How to Buy Off Plan

Buying off plan isn’t a difficult process providing you follow the steps outlined below:

1. Find a property development that looks attractive

 Obviously if you’re interested in buying off plan you’ll have a good idea of the type of property you want to buy from the start, but this doesn’t mean there will be a suitable development going ahead any time soon in your area. Depending on where you live it can take some time to find a property development that sparks your interest so keep your eyes open and register with a few off plan property websites.

 2. Arrange a mortgage in principal

 It’s pointless putting a deposit on an off plan unit if you have no way of buying it when construction is complete. Talk to a mortgage lender and arrange for finance before you reserve a plot, and make sure it’s a buy to let mortgage if you intend to rent the property out. Sometimes this isn’t always possible if the property is not going to be completed for a long time.

3. Reserve your plot and pay your reservation fee

 Providing you are approved for a mortgage you can go ahead and look at the off plan plans. Look closely at the layouts of each property type, and think about things like the views and parking spaces before making a firm decision. When you’ve made your choice reserve the unit and pay the required reservation fee. This normally amounts to £1000 but it could be more or less.

4. Instruct a surveyor

Buy to let mortgage lenders will want to make sure that the value of your chosen off plan unit, and the achievable rental amount, is adequate for the mortgage you require. By instructing a surveyor you can quickly provide the necessary valuations.

5. Exchange contracts and pay your deposit

Even though your chosen property is off plan (not yet constructed) you still exchange contracts, just as you would with a normal property purchase. At the time you exchange contracts you’ll also be expected to pay your deposit which is normally between 5% and 10% of the property price. Your reservation fee is deducted from your deposit amount though.

6. Learn your completion dates

Most off plan developers provide investors with two completion dates. The short stop date is the earliest date on which the development will be complete while the long stop date is the latest date the development will be complete. It’s important to remember with off plan developments that there is never a firm completion date given.

7. Check the property over

A few weeks before the completion date you’ll be informed that the property is ready to check. You can either do this yourself or you can employ a professional company to do it for you. This forewarning of the completion date gives you an opportunity to view your off plan property and check everything is as it should be.

8. Complete the purchase

When the completion date has been reached and you are 100% happy with the property your mortgage lender will transfer the agreed funds over to the developer. All you need to then do is find tenants for your off plan purchase and start making the profit you’ve waited patiently for.