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Investment Property - Making an Investment in Real Estate
Investing in property is a popular option for many people looking for steady long-term returns
There are a number of things to consider when it comes to making an investment in real estate and it is important to do careful research before you make your final decision.
If you are thinking about making an off the plan property purchase, you'll have even more unique considerations to think through.
The purchase process for off the plan property - as well as the benefits of this type of property to investors - can differ from traditional house or unit purchases, so it is important to have all the information you need to make an informed choice about your investment.
How does off the plan property investing work?
If you are thinking about making an investment in property that is off the plan, this means that you are committing to buy a home or unit before it has been constructed.
This has a number of advantages - you can secure a property at today's prices, usually with a ten per cent deposit. Furthermore, you do not have to pay any more money until the project is completed - this can often be 12 to 36 months in the future - although you should check this over with a solicitor before you sign any contracts.
Your ten per cent deposit is then held in a trust account by the developer's solicitor and will generally not be available to the vendor until the project is complete.
If you are a local Australian investor, you may be able to use a deposit bond or bank guarantee to the value of ten per cent when you exchange contracts, although this option can vary from project to project.
What are some advantages to investing in off the plan properties?
Off-the-plan properties are a particularly popular real estate investment - particularly if you are located out of state or on in another country.
Professionals flock to Sydney, Melbourne and Brisbane from across Australia and around the world - and new-build properties with reliable links to CBDs and other commercial centres are a consistently popular choice.
In fact, proximity to public transportation - including trains, trams, buses and ferries - is one of the most important factors to take into account when choosing an investment property.
Other areas that tend to prove popular with tenants include riverside and coastal areas, which can offer enviable views of the water and are also social hubs with plenty of nearby cafes, restaurants and bars.
Best of all, new and modern properties tend to appeal to city-dwelling professionals thanks to their low maintenance and green credentials.
Why invest in off the plan property?
There are several benefits of investing in off the plan property, but the most significant one for most buyers is price.
When new projects are launched into the marketplace by developers, prices for individual properties may start at lower rates to encourage buyers.
Off the plan buyers may also find that this type of property allows them to have greater choice - you are likely to have more opportunities to select your position, floor plan and other specifications, which may make your home or unit appealing to potential renters.
In some states, you may also find that purchasing new off the plan property can allow you to make a considerable saving on stamp duty - particularly if you buy before construction begins. However, stamp duty rules can change frequently and can vary considerably from state to state, so you may wish to carry out careful research to determine whether or not this can apply to you.