If you’re considering buying a property there are many factors to consider, from location, to building type, to price range.
A key decider for many people’s purchasing decision is actually inspecting the property. How much natural light is there? Is there any road noise? How thick is the carpet?
For this reason, many homebuyers and property investors steer clear of buying off-the-plan. While it’s true that you may not be able to see what you’re getting until after you’ve paid, there are many pluses to off-the-plan.
One Whitsundays resort and spa CEO John Zappia has been in the property game for decades,\ and has found the benefits of buying off-the-plan to be immense. “It’s more affordable for one and usually off-the-plan provides a high rental return with very low maintenance. Like all investments, do your research – however you may just find off-the-plan is more appealing than you initially thought.”
Here are a few more reasons for off-the-plan:
1. It’s often more affordable
To sell a little faster, developers of off-the-plan often start with a cheaper rate, straight off the bat. Once the developers construction finance requirements have been met, apartments have a tendency to increase in price. Buying in the early stages of development can mean a lower price tag.
2. There’s a bright side to depreciation
You could be eligible for thousands of dollars in tax deductions if you are buying your off-the-plan as an investment. Once your property has been purchased, obtain a depreciation schedule from a quantity surveyor. Come tax time, you can claim deductions.
3. You can get your foot in the door
If you’ve attended house auctions or inspected apartments for sale, sometimes it can feel like you’re trying to attain the impossible. With property prices showing no sign of increasing, off-the-plan can be an affordable option for first time buyers.
4. You’ve got more time
Traditionally you will pay a 10 per cent deposit upon the signing of an off-the-plan property, and pay the remaining amount upon the completion of the project. The bonus lies in locking down property at today’s value, meaning by the time it has been constructed, it is often worth even more.
5. Lower ongoing costs and maintenance
A new building that has been well built will have less maintenance costs than an older building. An added bonus is electricity costs, which will be lower given the Australian Building code has enforced strict energy efficiency requirements for all new homes.
6. Stamp duty
Potentially the biggest advantage for buying off-the-plan is stamp duty savings. Particularly in Victoria, the government has reduced stamp duty in an effort to increase property development. The earlier the construction, the lower the stamp.