Off-plan property can be one of the most profitable investment options for first-time or experienced investors alike. Without fully understanding what off-plan involves and the benefits of it, you could be missing out on some fantastic returns. That’s why we’ve put together this helpful guide that answers some of the most commonly asked questions relating to off-plan properties.
Frequently Asked Questions about Off Plan
What is Off Plan Property Investment?
Off plan property investment is when an investor buys a property while it’s still in the planning or construction stages. Unlike other property types, investing in off plan means that the buyer can only see how the property will look through computer-generated imagery and other technology.
What does Off Plan Property mean?
Off plan property means that the property hasn’t yet been built. The investor who buys it is choosing to purchase the property ‘off the plan’, signing a contract without taking a physical tour to see or inspect the finished outcome.
How does Off Plan Property work?
Off plan property works differently to more traditional properties. Those interested in buying off plan will get to see how a property will look with the help of computer-generated imagery. Some people are put off by being unable to see the property in person, but the benefits far outweigh any uncertainties.
Why buy Off Plan Property?
Buying off plan property can be cheaper and can create better returns than other properties. Investment companies tend to offer off-plan properties at a lower price as a way to entice investors. This way, by the time the property is ready for tenancy, it’s likely to have significantly grown in value.
At RWinvest, our off plan properties are offered at affordable, below-market rates. We see this as a major benefit to buying off-plan, paired with the higher potential for capital appreciation. Not only this, but the fact that new builds are so desirable is another reason to consider off-plan investments.
A lot of tenants, including young professionals and students, prefer new builds to older refurbished or period properties. Since an off-plan property will be entirely new by the time it’s completed, this creates a unique selling point that’s likely to help attract your first tenant.
How to buy Off Plan Property
To buy off-plan property, you first need to find the right property for you. Look online for developments based in your preferred location and priced within your budget. Then, find out whether you’ll be eligible for a buy to let mortgage or whether you’ll need to pay the upfront cost.
A lot of the time, it can be difficult to get a mortgage loan for off plan properties. This is usually down to timing issues, with most mortgage agreements only being valid for six months. Therefore, if the development doesn’t complete by this time, the buyer will need to re-apply which can be a time-consuming process. This is part of the reason why we require our investments to be paid in full rather than with a mortgage.
Once you find an off plan property of ours that you’re interested in buying, we’ll provide you with all the details and information needed to make a decision. Although we can’t give you a physical tour of the finished property, we can provide you with a look at the planned outcome with the help of virtual reality. By using computer-generated imagery, we can let potential investors see how the property is expected to look upon completion, helping them make a more informed decision.
Where to buy Property Off the Plan
The best locations to buy off plan property are cities and towns with a lot of capital growth potential. Off plan properties have a reputation for increasing in value before they’re even ready for tenancy. If your off-plan property has been built in a prime location, the chances of this happening are even stronger.
In the UK, Liverpool and Manchester present the best opportunities for capital growth. The north-west has the highest rate of house price growth compared to any other UK region, with predictions for even further growth over the next five years. Thanks to ongoing regeneration projects that are bringing lots of interest to these two cities and boosting the economy, investors who purchase off-plan property in Liverpool or Manchester are likely to see their property grow in value by the time it’s ready for tenancy.
If you’re interested in buying your first off plan UK property investment opportunity and want to find out more about our available properties, get in touch today. Our property experts are on hand to offer you advice about the best off-plan property for you, offering you guidance every step of the way.