More often than not, the most economical way of purchasing property is to buy it off-plan - which, to anyone not yet enlightened on the subject, means exactly what it says. To buy off-plan is to purchase property after having seen only the architect’s plans - as opposed to a completed house, apartment or villa. Particularly fashionable in the overseas property industry but also common-place with development property here in the UK, off-plan is a popular purchase option for shrewd investors and those seeking a holiday home alike. So, what are the benefits of purchasing in this way and why is it such a cost-effective option?
There are numerous reasons why people choose to purchase off-plan, with finances featuring at the top of the list. Prior to construction, developers often sell their property at substantially below its market value, giving early investors the opportunity to buy the same property as those who will purchase upon completion – but at ‘entry level’ prices. With off-plan property currently available from around 40% below market value, it is obvious the gains can be substantial. The property purchaser therefore benefits from not just a holiday home that they can enjoy the usage of, but an investment property that they may resell at any point and, in doing so, generate a significant profit. As developers often throw in guaranteed returns and enticing finance options to boot, it can be quite a hard offer to refuse.
Considering how much higher property yields often are than bank interest rates and how stocks and shares can lose their value overnight, it’s no wonder so many of us are turning to property investment. Did you know that 50% of the names on the Times Rich List made their money through investing in property?
Purchasing off-plan also takes a lot of the time and effort of buying a property out of your hands. The developer has done their research on the plot where they are building and are likely to have a great deal of information available to help you as you make your decision on whether or not to invest. Developers are legally bound to tell the truth in their sales and marketing and as such, there is a lot to be gained from studying the research that they have carried out on the plot of your property and the surrounding area.
The benefits of purchasing off-plan are too numerous to detail here, but the following are a few reasons why buying property in this way is well worth considering:
- Below market value property, regardless of the market
- Lower maintenance costs than older property
- Developer guarantees and returns
- Resell at any point before, during or after construction
- You do not have to tie up all your funds, allowing you to free up money for other investments
- Some payment structures allow payment in affordable instalments
- Guaranteed finance is often available
- Developers buy their construction materials in bulk and this saving is passed on to the purchaser
- Particularly in large developments, property will often cost substantially more upon completion than the entry level prices
- A greater choice of property is available
- It is cheaper and more straightforward to customise your property during construction than after the build
- Most properties come complete with build and finish warrantees, giving you considerable savings in the long term
- Early investors can choose the best plots with the most desirable positions at the best price
- Property prices have doubled every 10 years since the 1950’s
As you can see, the benefits of purchasing property off-plan are numerous and the returns can be quite substantial. As with any investment, you should be sure to research the company that you are buying from, and with overseas property it’s a good idea to purchase from an AIPP (Association of International Property Professionals - www.aipp.org.uk) registered company.
Founding members of the AIPP, overseas property developer Barrasford and Bird Worldwide have successfully handed over more than 2,500 properties. With five star Greek spa property available at over 40% below market value with prices from just £22,000, Barrasford and Bird is an excellent place to start in your search for off-plan property at an affordable price from a developer with a solid reputation.