Buying off the Plan
Okay, off the plan apartments good bad or ugly? Let's talk about it today and the factors to consider, before you pull the trigger on such a purchase.
You're committing to and signing off on a purchase for that apartment long before you've got finance approval. Because it's not built yet, you can't get a valuation on it, you can't get finance approval. So, understand that you are committing to it legally, before you've got that approval.
Usually takes anywhere between 18 to 24 months to Build such an apartment block, but that could also blow out, so factor in a little bit of blowout time and there may be implications of that in your personal life. Change of circumstances in your life is also a big one. So, what can happen in the next two to three years might be unforeseen, but might derail your ambition to purchase that apartment, right, so factor that in that you've got this legally bonding document that you've committed to, you haven't got finance, something could change along the way, I could lose my job, I need to put my funds elsewhere, etc., etc. So, make sure you be aware of that. That's really critical.
In that two- or three-year time frame, the values could go up, down, sideways, so we need to understand that when we're going to finance in two- or three-years' time, that we've got finance approval based on the variables. The property may have gone down in value depending on the market. Hopefully it's gone up in that time and that's the exciting part, right, but we need to factor in the variables or the worst case scenarios Builders or developers can and most of the time put in a five percent variance of build size, right, so you they could change your layout or design over that period when they're building it, right, so just again factor that in to know that your apartment might be might be slightly smaller or bigger through that time when it's actually complete. Airspace is a big one and supply and Demand is what really governs this, so understand the supply and demand in the area before you pull the trigger. So, airspace is I've got 80 or 100 apartments in this complex that I'm purchasing in, but next door we could be putting up 100 or 150. What sort of impact does that have on the supply in the area that I'm going to be living, or my investments going to be situated in for the next 10, 15 years. So, you need to do your homework on that well before you pull the trigger on that.
Don't get me wrong, apartments have a a part to play in someone's investment portfolio some people love to live in them because they're front and center to all the amenities, right, they're new, they're exciting, they're pretty well decked out, the location's fantastic for the price that you can get, as opposed to buying land, okay, but we need to put in the variables of what can go wrong or what to consider, long before we purchase. Not just looking at the glossy brochure and then signing on the dotted line.
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