Thursday, January 25, 2007
Off plan property is a real estate property that has not been fully constructed. Some developers offer the options for investors to purchase a property before work has started. This in turn helps the developers as they could secure funds and sales before the construction work is stared. And it is benefited to the investors as they would usually be able to purchase the property at a lower rate with favorable payment options.
As the stock market around the global world have lost their appeal, the excess money in people's capital has been coming into worldwide real estate at a rate never previously experienced. Because of this fact it is common for real estate investors to enter into off plan property purchase: we could list out some of the advantages of investing in off plan property.
Benefits of Off Plan Property Investment
1) If you plan to invest in off plan property when the villa or flat is at the drawing board stage or starting stage of build then you actually have the potential to make great input into the internal layout and finish of your chosen property. You have an option for changing internal walls; choose desired paint colors, tiles, carpets, kitchens, bathrooms etc. The custom design for your property would be self-build without having paid an extra penny on architecture.
2) As you are investing in off plan property today you are securing the value of that property at today's price. By the time your property is well build, the price may have risen in the value that brings you significant return on your investment property. Furthermore, if you could 'just' afford to purchase the property at today's prices, remember that if you wait until more properties come on to sale you might have missed the boat and have been priced out of the real estate market.
3) The developers usually need stage payments from their investors during the construction process. This simply says that you do not need to make a large off payment, you could save to afford each payment, and you effectively save a high value asset for a very low initial capital outlay.
4) Some investors purchase property off plan, may never intend to pay for it at the same time never intend to live in it. They are clever enough to take advantage of stage payments method of funding the build and not making final payment which is usually the biggest; rather they put the real estate property back onto the market simply as the work is about to complete and take full profit from the increase in value of property. Obviously this is even a risky approach as the property rate in the market may fall down and there may not be any investor waiting to invest in it. So be careful while investing in off plan property.
5) Some developers use private investors to finance the build of holiday housing by offering them guaranteed rental yields on their completed real estate property for a fixed period of time. In this the developer has inward cash flow from the property investors to afford the build and he then has a set number of properties he could further let out via holiday and tour companies for a particular fixed period. He obviously takes surplus rental yield and thereby earns profits. The investor is guaranteed an income and owns a property, which is hopefully increasing in value over and above what it cost them to buy in the first place - therefore everybody's, happy!
As the stock market around the global world have lost their appeal, the excess money in people's capital has been coming into worldwide real estate at a rate never previously experienced. Because of this fact it is common for real estate investors to enter into off plan property purchase: we could list out some of the advantages of investing in off plan property.
Benefits of Off Plan Property Investment
1) If you plan to invest in off plan property when the villa or flat is at the drawing board stage or starting stage of build then you actually have the potential to make great input into the internal layout and finish of your chosen property. You have an option for changing internal walls; choose desired paint colors, tiles, carpets, kitchens, bathrooms etc. The custom design for your property would be self-build without having paid an extra penny on architecture.
2) As you are investing in off plan property today you are securing the value of that property at today's price. By the time your property is well build, the price may have risen in the value that brings you significant return on your investment property. Furthermore, if you could 'just' afford to purchase the property at today's prices, remember that if you wait until more properties come on to sale you might have missed the boat and have been priced out of the real estate market.
3) The developers usually need stage payments from their investors during the construction process. This simply says that you do not need to make a large off payment, you could save to afford each payment, and you effectively save a high value asset for a very low initial capital outlay.
4) Some investors purchase property off plan, may never intend to pay for it at the same time never intend to live in it. They are clever enough to take advantage of stage payments method of funding the build and not making final payment which is usually the biggest; rather they put the real estate property back onto the market simply as the work is about to complete and take full profit from the increase in value of property. Obviously this is even a risky approach as the property rate in the market may fall down and there may not be any investor waiting to invest in it. So be careful while investing in off plan property.
5) Some developers use private investors to finance the build of holiday housing by offering them guaranteed rental yields on their completed real estate property for a fixed period of time. In this the developer has inward cash flow from the property investors to afford the build and he then has a set number of properties he could further let out via holiday and tour companies for a particular fixed period. He obviously takes surplus rental yield and thereby earns profits. The investor is guaranteed an income and owns a property, which is hopefully increasing in value over and above what it cost them to buy in the first place - therefore everybody's, happy!
1 Comments:
At 9:21 AM,
Duncan Wierman said…
Great article
http://www.duncanwierman.com
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