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Questions to Ask Before Buying Off-Plan

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    Are You Considering Off-Plan Property?

    Off-plan investments are some of the most popular types of property ventures in the UK. For first-time investors or those that are new to the property industry, however, you may be feeling unsure of what off-plan property means and what off-plan investments involve.

    So what is off-plan property? Buying off-plan is the process of purchasing a property that is yet to be built or is still under construction. This type of investment is advertised to investors using advanced technology known as computer-generated imagery, which is created to show potential buyers what the finished product should look like.

    If you’re an avid investor, you may have already pondered the possibility of investing in off-plan property, but due to scepticism, you haven’t gone through with it. This might be due to several misconceptions associated with off-plan investments that scare investors away. Even if you’re ready to purchase an off-plan property, there’s likely to be a number of questions to ask when investing in off-plan property that you’ll think of. To clear up any misconceptions and answer any commonly asked questions, we’ve created the following guide which will outline everything you need to know about off-plan – your next investment. Keep reading for more 4 Questions to Ask When Buying Off Plan Property!

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      Off-Plan Property

      1. What are the Benefits of Buying Off-Plan Property?

      Purchasing off-plan property can be seen as a gamble, but when you think about it, every investment you make is a risk. There are actually numerous upsides to investing in off-plan property that ultimately outweigh these risks. One of the most important questions to ask when buying a new build house or flat is whether or not there are benefits to this type of strategy, and here are some of the main advantages of investing in off-plan.

      Discounted Rates

      One of the main benefits of buying off-plan property is that you can receive substantial discounts off the purchase price. Many investors have received up to 15% off the existing price, which has helped them start their investment with a high financial stronghold. These discounted prices are also ideal for first-time investors who want to start small, as buying off-plan means they don’t have to break the bank to get involved in property investment.

      Immediate Income

      As with most investments, one of the most popular questions to ask when buying off-plan property revolves around the potential income and return on investment you can make. What many investors don’t realise is that off-plan investment can provide you with automatic returns, unlike other investments where you need tenants to live in your property to generate a substantial income. Instead, an off-plan investment allows you to start generating profits even while the property is still under construction if the investment you’ve agreed on comes with assured yields for a set number of years. This can help you save up a significant amount of capital, which can be used for personal use or put towards any property fees, such as maintenance or legal costs.

      Capital Appreciation

      This is something that every property can benefit from, but with an off-plan property specifically, your property can actually increase in value while still in the building stages. This means that once construction is complete, the property could be worth a lot more than you paid for it, especially in today’s housing market where property prices are on the rise in certain areas. This asset increase will allow you to up your rent, making your off-plan investment one of the most profitable investments in your portfolio.

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      2. Where Should I Look For Off-Plan Properties?

      Another of the most common questions to ask when buying off-plan property, and any property in general, is what the best locations to invest in are. When trying to find out how to buy off-plan property and make it a success, it is crucial to look in prime locations that can provide excellent profits. In the UK, some of the best areas to invest in property are Liverpool and Manchester in the North West, due to high yields, strong capital growth potential and high demand from tenants like students and young professionals.

      Here at RWinvest, we have several off-plan developments in the North West which can guarantee high rental returns and significant capital appreciation. This includes our Parliament Square development which is currently underway in the thriving Baltic Triangle neighbourhood in Liverpool, offering yields of 7%. These luxury apartments are set to feature contemporary furnishings, hi-tech security, eco-friendly features and exceptional views, guaranteed to provide high rental returns.

      If you’re interested in finding an off-plan property in Manchester, you could invest in new build developments across the city. Many apartments are designed to target young professionals due to their proximity to central Manchester and are set to include luxury features like a cinema room and a gym, enticing potential tenants.

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      3. Who is Developing the Off-Plan Property?

      Before going forward with any property investment, you want to be sure that you’re buying a property from a reliable and experienced company. Along with the property company that’s selling the development, you should also research the developer that’s behind the project. When researching the developer, here are some of the most important questions to ask when buying a new build house or apartment.

      Do They Have a Good Track Record?

      If the development company behind the property you’re interested in investing in have a strong track record of successfully completed projects, this is a good indication that they’re experienced and capable of delivering a high-quality finished property. You can find this information out online, usually on the company website. For projects that have completed, you could even head to the development site to take a look at the finished build and assess its quality.

      Do They Have Strong Reviews?

      If the developer you’re interested in buying off-plan property from has good reviews from past customers and clients, this is another sign that they should be a good company to work with. Many companies will offer customers a chance to leave reviews through platforms like Trustpilot and Google Reviews, which can normally be found on their website. The more positive reviews you can find on the company, the higher the likelihood of a smooth and successful off-plan investment.

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        4. What is the Off-Plan Buying Process?

        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?

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        How Can RWinvest Help?

        When investing, it is essential you have the right tools and the knowledge to ensure you make a smart investment. At RWinvest, we have over 15 years of expertise in helping investors thrive in the property sector and improve their portfolios with great off-plan opportunities. We will also guide any new investors through every single process to ensure that everything is done right and complies to investment regulations.

        If you’re serious about investing in off-plan developments in the North West but still have questions to ask when buying off-plan property or want to find out more information, you should get in touch with our expert team, who can help you make the right investment today.

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        Author

        Reece Pape

        Reece Pape is a property writer at RWinvest. Reece is passionate about keeping property investors updated on must-have information and housing market news, utilising the latest property market statistics and data.

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          I can honestly say they have put my mind at rest from day one answering all my questions I had , true professionals, I am not experienced in buying off plan or for a rental income but I have to say the process has been smooth from sales to Chloe in client care and now I’m handed over to the final stage for the site visits
          I feel very relaxed and happy with how amazing the team have been. I I can’t wait now to see the end built ! Thanks 🙏

          Kelly Webber

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          I have had the pleasure of experiencing exceptional customer service from RWinvest. Adam and Michelle were remarkable and were exceedingly supportive in facilitating the acquisition of two properties in Liverpool, at "The Gateway." Their guidance was instrumental in the purchase of the properties and I express my utmost satisfaction with their assistance, and I am inclined to not only endorse but also consider any property advertised by RWinvest.

          Narendra Rai

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          I am very happy and satisfied with RWinvest. Their team was always responsive, supportive and friendly throughout my investment process. Thomas from RWinvest team was especially very supportive and he made sure that I have all the necessary information at the right time. He helped me with all my queries, and helped me to complete my investment process smoothly and with peace of mind.

          Babak

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