There are scores of professionals at the ready to advise investors to purchase an apartment off-the-plan. Whether it’s for a SMSF, or just as a general investment, it’s important to realise that there are often only two people making money from off-the-plan apartment sales – the developer, and the person recommending that you purchase the property.
Should You Buy Off the Plan: What are the potential pitfalls of buying off-the-plan?
- Any money ‘saved’ on stamp duty is often paid at settlement when the bank valuation comes in at 10%-15% under the purchase price.
- Apartments bought off-the-plan can take up to 7 years to realise their original purchase price.
- Apartments bought off-the-plan often come onto the rental market at the same time. This can significantly devalue their rental return.
- Developers may create the Owners Corporation, striking exorbitant fees and locking owners into long term contracts to manage the complex.
- Developers can facilitate an imbedded network, locking residents into higher than normal utility costs. The developer receives the difference between what you would normally pay and what the utility supplier charges you.
So should you ever buy off–the-plan?
As a Buyers Agent, I’m not against buying off-the-plan. If you’re looking to invest in a development, a Buyer’s Agent can navigate the tricky waters and assist you to maximise your investment.
By ensuring you are buying the right size and floor plan, in the right location, a Buyer’s Agent can help you to maximise your short, and long-term returns. But most importantly, a Buyer’s Agent will also return the commission a selling agent would have received from the purchase – making up the shortfall in the valuation. A Buyer’s Agent can also help you to identify the unique apartments on offer in individual developments to ensure that you’re not investing in a dime-a-dozen apartment.
Looking to buy off-the-plan?
Our team of experienced Buyers Agents can assist you to find the best investment property for your needs and budget. Avoid the pitfalls of buying off-the-plan by speaking to one of our expert Buyers Agents today on (03) 9645 3418.