Reasons why buying property off-the-plan makes sense
Buying an investment property is an exciting decision, but it can also be a confusing one. Are you better off buying an established home or a newly constructed one? Or should you invest in a project that’s yet to be built?
For some people, buying “off-the-plan” is a daunting idea. After all, you can’t physically walk around the property; you’re looking at floor plans and glossy brochures instead. But while the bricks and mortar might not be in place yet, there are plenty of good reasons why an off-the-plan property could be just the investment you’re looking for.
Here are some reasons to consider buying off-the-plan:
Buy tomorrow’s property at today’s prices
When you pay your deposit to a developer, you’re securing both your ownership of the property and the price you want to pay for it. But, crucially, although you’ve paid your deposit, the actual settlement date for the property could well be one or two years away depending on the development. That gives you the opportunity to earn capital growth on the property before it’s even built — and before you’ve even paid for it.
Off-the-plan gives you more time to save
That long settlement period also gives you plenty of time to save money, which can ultimately reduce the amount you need to borrow on the property. It also gives you time to shop around for the best mortgage.
Early buyers get more attractive prices
Developers often provide attractive prices to early buyers. That’s because they want to get construction underway as quickly as possible. The quicker the apartments sell in the beginning, the sooner they can start the project.
Getting in nice and early has one other obvious advantage — you get the pick of the bunch. Want a ground floor apartment with a courtyard? Want a balcony with river views? Want three bedrooms instead of two? Getting in first means you get to pick the best of what is on offer. Investors who wait until construction is complete will find the most desirable apartments have already sold.
You’ll appreciate depreciation
The Federal Government offers great tax incentives on new properties. It’s all part of a push to encourage people to build. New investment properties — like off-the-plan apartments — qualify for the maximum depreciation entitlements the Government offers. That’s money in your pocket instead of the taxperson’s. Depending on the size of the property, your depreciation amount could be tens of thousands of dollars over your first decade of property ownership.
It’s brand NEW!
When you buy an established home, there’s always a list of jobs to do to bring it up to scratch. Maybe it needs a lick of paint, perhaps the garden needs doing, or maybe it needs new carpets throughout. When you buy off-the-plan you’re getting a brand new property: in the latest style, with the most up-to-date technology and facilities, and built to the latest specifications.
Want to know more about buying off-the-plan?
Buying off-the-plan is a great way to get yourself on the property investment ladder or expand your current investment portfolio. The Western Australian Government has plenty of advice for those considering investing, including helpful explanations of the sorts of legal and financial considerations to take into account.
Interested in snapping up one of Perth’s newest off-the-plan apartments?
If you’re looking for an off-the-plan investment opportunity (you don’t have to be an investor), Vue Tower in East Perth offers a great location with city and river views.