The benefit to the investor is that prices typically increase as the development property progresses, on larger sites there is a marked increase between each
phase of the development.

I.B.A. member property agents have an extensive range to choose from.

Why is Off Plan Property so popular with Developers?

Developers need to secure their own financial position, a good start to the sales and marketing effort is essential. In all forms of retail, discounting has long been the most effective method of moving stock quickly; houses are no different. A property investor will readily see the opportunity for a discount and buy their property before it is built.

How does buying Off Plan work?

To secure the property off plan a deposit will be required, which means that whilst the Investor reaps the benefit of the capital growth during the build phase (usually between 6-12 months in the UK but can be a long as 2-3 years Overseas), they will have only outlaid the deposit rather than the full purchase price.

As this is a business decision, and therefore made with the head and not the heart, it stands to reason that the information needed to make the investment decision is fundamentally different to that needed to buy your home.
The developer's status, history and financial security are all important, as are the plans, floor layouts and building specifications. This will rarely include the glossy marketing material, but this is a small price to pay for the potential savings that can be achieved by buying at this stage.

Flipping

When the property is built the investor still retains the option to complete the purchase, and benefit from a rental income or sell and realise the capital growth that has been achieved during the build. Selling before the completion of the property is called Flipping. Whilst flipping is popular with some Investors, it is not our recommended route as we see property investment as a medium to long term strategy where capital growth is the major feature.

Summary

Investing off plan can be an excellent way for a new investor to approach the property investment marketplace. As always, there is research to be done to ensure that the property being bought will provide a good return on the money invested. Overseas property investment, due to longer build cycles and better growth potential, usually provides a better return on investment.

This is where using an established I.B.A. member property agent comes into its own, as the new investor can move forward with confidence and start to build the portfolio of property that can secure their financial future.

"Always make sure the property agent you select is an I.B.A. member"

International Business Association
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