Off-Plan Property Investment

How to Find Off Plan Property

 
To buy Off-Plan property you should either find your trusted developer/agent or find a suitable development to suit your needs. If you’re opting to choose a developer first, then this goes back to building trust and performing your due diligence.

Look into how well the developer has performed in the past, and make sure you are confident in the delivery of the project.  If you opt to choose your development first then you should be looking to research potential areas, as well as the regeneration, demand and opportunity within those areas.

Here’s a breakdown of the key things to look out for when you’re looking to make a good Off-Plan property investment:
 

Location

The location of your investment is absolutely key when looking to stimulate growth within your purchase. Almost the entire UK property market is growing but some areas faster than others. As an example, since the 2016 Brexit vote property prices in regional cores have increased by double digits – Birmingham leads the way with growth of 16%.

Regional Growth/Regeneration

Watch out for regional growth plans such as Birmingham’s ‘Big City Plan’ which aims to make transformational changes to create a world-class city centre. Regeneration in key areas can create new amenities, attract new business and build better connectivity – all contributors to rising tenant demand.

Transport links

Transport links are always highly-desirable when considering Off Plan property investments, attracting working professionals that want an easier commute. As an example, consider the two-largest transport developments in the UK right now – Crossrail and HS2 are delivering faster, more efficient services across the Midlands and the South which in turn is attracting a new wave of tenant demand.

Rental yields

Discover the hotspots of tenant demand before you consider making a Buy-to-Let Off Plan purchase and don’t be afraid to choose quality over cost. A quality product attracts a premium tenant that will deliver premium rental yields. This also ensures a consistent stream of rental income to mitigate void periods.

How to Buy Off Plan Property?

 
When you’re looking to buy Off Plan property, it works in a slightly different way to a traditional Buy-to-Let investment.

All investors need to invest upfront is their deposit, which is usually around 20%. Once the deposit has been paid, there’s nothing else to be paid until completion.

A mortgage for Off Plan property is not required until this point, when the remainder of the balance is due (whether that’s paid in full in cash or by the aforementioned mortgage).

It’s during this time that property prices in the surrounding area could increase, which would drive up the value of your investment without you having to do a thing.
 

Find Out How You Can Finance Your Investment

Selling Off-Plan Property Before Completion

 
When it comes to Off-Plan property investment, as with any investment, there are many different benefits but you should always have an exit strategy.

Many investors run with a strategy of selling off-plan before it completes but this can come with several risks. That said, if your circumstances change, you may find yourself in a position where selling is necessary.

Selling Off-Plan before completion is dependent on your contract. Some developers stop investors selling to avoid ‘flipping’ off-plan property. If your contract allows selling before completion, just remember that more often than not, you can’t simply sell the Off-Plan property to a third party unless the contract allows you to.

If you decide to sell before completion, don’t forget to consider any capital gains tax, selling commissions and legal fees that come with the transaction.

5 Tips for Investing in Off-Plan Property

What are our top tips for investing in Off-Plan property?
 
Know Your Objective

First of all, you need to know why you want to invest, how much you want to invest and when you want to invest, these are your objectives. Most clients are investing for different reasons; some clients are looking to generate a passive income or create a pension fund but typically most Off-Plan investors will be focusing on the long-term.

Research

Once you’ve decided on which direction you want to go in, you need to start researching your. Researching areas and markets that you’re looking to invest in is exceptionally important. You’ll want to either find a high-yielding locale in an established market or find an emerging market that is demonstrating plenty of potential going forward.

Trust

The most important thing is knowing your developer and having the trust in the project. Going to meet the agent or the developer on site or looking at one of their previous developments should fill you with the confidence that you need to invest. Any reputable developer agent will be able to make you feel comfortable from the start, answering any questions that you have about the process or their past performance.