It is vital to ensure that your off-plan property investment is properly planned and managed. Below we have set out some of the common issues to be aware of:
If you are investing in the property to live in yourself, then remember that you won't be able to move in right away! You will have to wait until the property has been completed and delays are often encountered.
Always assess the reliability of the developer. If the developer gets into financial difficulties then your investment may be in trouble. Always check the developer's credentials, ask their previous customers for their experiences and view examples of their previous projects.
You will need to take proper independent legal advice to ensure that your investment and rights are protected during the build process. Usually you won't legally 'own' the property until it is completed. Guarantees should also be drafted into the contract about the finished quality and structure of the building. You will also probably require clauses providing how you get your money back if the developer goes bust.
You will need to do plenty of research into the area and location you are investing in. You will have to know what the area will look like once the development is completed - are there be any other separate ongoing developments and if so, what is their nature and how long will they last? What will the area look like in 10 years time?
Often it may not be possible to get a mortgage for an off-plan property as most offers are only valid for a limited period (e.g. 30 days). It is usually necessary to get specialist financial advice when dealing with an off-plan purchase.
You will need to take proper independent legal advice to ensure that your investment and rights are protected during the build process. Usually you won't legally 'own' the property until it is completed. Guarantees should also be drafted into the contract about the finished quality and structure of the building. You will also probably require clauses providing how you get your money back if the developer goes bust.