Investors routinely consider off plan developments. Homebuyers are relatively less savvy with off plan developments. It has become a custom, almost ritualistic, that homebuyers should check out completely finished properties, take a tour and then evaluate the monetary pros and cons along with checks of the property before choosing one. There is nothing amiss in that widespread practice but off the plan developments have some advantages which can’t be matched by ready to move in properties.
But as a first time house purchaser – what are some of the benefits?
- The first big advantage is the cost. A finished or completed properties that are ready for occupancy will cost much more than off plan developments. It is very difficult to generalise since there are many factors influencing the cost, yet one can safely say that a finished read-to-move in property will cost more than an off plan development property. The phase of development during which you invest will affect the cost as the sooner you invest, the cheaper an off development property will be.
- The saving is not just by the virtue of lower cost of the property or ask price. There are other savings as well. The stamp duty, for instance, is much less. You are perhaps aware that stamp duty gets influenced by the value of the transaction. The higher your property is valued, the more stamp duty you shall pay.
- Off plan developments offer the option to customise. You can get the plans as approved according to the building codes. You can make changes to these plans and get the developer to have them approved before further construction kicks in (but generally this cost is over and above the purchase price - be sure to ask and find out what are considered as extra costs). You can change floor plans, finishes, layouts, views and everything else about the property. These are also possible with ready to move in properties but you would have to replace what’s already there. With off the plan developments, you can decide before the installations are carried out.
- The initial down payment could potentially be much less. You need to pay 10% of the value of the property in most cases. This is lower than what you pay for a mortgage. Since many people plan to buy a property for years before actually buying it, this 10% makes sense. First time homebuyers can make the deposit, have the property allotted to them, get it completed over a period of time when they can save more money and easily opt for the mortgage by the time the property is completed and handed over.
Still not sure if buying off plan is for you? Chat with us for professional and expert advice!
