Tick off all the boxes for off-plan investment success
As investment strategies go, investing in off-plan property can be one of the most profitable, when it’s done well, and you know how to increase your off-plan investment profits. Here at Gladfish, we help you negotiate the minefield of buying off-plan. A progression team takes the stress out of off-plan investment, guiding you through the process from initial interest to completion.
When you are considering investing in off-plan for the first time, it can be daunting. If you’re buying at a very early stage (when you are most likely to get the biggest discount and widest choice of plot), there may not even be a show home for you to visit. It pays to be organised from the off. Over the next few weeks, I’ll be publishing articles to help you prepare for successful off-plan investment. I’m starting with this 13-point checklist, outlining all the basic steps of investing in off-plan property.
1. Do your research
Understand why off-plan property can be so profitable, and consider the risks and how to mitigate them.
2. Find the best places to buy off-plan property
No matter what type of property you buy – off-plan or existing – if you don’t buy in the best location you won’t maximise your profitability. It pays to do your location research early. Speak to a Gladfish property consultant. Ask about our Hotspots Algorithm and how it analyses 108 data points across 324 UK areas to uncover the best places to invest in property UK.
3. Work with a property company, not a sales agent
Sales agents come and go. Their job is to sell the property for the developer. A property company works with a developer, but for you, the investor. Make sure you work with a reputable company with a long and demonstrable track record of helping property investors make successful off-plan purchases.
4. Only buy from developers that protect your money
Until you complete and have keys in hand, there is no absolute guarantee that the investment will complete. You pay a deposit early on to secure a great investment, so you deserve to have some security. Always make sure that your deposit is protected by a client money protection scheme.
5. Understand developer risk
What happens if the developer goes bust before completion? How can you be protected?
6. Know your rights if the developer is late finishing the project
A late completion could hamper your plans for your investment. Be prepared by knowing what happens if the development is delayed, if you have rights to compensation, and what you should do about your mortgage.
7. What happens if your lender pulls out?
As you move towards completion, lending rules and individual lender criteria may change. Property prices may fall temporarily. There are several situations that could cause your lender to withdraw a mortgage offer – you should know what to do if this happens.
8. Get a good solicitor
It’s imperative that the contract between you and the developer protects you as well as the developer. You need to know if they allow the developer to change specs, move the completion date, increase the price, and so on. You can’t do this on your own, so you must get a good solicitor who is experienced in off-plan property.
9. What happens if your life changes?
Different life events could stop you from completing – you lose your job or fall into ill health, for example. Understand what options are open to you, and how to deal with life events as you progress towards completion.
10. Can you sell before completion?
Some developers may not allow you to sell before completion. Why would they do this, and should you buy on a development where no early resales are allowed?
11. Always check the contract a second time
Before completion, make sure that your solicitor checks through the final contract to ensure that no material changes have been made.
12. Check the development regularly
You’re making a large commitment and placing a lot of trust in the developer. It’s wise to make certain that the project is on track to complete when expected. If you can’t visit the site personally, you should have someone do so for you. Make sure that this person is experienced in off-plan property and speaking with developers – the property company with whom you’re working should do this for you.
13. Work through a snagging list to complete
Before the final exchange, snag the property and ensure that all issues are dealt with by the developer.
Work through the above checklist every time you invest in off-plan property. By doing so, you’ll help maximise your profits and minimise risks. Contact one of the team today on +44 207 923 6100, and discover why hundreds of property investors have chosen Gladfish as their partner in off-plan property investment.
Live with passion,
Brett Alegre-Wood