Off Plan Property Buying Made Easy
You dont have to be a rocket scientist to buy off plan property
, and with a bit of forethought you can guarantee yourself a healthy profit in the future. If you rush in and get it wrong though you could lumber yourself with a useless property that will neither sell nor rent for profit after completion. The answer then is to take your time choosing an off plan property development to invest in.
But how exactly does the process work for purchasing off plan property?
Well before you can do anything else you need to find a property development and an individual unit to invest in. This is easier said than done in some areas, and even some larger areas have limited places on developments for private investors. Look around on the internet for local developments opening to investors soon, and if you cant find any you might want to consider registering with specialist off plan property venture websites to keep you in the loop.
Next, once you have found your chosen off plan property venture youll need to get in quick with your reservation fee and your deposit. Before doing this though you need to ensure you have approval for a mortgage in principal. Jumping straight in and reserving a unit without having the necessary finance could leave you with major problems then the time comes to pay for the completed property. Plus, make sure you specify a buy to let mortgage if you intend to rent your off plan property to tenants.
Once you have your mortgage promise you can check out the available units and choose the one that suits your needs. Dont base your decision solely on the layout and added extras you get, also think about window views, the distance from the car parking facilities and noise pollution. When youve found the perfect unit for you reserve it and hand over your reservation fee. This is normally set at 1000 but some developers will ask more.
Even though your off plan property is still in the planning stage you need to exchange contracts as you would with any other property purchase. At the same time youll also be expected to pay your deposit. The amount asked as a deposit varies from development to development but it generally equates to around 10% of the purchase price minus whatever you paid as a reservation fee. If you cant pay your deposit when required you will forfeit your off plan property and your reservation fee.
Now you simply wait while the development is built. At the start of construction your developer should provide you with two completion dates. The first date will be the earliest on which the entire development will be completed, and is known as the short stop date. The second will be the absolute latest date on which the development will be complete and is known as the long stop date. Understandably you will never be given a specific date on which you will get your property.
Just prior to completion, you will be invited to view your off plan property and check that it is constructed to the standard you expect. Many first-time investors choose to pay a professional company to complete the checks for them as it is an important part of the process. Then, providing youre satisfied with the property, your promised funds are transferred to the developer and you become the proud owner of an off plan property. All that is left to do then is successfully rent it out.
by: Sandy Wright
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