple to see which would perform best for your specific circumstances.