Why you should consider investing in off-the-plan properties
While some think investing in off-the-plan properties is a complex and risky strategy, there are some substantial benefits and rewards to be had.
Key to investing in off-the-plan properties is understanding how the process works and what you need to consider.
Read on to find out more!
Benefits of off-the-plan properties
- Depreciation
As off-the-plan properties are brand new, there are some fantastic depreciation allowances to be had, which can result in significant tax savings.
- Higher rental yield
With off-the-plan properties, investors have the advantage of a brand-new property that can attract higher rental yields. (Find out more about rental yield in our article here.)
- Smaller deposit at the start
Off-the-plan properties usually require a smaller deposit than established properties. Plus, there may be options to negotiate on the settlement date, giving you more time to save and/or organise the finance.
- Less stamp duty
Off-the-plan properties often offer significant stamp duty savings, thereby reducing the overall investment cost.
- Property prices are on the rise
Property prices are currently rising, and if they continue rising during the construction period, there is the potential capital gain when the property is finished.
What to look out for
Like any property purchase, there are some associated risks with off-the-plan. Delays in the construction process can lead to a longer settlement period, which may affect financial planning.
Off-the-plan properties also probably require a little more research and due diligence. Fully research the developer by looking into past projects and experiences – that way you know the quality of its work. You may also want to check for any legal or financial issues too.
Closely examine plans and specifications so you fully know what you’re purchasing. For instance, what is the heating and cooling system, and what are fittings and finishes like, and what guarantees does it come with?
Off-the-plan properties do come with multiple elements in the contract, and pre-purchase agreements will have details about deposit requirements, conveyancing process, building specifications, and the construction timeline. It’s really important you understand every aspect of what you are buying into.
Seek the advice of a specialist to give you peace of mind that there aren’t any hidden catches in the contract.
As with any property you’re thinking of investing in, assess the location of the development – what amenities, schools and lifestyle options does the location offer?
We always advise to speak to your accountant or financial specialists so you know exactly what to consider for your financial situation and your property investment strategy.
Off-the-plan property opportunity
We currently have a great off-the-plan package in Edgeworth with a very reputable developer.
We believe the location makes it a great investment opportunity, and potentially it will have great returns of $1100+ per week.
Get in touch with us now to find out more about this great investment opportunity.
Call us on 02 4956 9777, send us an email to mail@newcastlepropertymanagement.com.au or better still, come into our Cardiff office so we can talk more.
We can also explain how our property management services can reduce stress and save you time.