- Prices from £119,950
- 7% Net Rental Return
- Located in Liverpool City Centre
Off-plan property is popular with investors as it offers the potential to combine substantial capital appreciation with a long-term return on investment. The main advantage of buying property this way is to secure a purchase price lower than the market value once construction is complete.
Although the purchase process differs from that of a usual pre-built purchase, this type of investment offers an extremely flexible and viable option in the right market conditions.
Purchasing property off-plan also provides investors with greater control, allowing them to secure the best units, and influence design and build.
There are a number of benefits, including discounts during the construction period and the option to make bulk purchases. If a property has been bought off-plan at a discounted price, by the time construction is complete and house prices have risen, significant value will have been added.
While some investors sell at a higher value during the construction process, the best strategy is wait for construction to be completed and for the property to have tenants. It is important to research the local property market to ensure that the rental yields in the area are high and your investment a safe bet.
The success of a property investment of this type depends on the appeal of an area, as investors need assurance that demand in the rental market will be strong upon completion. City centre developments are especially strong as infrastructure and amenities are already in place. Property developments of this kind often coincide with urban regeneration initiatives, where substantial public/private investment is already in motion.
At RW Invest we understand our local markets. We only connect investors to opportunities that deliver high capital appreciation in locations where rental yields are high.
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Buying off-plan means buying a property before construction work has commenced. There are many advantages to this type of property investment, such as securing the best units and having an influence on design and specification during construction. As the value of your investment will increase during the construction period, off-plan property is an excellent way to achieve capital appreciation and secure a high return on investment. Before you begin, however, there are certain factors to consider.
Comprehensive market research and forecasting is essential when purchasing to achieve the most from your investment. Without understanding both the local property market and the local socio-economic climate you will be investing blind. For example, questions such as: what demographic is the development aimed at? Is there currently existing demand? If not where is the demand coming from? What are the factors likely to affect the market in the short-term? Is there a particular public or private investment that is set to improve local market conditions?
As an investor, you should be aware of where the major regeneration areas in a city are, where infrastructural improvements will be creating new value in the years ahead, and where commercial investment is taking place.
Successful off-plan developments are dependent on a high standard of existing infrastructure: good transport links, modern amenities, shops and restaurants, and educational facilities, are all crucial to create demand among prospective tenants.
As with any property development, there will be more and less desirable units. Investing is this type of property investment is a great way to ensure that you get the pick of the bunch. Ask your agent to see floor-plans and CGI images to ascertain which units have the best views. North-south orientation is another big selling point for prospective tenants, as is proximity to lifts and public access in apartment blocks. By investing this way you get to understand the pros and cons of a building before a brick has been laid. You can then ensure the property meets your requirements by influencing interior design and specifications.
Discounts and incentives are also often available for this type of investment, such as interest on deposit during construction and discounts on bulk purchases.
Despite the many benefits of structuring your investment in this way, it’s not suitable for everyone. The majority of lenders don’t design mortgages for off-plan purchases, so securing the funds can become complicated. This form of property investment is an especially good option for cash buyers.
At RW Invest we specialise in connecting investors with the best opportunities. We only work with the leading developers and rental agents, and always undertake comprehensive due diligence on all our partners. Our consultants have expert knowledge of their local area and are ready to help you make the best decisions.