Anyone can invest in off-plan property.
The good news is, that no investment experience or huge bank account, is necessary.
All you need is to spot a great investment portfolio, the right location, and the drive for future opportunities.
And you are going to be fine.
Since you already searching for ways to learn about how to invest in off-plan property, chances are that you already have an intro and the concept.
What you need to know is how off-plan property works.
In this epic guide, I’m going to discuss the exact strategy that you need to know so that you can put the right ideas in place.
And this takes us to the next chapter.
In this chapter, I’ll walk you through what exactly off-plan property is.
So, let’s dive in.
What is off-plan property?
Here, I want to give you the bare bones of how to invest in off-plan property.
To understand that:
First, you have to understand the whole concept, which is to know what off-plan property exactly is.
In a simpler version,
… Off-plan property can be defined as an uncompleted project.
This means, the property is either under construction or delayed for whatever reasons(finances, recession, and many more).
The good thing is that buying an off-plan property is way cheaper and comes with higher returns on the market.
How do I know?
I’ll explain…
This is a crucial part of the whole process, so you have to get this right.
First, if you are to see the best returns in terms of investing in off-plan property.
Take, bayut, they said something interesting, stating that factors that play a role in the property market value appreciation are the locality and neighbor’s popularity.
If the surrounding area is under development at the time of your off-plan property purchase but is steadily evolving into a potentially well-rounded community, then this would inevitably lead to an increase in the property market value.
This means that real estate investors can also see quick returns by selling before the completion of the project.
On the condition that the project has gained popularity in the market.
At this point, you need to tackle the market volatility side of things.
If you think the market is favorable, it fits your investment types, you know what try to buy into it early in case there is any feasible competition coming up.
This includes deciding your market and setting up a strategy better than the ones out there. This means you already have your idea and a plan to make your exact market come to life.
In fact:
Eystone did a fantastic job, stating that rental is the next big thing in real estate.
So, how did we predict this?
First, the amount of rent that is charged for a property is one of the key factors that predict the future growth of the real estate industry.
To help ease confusion.
We found out that the number of renters searching for property online rose to 18% in 2022, while we have direct home buyers rose up to 27% in 2022.
Take, Ibeju-Lekki, we predicted the rental apartments surge to increase to 800% by 2025.
And yes, that is right.
And why?
…Because we can’t deny the fact that one of the key areas of real estate is rental.
And so whether you buy off-plan or ready properties in Lagos, Nigeria.
Chances are that you will see your returns in 5 years depending on your investment goal.
Risk of buying off-plan investment
Every business come with a risk.
After all, it shouldn’t deter you from the first step.
If you are bold enough, congratulation!!
…You can proceed to the next step, what I’m about to say here.
- Market depreciation
If your market doesn’t look promising, you won’t gain a competitive edge over your competition.
And what that means is that your property won’t sell and you won’t see any returns in the long run.
- Risk on the developer side
In case, the developer is a land owner or house developer, you can make up an agreement with the developer will less financial stress.
Once you already have an agreed payment plan with the buyer or seller.
Specifically, if you make a deposit between 15-25% of the agreed payment.
This way, the developer doesn’t have to worry about anything else concerning the completion of the house or finances.
It makes the whole process less free.
Also, it’s advisable to consult a lawyer to cover everything you need.
If not, you would have yourself blamed over time.
You should always make sure to get the legal process out of the way early.
This way, you don’t have to worry about anything illegal practices.
- Property expectation
At this stage, you will have to choose your property portfolio, right?
This is where off-plan property might not be a good investment in the long run.
This means that if you are going for off-plan property know sometimes that the buyer’s expectations may be at risk.
Because the finished project may not as well meet your original expectation or property needs.
And that sucks.
Benefits of off-plan investing
Off-plan properties have benefits for both the developer and the society.
Developers have the ability to create a space for property to be owned and maintained. In turn, this allows developers to be more accountable for their actions.
Off-the-plan property works are a necessary and effective solution to the problem of property shortfalls.
They are a way to maintain the space for families, maintain a space for people, and create a space for social and economic inclusion.
Other benefits associated with off-plan properties range from the benefit of being self-sufficient to the benefit of having a place to live, and to the benefit of being able to pay your bills in a safe space, and the benefit that a property is helping the community. These benefits are numerous.
Another important thing to note is that:
Off-plan property works should be used to get benefit the community, such as:
- Reducing crime
- Lowering the number of homeless
- Improving the overall quality of life for the people living there.
Other benefits of off-plan property are:
- Affordability
- Flexible payment
- Value increase with time
- High return on investment
Advantages of investing in off-plan property
Off-plan properties can have many advantages. However, one of the greatest advantages is that they serve as a self-sustaining space for families.
This means that the family can spend more time together without worrying that the space will be put to use. It is an area that is often underutilized.
Realestatelagos said something interesting,
Off-Plan property can be purchased below market value.
The developers usually offer a discount to make up for the risk of buying something that hasn’t been built yet and the inconvenience of not moving in right away or taking possession.
The buyer benefits from off-plan properties and the developer because they usually have sales confirmed early, even before completion of the project (property).
It’s a win-win situation.
Off-plan property could be an investment in a land plot or a parcel of land, which could be bought on the market. It could be invested in.
For example, a plot of land for sale could be an investment in a property that is owned by a person.
For example, a developer may own a plot of land in an urban area, and it is his or her dream to build a house there. The developer may invest in the land and yet sell it at a low price.
Find out what makes an off-plan property work for you and find out if you have an investment in a property that fits your lifestyle.
If not.
You can then consider investing in other properties that are more suitable for you.
Disadvantages of off-plan property
The off-plan property market has some disadvantages.
Firstly, most properties are not initially very profitable. Most of these properties require a significant amount of work and need to be maintained.
One of the main disadvantages of off-plan land is the lack of profit and return.
The cost of building a house will always be higher than a plot of land in the same area. And that is true.
Furthermore, the cost of building a house gives a good indication of how much income the owner will make in a year, but not how much income the investor might be able to earn in a year.
To find out if you can make money from your property on the open market, you need to know who you are selling it for, and what the buyer is willing to pay.
Off-plan properties are often a poor investment for many reasons.
It is usually a case of finding the property that you like the best and then finding the best way to make money from it.
This is because of the fact that it is not as easy as it seems to get the best price for a property.
This means, that if you put your money into a property without any plan, you will probably find it difficult to make any money from it.
You’ll also find that there are many problems and challenges when attempting to sell your investment.
…To avoid such pitfalls
You have to study the portfolio of the property you are about to invest in.
Conclusion
Now that you know how off-plan property works.
If you are wondering how to go about everything…
it’s what we can help you achieve.
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