Benefits of Off-Plan Properties

INTRODUCTION

There are numerous advantages of buying properties from developers.  You have the option of either purchasing a new house fully built or buying before construction has finished (off plan).

In essence, buying off-plan simply means buying a house before it’s actually built. While this might sound strange, buying an off-plan property can be a smart investment. It maximizes profit.. It can be  lucrative or highly risky. It all hinges on where, what and how you do it.

The Advantages of buying off plan  

1.It is cheaper. Though the  risk of purchasing something that has not been completed is a thing to consider, the inconvenience of not being able to take possession straightaway (that is, move in immediately). This is a win-win situation for both buyer and developer. The buyer gets a property “on the cheap” and the developer gets some early sales.

“In essence, buying off-plan simply means buying a house before it’s actually built.”

(source)Get Homes Properties.

2. Potentially having your own input into things such as interior design, kitchen finishing,bathroom tiles, swimming pool, etc.

3.You secure purchase below market value If market prices are going up – as they do most of the time – buying your home before it’s completed means that by the time you move in, it’ll be worth more than what you paid for it.

4. You can buy the property with lower deposits and staged payment

Depending on the seller, some off-plan contracts have the supplementary merit of staged payments. This helps lower the burden of cost and benefits the investor that would otherwise have to deposit a hefty amount. You can pay 30% or 40% of the total price in installments before the property is completed usually within a period of 18 months.

5.Flexibility: Buying an off-plan property helps you plan your life without pressure. For example, where you plan on retiring in a couple of years, and you buy your retirement home in Lekki-Ikoyi as an off-plan property. You can start buying your retirement home today, go through your last year of working stress-free and move into your house just after its completion.

6. Customizable: Whether you plan to live or resell the property, one of the principal advantages of buying an off-plan is to be able to choose and customize most aspects of your next home. Unlike a completed development, you get a chance to select the ideal unit that fits your taste, needs, and budget. You can have the option of personalizing some aspects such as the kitchen, walls, or flooring, inserting swimming pool etc.

Finally: should I invest on off plan? 

The  answer is yes. But only if you know what you are doing, purchase in a good location, target the right type of property and buy from the right developer.

There are two primary ways of making profit from an off plan investment;  

1. Simple way

2. Advanced way

Buy and hold-the simple way: This method entails a buyer holding onto their investment for the longer term and seeing the discount gained as a bonus; icing on the cake. This is the only method recommended for those new to investing in real estate. It is simpler, less risky and there are fewer variables to contend with. You simply lock in the Flipping before completion. 

The advanced way: Buying a property off plan means initially putting down only a small deposit. The rest is often only payable when it’s finished or is to be paid in installments, depending on the project reaching set milestones. Deposits can be as low as 5% in certain cases.

For instance, you buy an off plan property for 75million Naira, initial deposits was 3.75 million  Naira (5%).

As demand increases, 7 months down the line, property prices in the neighborhood rise by 5% meaning the house that is still under construction will be worth 78.75  million Naira upon completion.

With regards to the right type of property, residential properties are by far the safest to invest in, due to the strong demand. It is advisable to work with reputable real estate agents like us (Gethomesproperties). We have access to a wide network of contractors who bring the best to the developer world. And it is stress free, have you Invested today?

 

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