Off Plan Property Investment – FAQ

What is an off plan property investment?

An off plan property investment is a unique type of investment whereby you purchase a property that hasn’t actually been built yet. You buy on the basis of the architect plans, the artist’s impressions and the property developer’s presentation.

Why would I want to buy off plan?

Choosing an off plan property investment can save you a great deal of money if you commit to buying during the first phase. You also get a brand new property in 2-5 years’ time but at today’s prices.

What do I need in terms of finance to buy off plan?

When you find an off plan property investment that suits your requirements you need to reserve a unit in the first instance. This generally costs £1000 per unit. Then 3-4 weeks later, when you exchange contracts, you’ll be required to pay a deposit of between 5% and 10% of the purchase price (minus the reservation fee). The remainder of the purchase price, plus any stamp duty, becomes payable on completion of the property and can be paid with cash or with a buy to let mortgage if you have one in place.

What should I look for in an off plan property?

This will depend entirely on what you intend to do with the property following completion. If you intend to let your off plan property investment then you should look for something that will attract tenants in the future e.g. a designated parking space, easy to maintain gardens, secure entrances in the case of apartments etc. You should also make sure the property you buy is the type of property people in the area will be searching for. So for example, Inner city developments will probably attract working couples or singles and a one or two bedroom apartment is the perfect choice in this case.

Is there any risk associated with buying off plan?

There’s a risk involved in any type of property investment and off plan property investment is no different. Occasionally property developers go bankrupt, and sometimes property developments fall through or fail to get off the ground for other reasons. If this happens you may get your deposit back, but then again you may not – it all depends on the reasons behind the failed development and the conditions of the contract. Admittedly not many developments go wrong but it is worth remembering that there’s always a risk.

Where will I find off plan property investment opportunities?

Just prior to a development’s launch the property development plans are released to a select number of estate agents. At the same time a launch date is announced and a big promotional event is organised at which you get the opportunity to reserve an off plan unit. So, if you’re truly interested in purchasing an off plan property you need to make yourself known to the estate agents that property developers regularly use for launches. Phone around and get the names of these particular estate agents and then keep an eye on their websites etc. so you don’t miss out on a golden opportunity.