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Pros & Cons of Buying Property Off The Plan

buying off plan

Off-plan purchasing is a trend that has seen many aspiring property owners acquire their dream properties by putting their money on nothing more than an architectural plan. It can be something daunting especially if you have never done it before. It is a route to homeownership that some consider risky, but one which has proved very rewarding for others, especially if the project is located in a high growth area. It is one of the easiest ways of getting onto the property ladder because you only need to deposit a small percentage of the purchase price then pay the balance later. Before committing yourself to buying a property off plan, here are the useful tips you need to consider;

  1. Carefully research and check on all the parties involved; developer, management company, contractors etc. It is better to have a developer with good track record of successfully completed projects that have been sold off plan.

  2. An investigation of similar neighborhood properties would also be beneficial. You should carefully examine and gather information about comparable nearby properties, their prices or rental amounts etc. and whether there’s a possibility of rent increase in the future. This will aid in projecting the amount of return you expect to get if you sell or rent out the property in future. Estate agents will help you a lot in this since they have all this information at their fingertips. Never rely on the developer for this information.

  3. It pays off to buy properties in prime locations. Location is a great factor in understanding the potential of a property. A site near appealing facilities like transport links, schools, hospitals and shops is more promising. It pays off to buy the cheapest property in a good location than an expensive property in the worst location. Additionally, visiting the site constantly with your agent helps a lot.

  4. Carefully study the contract and ensure you watch out for any restrictions on sales the developer might have imposed in case you have plans to flip the house. If possible, ask for advice from professionals e.g real estate agents or your lawyer.

  5. Understanding your target market whenever to buy property is a must especially if you are planning to let or sell it after completion. Discuss with local estate agents to understand where the demand is likely to come from. Details, dimensions and specifications should be suitable for the target market.

  6. Finally, know your financial position, your borrowing capacity and the lending policies of the bank or your financial provider. It is advisable if you have a good payment plan to avoid putting all your money in the investment.

WRITTEN BY
Maureen Mbithe
Content Writer at BuyRentKenya
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