Why Existing Investors Are Switching To Off plan Property

​

The two main goals when investing in property are typically between to reasons, high rental returns and capital growth. Off plan properties offer both of these reasons which is why investors are rapidly buying off plans as apposed to regular rental houses.

​

Buying off plan property does require a different route to purchase, however it is not completely different to buying a house or rental property. 

​

Off Plan Property Explained

​

Off plan property is a development that will house many apartments or be built as a home. The standard time to purchase an off plan is during the construction phase, where investors are wanting to sell rapidly (in all cases it is the best time to get deals on available units too) hence why investors tend to buy in bulk during the construction phase.

​

Purchasing an off plan requires two payments, a desposit with a reservation fee, which is usually 30% of the total price of the unit, and the remaining 70% when the development is complete. As off plans are usually bought at a discounted rate this keeps cost lower for investors which in hind sight makes the property more attractive to investors.

​

Strong Capital Growth

One of the main incentives for off plan developments is capital growth. Capital growth increases as the property is being built, renovated and its value over the next 5-10 years. As developments in city centres are the norm and becoming increasingly popular, the capital value of the property continues to rise meaning its value increases 2-3 times the amount, scoring investors a high return on investment. In some cases, properties are valued even higher once complete. In certain scenarios this allows for an even quicker and substantial return on investment for investors.

​

The off-plan market status

​

As off plan properties do well in many cases, this leaves room for landlords to maximise their capital growth/ rental yields. As property laws get stricter and more restricting for landlords, they look to maximise their investments hence why they switch to off plan property.

Is off plan a good investment?

As off plan property becomes increasingly popular in up-and-coming cities outside of London, now is the best time to buy off plan properties. Manchester and the North of England is the next best area to invest in off plan properties as the North reigion is set to grow by 10% in the next decade. With the need for housing rising, off plan properties are the way to go, not only for landlords but for investors and home buyers.

​