An off-the-plan property investment is ideal for someone looking for a long-term investment. A few considerations before you invest in an off-the-plan property investment include; the time factor, the taxes, maintenance and more.
Most people consider a property investment as a piece of property with a house already placed on it. An off-the-plan property investment is a vacant piece of land. Land is the one thing in life we will never be able to fabricate or make more of anywhere in the world. It is the most valuable asset you can own. The great thing about off-the-plan property is that it is less expensive to purchase than land with a house.
An off-the-plan property investment is a better long-term investment for anyone looking to make money because the value of land continues to rise every year. It is true that a property with a house on it can instantly make you money in rental fees and is worth more. However, land with a brand new house that has never been touched is worth twice as much as an investment 20 years old. Why not build a house on a piece of property and secure a larger profit?
When people consider off-the-plan investing, they need to consider the time factor. If you are looking for a quick profit, off-the-plan properties are not for you. You need to understand it can take a year or two before your new house is built and ready for rental or for sale. You will need to work with a builder who gives you a fair rate so you both can make money. The planning and building phases can both take a year or two but will be worth the wait.
The taxes on a property investment without a house are far less than land with a house already established on it. This is because the cost is lower and obviously you won't pay capital gains because you are not making a profit yet. Over the time it takes to build the house, you will not pay taxes on the house, just the land. When the house has been built and is ready for someone to move into it, the government will send someone to assess the property and establish the new taxes. The good news is that in Australia, the expenses of building can be used for negative gearing and you will show a loss in profit.
Buying a property investment with an older house on it can be a nightmare for some investors and even put you at a loss of profit, especially if the house has serious problems you didn't know about prior to the purchase. Building a new property ensures everything is new from the concrete foundation to the fixtures on the walls. Nothing will need to be replaced and all of the appliances will have warranties to cover them. Renting older homes can be expensive if things are continuously breaking. Pipes can get corrupt over years and need replacing. Tearing out the walls and flooring to repair a water pipe break can cost thousands of dollars.
Off-the-plan property investment is the best long-term option for investors. If you are looking to make a smart decision with your financial future, considering an investment property building a house is a great idea. You will save on taxes, maintenance costs and enjoy a higher profit.
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