Off-plan Print E-mail

These properties will be in the planning stage and may not yet even have all the relevant building permissions or financing in place.  It may be you find a development that has had a Phase I or even a Phase II built and you chose to invest in Phase III or even a Phase IV.  In this instance, you are technically investing in a contract with a developer, who is undertaking to build you a specific property in a specific place.

There will be nothing to see when you invest off plan – the land will be marked out and you could get a feel for the area and views,  but generally you will have only a computer image or architect's drawings to see the planned end result.  The developer may have a diorama or model mocked up, so you can imagine the projected end result.  Many investors chose to buy these properties over the telephone, on an unseen basis.

Some investors have no intention of completing on these properties and they sell on their contract (sometimes known as "flipping")long before the developer is ready to take his final monies.  If that is what you want to do, you must make sure your contract has a clause expressly stating that can be done. 

Key factors to bear in mind here are:

  • You are buying a contract, not a completed property

  • You must make sure there is a sell-on clause in the contract

  • Is the potential property unencumbered?

  • How reliable and stable is the builder?

  • Does the potential property come with a builder's mortgage available?

  • Selling on is likely to involve a transfer tax

  • Location is critical