About 20 years ago, off plan property purchases in the UK were extremely rare and only really came about for investors from the Far East along with a few select property speculators in the City of London.
Truth be told, today it is a firm segment of the buying process for UK buyers and there is a huge pool of investors whom are engaged and interacting with this method of sale, what with the many opportunities throughout the UK at the moment.
While of course it can feel risky to purchase an apartment or a house before it is completed the reality is there a big number of developers out there whom have proven themselves time and time again, plus they tend to take stage payments depending on what phase of the development they are at.
With a market being squeezed and an increasing number of buyers going after the same number of property deals, more and more investors are turning their attention to the off-plan property market due to the significant increases in value once they are built, this often mean purchasing off-plan is a financially solid decision.
When you buy a property off-plan it often means you are purchasing a property at a price that is well below its future market value and this very principle has become common place as a method of sale throughout the UK and Overseas property markets. This is also an ideal option especially if you are looking to resell the property once it is built to someone who was not willing to take the risk of buying off-plan.
You would normally need to pay a deposit of just 10% to 20% of the property value in order to secure the off-plan property purchase.
Another great advantage that you have when it comes to buying off-plan is that you can select the ideal unit to suit your needs, requirements or even tastes and budget versus purchasing once completed and there are only a handful available for purchase.
While buying a property off-plan is far from “risky” it is obviously not as certain as when you buy a new property which is already built and you can get inside it and touch and feel it.
There is also the possibility of the property not increasing in value as much as you would have expected, or even at all, after the construction phase. In this scenario, you would end up holding onto the property in order to see some capital growth which could affect your overall investment strategy particularly if you are the buy, build, sell and repeat type of investor.
In order to mitigate a good number of risks you would be best served looking at off-plan properties that are being built by reputable developers, that are definitely in areas with growing levels of investor demand. Finding an area that is near transport facilities or undergoing regeneration is always a good strategy.
Working with an investment specialist who knows what they are doing is always critical when it comes to identifying which off-plan property is ripe for making a great return.
FJP Investment is a team of investment specialists sourcing a wide range of investment opportunities both in the UK and overseas.