Reap benefits with off-plan buying

2018-05-09 06:00
Raceway property offers off-plan buying.

Raceway property offers off-plan buying.

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When it comes to investment, timing is everything. That is why buying off-plan is one of the most profitable approaches to the property market where the early bird indeed catches the worm.

Buying property off-plan literary means purchasing a house or an apartment directly from a property developer before the development is built. This method has become extremely popular in Cape Town, Johannesburg and Durban – South Africa’s top property investment hubs – and is the leading sales method in all prominent global property markets.

The biggest benefit is that no transfer duty is involved. This cost is included in the sales price of the property, so what you see is what you get – with no surprises along the way.

Another undeniable advantage of buying off-plan is that these properties normally sell at reduced prices in comparison to what they will cost once construction is completed. With construction normally taking between 18 and 24 months from launch to completion, an apartment bought off-plan can already be worth 10% more when it is ready for occupation than when it was bought off-plan some months earlier.

What attracts investors even more, is that you only need to pay a 10% deposit to get your foot in the door, with the rest of the bond repayments kicking in after transfer only.

Many short-term investors secure such properties by paying the 10% deposit up front and then selling the apartment immediately after completion, making the quickest profit with the least risk over the shortest period.

How does it work?

Once a buyer has identified a unit on the architectural plans and site development plan provided by the developer, a small reservation deposit is paid into an attorney’s trust account.

This reservation deposit is simply to put a reserve sign on your apartment of choice and is fully refundable – it will, in other words, be deducted from the overall deposit that you will pay on the apartment and shows a level of commitment from your side. Once a unit has been reserved, the buyer has one week to complete the relevant documentation.

When the documentation has been completed and submitted, the balance of the 10% overall deposit on the property is required. The buyer has four weeks to make this deposit.

The next step is to secure the finance options by either presenting the remainder of the 90% in bank issued guarantees, or by securing the remainder of the 90% as a bond. The buyer now has another four weeks to get these documents in place.

Now construction starts, and the communication avenues are kept open between the developer and the purchasers to ensure complete transparency regarding the final construction date.

Is it safe?

Off-plan purchases from trusted development brands are safe for these reasons:

  • All deposit payments are held in a reliable attorney’s trust account, and not by the developers themselves. This means that your money is protected by the law and that it will even earn interest during the construction period.
  • Your sales agreement will describe your unit in detail, specifying exactly what the structure will look like and which fittings and finishes it will sport.
  • Warranty periods are given after the transfer of the property to ensure that all possible defects are dealt with.

When the development reaches completion, the assigned conveyancer processes the transfers and the purchasers receive their title deeds, all relevant details and documentation regarding their new sectional title units.

For those who financed their purchases through mortgage bonds, this is when the repayment starts. You are now the proud owner of a brand-new property.

If you would like to know more and have a look at the latest off-plan developments for sale at Raceway Park in Bloemfontein, dial 051-405-9990, or 079-824-0064. Send an email to sales@racewaypark.co.za or visit the website at www.racewaypark.co.za., or like

Like our Facebook page: @racewayparkbloemfontein

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