How To Avoid Problems When Buying Off-The-Plan

Market Insights
8 years ago
3 minutes

Avoid the circumstances that can come from poor purchases in the off-the-plan apartment market. It is important to note that for a smart buyer, with the right tools, off-the-plan purchases can not only be a breezy lifestyle change, but a smart investment as well.

So how do you avoid being burnt and go about choosing the right property?

 Let’s have a look at the reasons why people why people lose money as a result of buying off the plan, along with how to avoid them.

  • There is an influx of developments being built in the one area and flooding the market. The result is having little capital growth for quite some time into the future.
    • Avoid this by: making sure you know the area you’re considering investing in. Are there many developments all being constructed at once? If so, the market may be flooded soon.
  • Delays in construction of the development:  this is usually a result of a lack of funding from the developer, as well as not enough pre-sales.  Your money could be tied up in an asset for which a completion date is unknown.
    • Avoid this by: Doing your due diligence. Research the developer and their track record. Make sure that your contract protects you in the case of building delays – this is where your solicitor or conveyance will earn their keep.
  • The builder goes bust, and leaves all the investors out-of-pocket. This means you can lose your deposit, as a worst case scenario.
    • Avoid this by: Making sure you’ve covered in every scenario possible. Make sure you have a competent solicitor, who can go through a contract with a fine-tooth comb. Even if a builder does go bust, you should never really be out-of-pocket, as firstly, before exchanging contracts, it should be noted that the deposit money isn’t to be released to the builder for construction of the property, and secondly, the deposit money should be going into a trust account held by the solicitor. If these measures take place, then you won’t need to worry about losing money if the builder goes bust.
  • It is imperative that you do your pre-settlement inspection with care - we recommend that you use a professional who will inspect your property and provide a detailed pre-settlement report for you - www.presettlementreports.com

All in all, it’s bad advice and shifty practices that have caught the unwary and have made people wary of investing in developments, and they are avoidable. All you need is the right team, checking the area, the deal and the contract every step of the way, and it should all turn out just fine.

By keeping an eye on these factors, you can make sure that your off-the-plan purchase doesn’t end up a horror story, and ApartmentDevelopments.com.au will help this even more.