Another common risk of buying an off-plan property for investment is that property market fluctuations could impact your investment returns.
As with any investment into property, house prices and rental costs can go up as well as down. A lot of the time, this is due to the area a property is based in.
The issue with these market fluctuations is that if the value of a property goes down drastically, property investors can lose out on capital growth income when they sell the property.
Or, if rental costs decrease, rental income will be lower, impacting the overall rental yields of the investment.
How to Avoid This Risk
Again, your research is crucial if you want to avoid the risk of investing in the wrong area and seeing your returns drop.
Different rental returns from advice on property investment can be found throughout various cities and towns across the UK.
If you’re buying a new build, researching its location is essential. This will help you understand which areas present the best investment opportunities, with growing house prices and high rental yields.
Research past housing market statistics for the property’s area and look at future UK property market growth predictions.
When you buy a property in an area that ticks all the boxes as a buy to let hotspot, you lower the likelihood that you’ll experience a drop in property prices or rental returns with your off-plan purchase