Does the sound of buying into muddy ground before a single brick has been laid sound like risky business to you? Would you consider purchasing a property whose completion date is a few years down the line? But what if this type of investment is one of the most profitable and one of the best in income generation?
Buying off-plan property is one of the current property investment trends in the many growing property markets worldwide, and is projected to increase in popularity in the coming years. The main lure of off-plan developments is, of course, the price. Purchasing a property that is still in its development stages at today’s market prices will definitely offer significant returns by the time of its completion when the property’s value (as well as the market prices of the future) will substantially increase. Furthermore, buying off-plan guarantees you a property that is new-build and therefore, with zero maintenance expense. As property mentors advise, the best buys in town are big developments located in promising up-and-coming areas.
Any which way, buying off-plan is definitely not for the faint of heart. The off-plan investment route has been widely popular in recent years, as it is slowly gaining credibility as a viable property investment strategy. Still, the prospect of buying into the intangible scares off quite a lot of people. Admittedly, the whole business of off-plan property investment is somewhat of a gamble. However, there are always ways to minimize risk and maximize returns.
As a general rule in property investment, it is always wise to get in early. At the initial phases, you are not only secured of a lower price, but also take your pick from prime locations still available. Moreover, it becomes more difficult and more expensive to buy property at the later stages of development.
Before you commit yourself to investing in off-plan property, do a thorough research on your potential investment. Two essential things you need to know: if the price is right and the property’s capacity to give you a return on investment. Look into the sale and rental prices of similar and near-by developments. Do not be too trusting of the developer’s estimate. Though it would give you a ballpark figure, these estimates are usually on the optimistic side.
Buying off-plan properties in the United Kingdom is definitely an excellent strategy, but only in the up-and-coming developing areas. For example, Liverpool is gaining a lot of noise and interest lately, since it was heralded as the 2008 European Capital of Culture. Prices for some parts of Liverpool and its neighbours are slowly on the rise, especially with the new much-anticipated retail developments in the area. Other good sites in the UK are Preston, which has recently been awarded City status and is bustling with retail outlets. Another area to benefit from its local government’s regeneration plan is Blackpool, which now offers hotels and leisure facilities to attract new businesses and wealth. To conclude: watch out for growth areas and make sure you buy well below market value from distressed sellers.
Added: by Utopia Realty
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