When a property is bought before the completion of its building area, it is known as an off plan property. The term "off plan property" is used because the property is bought only by looking at its structural drawings and the plans.
The trend of buying off plan properties has become popular over the years. The prime reason behind this is that the purchase generally involves hassle free procedures. As they are newly built, investors are sure that their maintenance requirement will be minimal. UK property investors see off plan property as a potential lucrative part of the property market.
In fact, investors are benefiting by buying off plan properties over the years. Important points to consider are;
1) Certainly there are advantages as well as disadvantages of buying off plan properties. The first and the foremost of the advantages is that one can secure a property worth a good fortune with very little investment. Sometimes the layout may be just a few hundred pounds. It is one of the best ways to make use of every penny that one has saved over the years.
2) By buying off plan property one can purchase a property that can have great potential in the future at today's property prices. You can take the advantage of the capital growth potential if you are careful about the forward pricing. The property can even be sold before its completion for a profit making thousands of pounds.
3) Another advantage of buying an off plan property is that you can make changes in it that meet your own requirements. Though the amounts of changes that can be made depend on the development and the developer, it surely makes the property different from the others in the same development.
4) Before buying an off plan property one should also be aware of its disadvantages as well. As the prices of properties tend to fluctuate the prices of the property may go down.
5) One should also be aware of the fact that the new builds are often overpriced. There are very few real comparisons to ascertain the real price to the property. The mortgage may not be the worth it is believed to be.
6) It is extremely important to make sure that the developer you are dealing with is reputable and financially sound. The most important of all is to make sure there are plenty of owner / occupiers in the development. Otherwise buying in a development where everyone wants to sell or rent out the property saturates the situation that may lead to a status quo. The only way out of this quagmire is to lower the asking price or the rental price, which is a potential loss.
7) There are number of ads on the radio saying that how people who bought off plan property and now are owner of a property, which is worth a million pounds. Be careful, the companies offer 15-20% discount because they get special discount from the developers for bulk purchase. If all the properties in a development are completed at the same time, the buyer can pick and choose and you have to compete with the others to get through the situation. Even if you try to rent the property, which is identical to the other properties, the rent goes notoriously low.
Good research is needed before buying an off plan property. Don't skip this step!
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