Another of the most common questions to ask when buying a new build house is based on the investment process itself. Whether you’re a seasoned investor or buying your first investment property, there are things you need to understand before you know how to buy off-plan. At RWinvest, we are dedicated to guiding our clients through the off-plan process, while also helping them with the following procedures. Here are four crucial steps that you need to take when investing in off-plan property.
Assess Your Finances
If you’ve invested before, you will understand the importance of assessing your financial situation for the entirety of the construction period, to help you establish if you have enough capital to invest without lending. The more cash you have to invest, the better your investment will be, as any profits you receive will be yours, so you will not owe any mortgage fees or any other debts.
Reserve the Property
One of the main differences between typical buy-to-let properties and off-plan is that you are given a chance to reserve the property before it is built, which is ideal as you will get to choose the one you want. This process involves reservation fees, which is usually £5,000, to take the desired unit officially off the market. They will then carry out any feasibility checks to ensure you’re able to afford the property price and any additional fees.
Contract Exchanges
Once you have paid your reservation fee, you will then have 28 days to exchange contracts with the developer. This will require legal assistance, which our team at RWinvest will be happy to help you with, as they will recommend experienced and knowledgeable solicitors that will ensure all contracts are compliant. Before the contracts can be confirmed, you will also be required to pay a deposit, which is usually around 10% of the purchase price, to secure your purchase and fix the cost of the property.
When investing in off-plan, you must wait for a conditional exchange to ensure that your property is well-built and meets quality standards before it can be signed off. This will be completed by your chosen warranty provider, who will determine whether the property is ready to be inhabited. Once this has been confirmed, utility companies will then receive approval to connect your property to the grid, which is known as the unconditional exchange.
Completion and Handover
When all exchanges have been confirmed, you can proceed to completion. Reaching this point will depend on the construction process, which usually lasts for a period of months or years, depending on how big the project is. At RWinvest, we work closely with the developers to ensure you receive regular construction updates as well as offering at least two to four weeks’ notice before the date of completion. Once you have reached completion, you will then be handed the keys to your property and shown around to make sure everything is how you wanted it. It is then yours to do as you please!
You can check out the entire off plan process on our website and can read specific topics like “how to sell off plan property?“
