Purchase outside the plan

Off-Plan Purchase – Advantages and Considerations

In a growing market, buying a property that has not yet been built is sometimes a great option and often the only option. It may take a leap of faith, but with the right guidance and checks, you should feel comforted that you will enjoy seeing the property being built and end up with a place that you have personally chosen.

Synopsis

Buying off-plan can basically be a plot of land with nothing else to show for it other than plans and images of the architect. It can be an apartment in a complex or a detached villa. Either way, you'll need to be convinced that the developer/builder can be trusted and that due diligence is thorough. Both in the proposed property (building permits) and in the developer (historical, financial soundness, historical). Once you are satisfied with these aspects, then the fun can begin as you choose an apartment (ground floor, first, second floor or penthouse) or start choosing the finish of the villa. Many developers are not always willing to make too many changes if they have an approved project. We recommend making changes only if you feel it's necessary.

Considerations - What should you think about? 

This question is more suitable for apartments. Check the orientation – do you want morning sun or evening sun? Is one apartment better value than others? Do the final apartments benefit from an extra window/side view? Balcony space v internal space – often some apartments have more outdoor area – is this what you want? Which floor do you prefer? It's normal for prices to rise with each level with the ground floor apartments valued better – if you're looking for an investment and rental income, ground floor apartments can often be the best. Room sizes – remember that you are only looking at plans – a double bedroom with a built-in wardrobe and bedside cabinets should be at least 12m2. Any less and can be tightened. Most off-plan projects will have a list of specifications. Check which kitchen appliances are planned for. It should be, at least, Siemens and Bosch standard. If the complex has a restaurant or extra facilities, make sure that these will also be completed at the same time.

Payment Steps

If you're happy and excited, and your lawyers have given you a green light, then it's time to pay for it. There is usually a booking fee to get the ball rolling and then internship payments.

With a townhouse, payments can be made in stages, so you've almost paid for it by the time it's completed. Agree that the work will be done in stages and that you will pay a corresponding amount. These steps can be – on the foundations on site – roof completed, waterproofing done, etc. Once done, the developer will let you know, and you can then check the progress in person. You can instruct a surveyor to help you with this if you prefer. It would be recommended to leave 20/30% at the end that would only be paid after obtaining the habitation license and would pay in the deed/completion.

With apartments it is often not so demanding with your money and this is another reason why it is potentially attractive. Less deposit and more time to save or use your money elsewhere. By investing 30/40% and nothing else, you're effectively only investing less than half the price, but in a rising market, you can get a super return on that money if prices increase before completion. We can explain this to you in more detail if you wish. Most developers will ask for 30% upfront and maybe a lower payment after 6 months. The typical construction time for apartments is 24 months.

Other Benefits

• Your new property will come with a five-year construction warranty
• Your new property will be built in accordance with current building regulations, which are often more restrictive and demanding each year.
• You can usually sell your property before it is even completed.
• You can maximize your money and invest elsewhere at the same time.

For more information on how to buy outside the plan, please feel free to contact us at OliveHomes.com. Remember, buying off-plan isn't for everyone. While it can offer big gains and optimal choice, there is also an underlying risk, so always seek good advice before proceeding.