Buying Off the Plans

Over the past few years with the onset of the credit crunch, sales of ‘off the plan’ projects have taken a bit of a hit.

Not only are there less apartments being built, wary investors and owner-occupiers are now a bit more discerning before parting with their cash.

Previously, it was definitely the hunting ground for potential purchases who were more than happy to sign on the dotted line and buy an apartment without having stepped inside.

However, recently times have changed. Investors and owner-occupiers are a bit more wary of the potential capital gain from off-the-plan purchases and many have shied away fearing that they could actually incur a loss on their investment or that the project will never get off the ground.

These types of investments, however, can bolster your portfolio and in some recent cases investor and owner-occupiers have made a decent capital gain in only a few months.

You just need to know what to look for. Here are some tips to get you started.

• Do your homework. Do thorough checks of the development company – its current and past projects.
• Get a valuation on the unit or apartment so you can compare this to the purchase price.
• Check that consent has been granted for the project.
• Check any titles against the company’s name.
• Read the fine print for cancellation and force majeure clauses that the developer can use to cancel the contract.
• Check to see if you can modify the plans to better suit your needs?
• Do all the other due diligence checks you would when purchasing an existing unit, apartment or house.