Buying off the plan has become an appealing and realistic option for Australians looking to buy their first home. For many it’s the promise of a newly built home. Others like the fact that these houses are in newly-developed areas with plenty of potential for growth. It sounds too good to be true. Sometimes it is.
Many things can go wrong when you decide to buy off the plan. What you’re promised in the 3d-rendered imagery isn’t always what you get. There’s also been many horror stories associated with off the plan properties. Some never get finished when property developers fold. Other houses simply don’t get built to the high standards that they should be.
Shocked homeowners have been appalled when they realise they’re new houses lack some of the basics. You may have seen these houses featured on news stories. Some end up having rooms with doors that don’t have enough space to open. Then there’s houses made with the cheapest and most unreliable materials available on the market.
While the cost of your off the plan property may seem cheap. Don’t be too confident about the costs involved. This property type has a habit of revealing it’s true costs after you’ve already signed on the dotted line. Here are just some of the pitfalls to watch out for:
Owners corporation fees
The developer may create an Owners Corporation for your property and surrounding ones built at the same time. This locks you into a long term contract that requires paying exorbitant fees to help manage the complex.
A slow rise in value
If you’re looking to turn your off the plan property into an investment property there’s a few things you need to consider. Apartments bought off the plan can take up to a staggering 7 years to reach the value of their original purchase price. So you may not be able to increase rent or make a profit out of selling it until at least ten years.
Low rental return
It’s common for an off the plan property to be built at the same time as others that surround it. The downside is that all of these properties tend to be similar. When you’re looking to rent this property you’ll discover it’s hard to raise the rent because so many other properties around it may stay at the same low rental rate.
Getting locked into an imbedded network
Your developer may end up making your property part of an imbedded network. This may force your property and the ones around it to be locked in with the same utility suppliers. So your property could end up being stuck with higher than average utility costs. This setup also sees the developer receiving the difference between what the average household would pay and what you pay the utility supplier.
We’re not saying all off the plan properties are bad options. We just wanted to point out the bad things that can happen when builders don’t deliver what’s promised in their marketing campaigns. But there are plenty of ways to safeguard yourself from the pitfalls of buying off the plan. One of the best ways to protect yourself is using the professional services of a Buyer’s Agent.
A Buyer’s Agent can help you find the perfect off the plan property. Are you looking for short or long term returns for your new property? A Buyer’s Agent can factor in all of your preferences like this. Another advantage is that a Buyer’s Agent can help you identify unique property options from a collection of new off the plan houses. It’s often the more unique properties that can increase in value before the others around it do.
So before you consider buying off the plan, think about talking to the experts. Property professionals like Buyer’s Agents are usually experts in their chosen suburbs. They know how to identify a bargain and find properties that perfectly match your preferences.
Ready to buy off the plan? Learn more about the process by visiting wiserealestateadvice.com.
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