Buying off-the-plan can be a good way to get into a high-growth market with a minimum cash outlay. Sam Saggers of Positive Real Estate reveals his time-tested strategies to make the most profit from buying off-the-plan and reduce your risks.
- Understand the market cycle for future growth. Do this by considering the six market drivers (population, economics, demographics, infrastructure, yield variation and supply and demand).
- Choose low-density, boutique properties.
- Always buy in stage one of a development because it will be at the best price. Never consider any other stage. Developers withhold further stage releases in order to make additional profits and sell the properties at a high rate of return.
- Buy a property at least 18 months off the plan, which will allow the property price to increase and, with just a deposit down, you should secure 100% cash on cash return.
- Always have the “plan” valued at the commencement of the contract process. You need to buy at the plan’s value at the beginning and not the value at the end. Valuers call this method “valuation summation” which involves the cost of land and the building.
- Don’t get in over your head. Buy properties under $600,000 as they appeal to the entire market should you be required to sell.
- Always plan to settle. Never buy to sell midway through the project’s construction. You should always confirm your borrowing capacity first before entering into an off-the-plan contract.
With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now
Top Suburbs :
Get help with your investment property
Do you need help finding the right loan for your investment?
When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.
Just fill in a few details below and we'll then arrange for a local Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus and appointment is free.
We value your privacy and treat all your information seriously - you can check out