Individuals always prefer to invest in the best possible instruments or avenues. Among the various investment options, real estate investment is definitely one of the major investment alternatives available for the investors. Individuals can earn some of the highest returns on real estate investments and hence must be considered by every investor. Real estate investment consists of some variations with off plan investments being one of the important variations in this segment.

Defining Off Plan Investments:

Off plan investments basically refer to investments in properties that are not yet complete. These include properties that are more than three months away from completion or have not even begun. Off plan investing is possible mainly in terms of residential properties. It can take place at a preliminary stage where only the site drawings have been completed. Also, investing in partially completed projects refer to off plan investments.

When investors invest in properties that promise good returns even before getting constructed, it is known as off plan investing. With real estate boom prevailing in several markets, investors prefer to invest in off plan investments. This is because the value of new properties is significantly higher than any existing properties. Hence, off plan investing has assumed major importance these days.

Advantages of off plan Investments

off plan investments have their own advantages and individuals are increasingly opting for them while purchasing properties. Some of the key advantages are as follows:

1) Off plan investors usually get a significant discount on their purchase. This value of this discount can range up to a maximum of 15% of the total market value.

2) Off plan investments ensure that the investor is purchasing the property at a price that is lower than the market value irrespective of the market conditions.

3) Another very important advantage is that the investors can wait till the construction is completed before they begin paying their mortgage payments. Hence, they have greater time period for making the necessary financial arrangements for repaying the property investment loan. Hence, they can pay the deposit while making the investment while they can wait for the completion for paying the loans.

4) Investors can take the advantage of the relatively lower prices of the properties while they are getting constructed. Their prices would increase once the properties are completed.

5) Off plan investments imply that investors are investing in the most modern properties. Investors can invest in projects that intend to use the most modern techniques of construction and also the best quality materials. The properties are also designed in the most stylish pattern. Hence, it increases the resale value of the property and is hence a profitable equation for the investor.

6) Off plan investors have a chance to earn better profits as the property prices escalate during the construction tenure

7) There are greater numbers of investment financing companies ready to finance off plan investments as compared to conventional investments.

Tips for Off Plan Investments

Off plan investments, though are profitable, are complex and require the investors to be very careful. There are certain basic principles or tips for off plan investors that are given as follows:

1) The property under construction must have a significant market value in the current period of time. Investors must not make the investment expecting the prices to rise. They must ensure that the value of the property is equal to similar properties in order to consider them as profitable off plan Investment Avenue.

2) Investors must consider the real estate market conditions before making the investments. They must see whether the markets are currently experiencing a boom, a slump or a condition of saturation and whether the current situation is likely to continue in the future. These factors are vital as they determine the market value of the property.

3) Investors must also consider the market profile and make the off plan investment accordingly. They must check whether the market is tourism, student or purely commercial and corporate-oriented. Accordingly investors can invest in resorts or holiday home projects, apartments and studios or in commercial properties.

4) Investors must also check the tax implications of the off plan investments. They must check the various types of taxes that are imposed like the property tax, the wealth tax, inheritance tax and such other taxes.

5) Of the most significant factor for consideration is the location. The value of a property depends largely on its location and investors must make the investment considering its location. They must be able to predict the value that the location would fetch and the subsequent returns on their properties.

6) It is important that the investor checks the reputation and the past work of the developer before investing in his property.

7) It is important that the investor checks the legal background of the property before making the purchase. The property must be free from all legal obligations and liabilities and the investors must ensure this.

8) If an investor is making an off plan investment abroad then investors must be even more careful. They must hire an agent who comprehends and knows all the intricacies of the property market in the foreign country. The agent must be accredited and must be officially recognized.

9) The builder or the developer must have all the required permissions and clearance certificates for building the property. The investors must ensure that their builders have all these permits.

10) Once the property is completed the investor must not give it on rent immediately. It is important that the investor waits for sometime as some minor problems are bound to crop up. He must address these problems and then give it on rent.

Off Plan Mortgage Option

Off plan investors have an option as far as loan availability is concerned Off plan investors get loans easily than the conventional investors. The developers themselves provide the investor with an option of loan. They usually have a tie-up with a bank to provide the investors with the loan option easily. This saves the investor from making several applications in different banks for getting loans. The developer takes the responsibility of finding a lender for the investor.

Off plan investment is a beneficial but a dicey investment opportunity. Hence, investors must be very careful and have a thorough analysis of the real estate market before they make the investment.