Tag Archives: Buying Off Plans
As your single largest investment, you’ll probably spend a great deal of time searching for or designing your perfect home. When house hunting, you’ll consider things like location, price, market trends, costs and the condition of the property. And you’ll probably have a list of things you absolutely have to have and those you’re prepared to forgo. Deciding whether to buy an existing home or build a new home is an important part of your decision. To help you make an informed choice, we’re taking a closer look at each option.
Buying An Existing Home
The primary advantages to buying an existing home are convenience and cost. Once you have pre-approval, you’re able to shop around, pick out the home you like and then make an offer. Working closely with your mortgage adviser and your real estate agent, you’ll already know how much you have to spend, and have a list of properties that fit your requirements.
Despite a number of steps involved – arranging finance, attending open homes and auctions, getting inspections done – once your offer is accepted, you’ll be able to move in within a month or two, all going well. Buying an existing home is ideal for those buyers on a tight schedule – relocating for a new job or whose children are starting school in the area
The Cost Factor
In many cases buying an existing home may be more cost effective, particularly if you’re looking to move into an established neighbourhood near your work, school, friends or family. You may find it hard to find available land in these areas, so buying an existing home will be your only option. It also means that your garden will already be established so you won’t need to worry about starting a lawn, planting shrubs or waiting for trees to grow.
On the other hand, buying an existing home means you may not get exactly what you want, and you may need to spend money remodelling, repairing or redecorating any outdated features of the home. These additional costs could make the difference in deciding whether to build or buy.
Building A Home
While building a new home is not as convenient as buying an existing home, it does mean you get the home you want. One of the biggest advantages to building a new home is the fact that everything is new. You’re also able to build in features that make your home more energy efficient, like heating, cooling, insulation or air filtration systems that are environmentally friendly, saving you money in the long term.
In fact, your home may quite literally be better for you as it’s less likely to have health concerns or toxic materials you may find in an older home – things like asbestos, lead paint or mould. And it can be built using materials that are better for the environment like Energy Star rated appliances and more efficient plumbing systems.
The Cost Factor
While the cost of building involves a number of upfront costs, it’s easier to recoup your investment long term. A newer home will require less repairs and lower ongoing maintenance, and is likely to fetch a higher resale price when you decide to sell.
The biggest drawback to building your own home is that it’s not immediately available for you to move in, and the costs may be higher. But money and time aside, building your own home can be emotionally satisfying in that you feel you’re achieving a dream and living in the home you created; a home that perfectly matches your style and personality.
Build Or Buy
Whatever you decide, it’s vital you seek professional advice before you commit to any decisions. Determine how much you can spend and obtain a pre-approval from your bank or lender. This will help frame any conversations with builders or sales agents should you buy.
Buying off the plan can be a great move for some security in your investment. It has advantages such as locking in a price to safeguard against rising values, as well as a number of tax advantages.
Off the plan properties may just be the solution for investors who need to organise their finances or first home buyers who currently do not have enough capacity to purchase. Here are some ‘do’s’ and ‘don’ts’ to ensure you get the most out of your investment opportunities:
Research which suburbs will provide you with the best growth and the best yield. For example, in some inner city suburbs, capital growth on a two bedroom apartment far exceeds other apartment types, although one-bedroom apartments generate the best yields.
Register on project agencies’ databases
Understand that sales people will always contact the potential buyers who are the easiest to contact and the most responsive. Further, people who register with project marketers’ databases often get the first opportunity to see the project.
Usually the first third of the project is sold, not only to members of agencies databases, but also to those members who act quickly. In most projects, prices are increased after the first third of the project is sold. Smart buyers want to be amongst the first half of the purchasers because if they are not, they are in effect paying more for the same property.
Understand the value of time
Generally, property prices increase annually between five per cent to seven per cent and may occasionally dip in value. Don’t panic: over time, your investment will serve you well. And with the strong performance that our property market is seeing at the moment, you can feel confident.
Buy in the areas people want to live
A recent study showed the top three priorities people have for choosing somewhere to live
are proximity to schools, work and transport. Some other things to consider are shopping
centres, parks, cafes, restaurants, water and the size of the property.
Don’t buy without knowing who the key people in the project are
It is always important to know the profiles and previous projects of the developers, architects, interior decorators and the project manager. Don’t buy without having your solicitor look at the contract. It is important to choose a solicitor who understands off-the-plan contracts. An experienced solicitor is worth their weight in gold.
Don’t expect the agent or developer to wait for you to organise your finances
Most banks will not give you an approval more than six months before completion. Get an
indication from your bank that you will be okay, and then go for it.
Don’t distrust your agent
Your agent wants to do the right thing by you, and will encourage you to get in early and grab the apartment of your dreams or a great investment.
Don’t forget the reason you are buying
It’s either a great new home or a solid investment. Never confuse the two reasons.