If you are thinking of investing in property there are several ways to go about it. You could buy to rent, build to sell, or flip a property for profit. One other way investors make an easy profit of buying and selling homes it’s by buying off plan property. The process for making an off plan property investment is outlined below in more detail.
OFF PLAN PROPERTY
Off plan property means property that has yet to be built. The idea is to buy a property at current market prices and make a profit on it when it’s sold a year later. In a year’s time the market conditions will have changed.
It can be a risky form of investment as it’s based on the improvement of the housing market. However, in some cases profits of 10% or 20% can be made by purchasing a property before it is ready for sale.
DO YOUR RESEARCH
As with any purchase of property research is important. But it’s even more important when you’re buying an apartment off the plan. Since the property is yet to be built you need to pay particular attention to any concrete information you do have such as location and housing prices.
Before investing in an off plan property find out about the desirability of the area and what amenities are available there. Also research the market conditions for similar properties and its viability for rental. Without research you may be financially vulnerable.
Although it has become something of a cliche the location of a property is still one of the primary factors you should consider. It’s especially important when buying an off plan property that doesn’t yet have any infrastructure. The location is one of the best determining factors.
Consider the local area as well as the wider area. Is it being developed or regenerated? This could offer some appeal to potential buyers. Then consider how close the shops, parks, and schools are to property you’re thinking of buying. These are high priorities for many people.
KNOW YOUR MARKET
Before you invest large sums in an off plan property think about your target market for selling the property. Consult with local estate agencies to find out the type of people who buy in that area. The better you understand your customer the better you can cater to them.
Furthermore, with off plan property you will typically be competing with other investors and developers. Find out how many units of a development have been sold and who you are competing with. Knowing more about a property’s demand can give you an edge.
It’s always a good idea to research the property market and find out the average prices that similar properties are being sold for. This should give you a reasonable indication of the profit you can expect as a return on your investment.
But be warned. The housing market is continually changing and there’s no guarantee that house prices in the area will stay the same. As with any investment there is an element of risk involved, but with the right research and analysis you can make a calculated estimate.