How to be cautious buying apartments off-the-plan

How to be cautious buying apartments off-the-plan

In Australia’s current apartment market, concern over build quality has led investors to be cautious when buying off-the-plan. These new developments will hopefully shift the perception around buying a new apartment and provide a reference for future builds to replicate.

I was nervous when I signed a contract to purchase two apartments in Melbourne and a town house in Gold coast. Even my lawyers cautioned me that I may lose my money as I was buying properties that were not there. It meant that the developer may take time or may not have enough money to complete the project.

But before committing to the signing of the contract, I followed the following tips that I learned from the experts:

I Researched the developer, architect and builder’s track records extensively

Rule 101 of buying a new apartment is undertaking thorough due diligence.

I utilised Google to find any news coverage, selecting «news» tab in Google

I endeavoured to speak with some residents who lived in one of the developer’s buildings, and ask them if they’re happy with their home, if there have been any issues since they’ve lived there and whether their apartment was delivered on time. My advice to any potential purchasers of brand new or off-the-plan properties would be to undertake a thorough background check on both the developer and the builder.

Get finance pre-approval before you begin your property search

As for me, I was fortunate enought because I hade liquid cash in my bank account suffient enought to make the deposits. But if you do not have enought money, it is important to get finance pre approved before embarking on this plan.

When buying an off the plan apartment early, you’ll be able to lock one in at current market value for as little as 10%. The advantage is that construction could well take a year or two, but in that time, the market value of your property is likely to increase.

Talk to other people who have bought off the plan

My broker reassured me that he had known and worked with the developer over a long period of time and was offering a great new incentive that was enticing for me not to pass it out.

Explore the area by foot

While the apartment renders may look perfect online, the physical location of the development is arguably more important. I had to find time to explore the area for a day. I flew from Perth to Melbourne just to prove the point.

Prepare yourself for any unforeseen problems

I engaged the lawyers in case something unforeseen circumstances happened, I would be safe with my money.

However, communication with the sales agent helped me to stay up to date with the construction process – as well as following the project on their website.

I am happy that the construction was on time and after two years, I was able to finalise the purchase and ushered in faithful tenants.

We have developed good relationship with the developer and trust him, any time he can notify me of any new upcoming development.

I would recommend this developer to any investor who want to buy off the plan in Melbourne or any other city of choice.

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