Buying property off-the-plan is a property investment method that is gaining popularity at a very high rate in the Australian property market. What potential investors need to know beforehand is that this type of investment is not for the faint-hearted. Only a brave and optimistic investor would spend a fortune on property that does not exist. However, risk-taking is what compounds business and particularly property investment. The brave have gone this way and have reaped handsome rewards after only a year or two. The idea behind buying-off-the plan is to acquire property at the prevailing market prices and hope to capitalize on the capital appreciation when the investment is completed in the foreseeable future.
So, how can you maximise your success chances when buying-off-plan? An astute investor will focus on every tiny detail before making any financial move. Property investment must be well thought out or you will find yourself in an awkward financial position. It is therefore essential that you grasp how the Australian off-the-plan property investment operates.
Usually when there is an off-the-plan property launch, the big investment firms are given the first priority. The initial prices for units are heavily discounted to encourage fast buying. Immediately after the first sale, the remaining units are floated to the general public. If you are a sole property investor, this is the right time to make your move. Remember the earlier you table your interest in the property, the higher your chances of getting a good discount on the property investment. You also stand a better chance of getting the better units. When buying such property, the estate agent should be able to provide all the off-the-plan property marketing material for you to assess. Normally they have show units that match the specs of the upcoming property.
Before making the property investment, you must conduct thorough market research to establish the potential of the property in which you are planning to invest. For instance, if they are rental units, how would you rate the demand for rentals in the neighbourhood? How is the surrounding infrastructure? Are there vital amenities that would make habitation easy? How good are the transport links and security? All these are factors that will dictate the rate of return on your property investment.
If the property is for resale, you need to know the prevailing property market trends. You also must identify the target market for your property investment before procuring the property. Local estate agents can help you to determine the most likely source of demand for such property. It is also wise to establish how many other such units have been sold out around the time you are purchasing yours. Otherwise you could come up against stiff competition, which will eventually slow down the property disposal and the targeted profit on the property investment.
Property specs are another vital consideration you must make. If, for instance, you are targeting a family home clientele, what are the unit dimensions? Small units would be suitable for single professionals but unsuitable for family homes. In that case, selling such property might be hard.
Investment Property Finance