Off-plan properties are properties that are still in the building/planning stage. So the building is not complete or fully ready for occupancy, on the other hand, On Plan properties are properties that are fully completed and practically ready for occupancy.
So what are the pros of Off-plan and that of on-plan properties? Why would anyone want to buy a property that is still in the planning phase or is not yet built? Read further and see the video below where Josephine Stevens- the Head Consultant at Gumbull Realty discusses it.
The Pros & Cons of Off-Plan Properties
COMPETITIVE PRICING.I know a few investors that will never buy an on-plan property because of this reason- it has to be Off-Plan. Buying an off-plan property is getting early access. Developers who sell off-plan properties usually sell them below market value especially when you buy at the earlier stage. .Consequently you will enjoy substantial capital gains. Interestingly , As the project progresses the price increases.. Back to our example- when Property A entered the market, the price started at by the time the property was sold out it was. So all things being equal, the earlier is usually better.
On the other hand- if you buy an on-plan property you will most likely be paying full market value. So you don’t have the immediate capital gains that an off-plan property gives you- except you want to get creative with the property. So when I mean creative, I mean adding value not cutting corners. For example, you buy a two bedroom and the structure and size of the building allows you to carve out another room. It becomes a 3 bedroom duplex that commands more money . At the time Property B sold, it sold at full market value that properties in that location with those features sell for
FLEXIBLE PAYMENT PLANS. Sometimes we have clients reach out to us and want properties that have flexible payment plans. With Off-plan properties, you can actually stage your payments. So you can’t afford to put down a lump sum. You can actually pay instalmentally. Of course There is usually an entry payment- and initial deposit which different developers decide on. Sometimes it may be 10 million or be percentages depending on the property in question. For Off-Plan Properties on the other hand , you hardly find flexible payment plans By the time the developer is done building his property, he wants his full funds- and understandably so . If you are by any chance get a payment plan- it’s usually short and not as flexible as the one an Off-plan property. Then you would have to start considering getting a mortgage or using some type of debt instrument.
A third Reason you may want to go OFF-PLAN is you have the opportunity to contribute your own personal input to the property’s details if you so desire. Now not major structural preference(especially if it is part of an estate- there is usually that external standard that cannot be deviated from). But general internal aesthetic details like your kitchen finishing, interior decoration, bathroom details etc. Which is great especially if it is your primary residence you can finish to taste. An On-Plan property on the other hand is already built. So if you would have preferred your kitchen cabinets to be grey and now they are red, there is nothing you can do except pay from pocket to change everything yourself.