Buying property off-plan means that you will be depending on the developer and builder to complete your home properly, within your desired construction design requirements and timeously, explains Jonathan Kohler, CEO of Landsdowne Property Group.
At the same time, there are many benefits of purchasing a house off-plan, he says.
Firstly, there is no transfer duty as you are purchasing the property directly from the developer.
Moreover, you are purchasing at the current value, he argues. You only start paying once the development is complete, therefore getting capital appreciation on the property while it is being built.
Another advantage – from a buy-to-let perspective – is that many tenants like to rent brand-new properties that have never been lived in before, which means owners may be able to charge a slightly higher rental.
However, before you dive in, Kohler also suggests a few key questions to ask.
1. How many years have you been in business?
Ensure the developer has a good track record, says Kohler.
2. How many developments have you completed?
Is the list long or short? Also compare the length of time they have been in business to the number of successfully completed projects.
3. Could I have a list of your completed developments?
Look at previous completed developments and make sure they were built well, on time, and actually look like the architectural drawings promised in the brochures, Kohler suggests.
4. In your previous developments, does transfer and occupation generally occur at the same time?
Find out if you should anticipate any long lag times, or if there is any fine print you should be aware of regarding the practicalities.
5. Are your renderings a true reflection of what the development is going to look like?
Looking at their previous work should also give you an indication of how reliable their delivery is.
6. Who is the managing agent who prepared the budget and levies for this development?
Look at the track record of who they are working with, and see if you can find reliable feedback or testimonials from past customers.
7. Do your levies include provision for maintenance, or are there generally special levies imposed for major maintenance?
Ensure you are aware of any potential hidden costs coming up ahead – you don't want any nasty shocks to your budget.