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What Is Off-Plan Property?

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    Discover Off-Plan Property Investment

    Off-plan property offers one of the best investment opportunities out there. But what is buying off-plan property?

    If you’re unsure exactly what off-plan property is, what off-plan means, and how off-plan properties compare to traditional residential homes, this is the guide for you.

    Designed for those questioning ‘what is off-plan property?’, in this quick and easy guide, we’ll explain off-plan in detail and help you understand more about this popular investment method.

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      What Does It Mean When a Property Is Off-Plan? 

      When a property is off-plan, it means that it’s not yet complete. The property may still be under construction, or the development is still in the planning stages.

      What Is Off-Plan Property Investment?

      Off-plan property investment is when a property investor buys a property before it’s been completed. The investor will be given a completion date that the development is expected to be finished by and will typically pay a reservation fee to secure the unit of their choice.

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      Off-Plan Property Vs. Traditional Residential Property - What's the Difference? 

      There are some main differences between buying off-plan property and buying a traditional completed property.

      The most obvious difference is that completed properties are already ready to be viewed in person and lived in before purchasing, while off-plan properties are not.

      Another difference when it comes to purchasing a completed property vs an off-plan one is that each property is paid for differently.

      With the typical purchase of a completed property, buyers or investors will generally put a deposit down and pay for the remaining amount in mortgage repayments or a one-off cash payment covering the total property price.

      With off-plan properties, it will often be possible to split your payment into separate instalments, with a reservation deposit at the beginning and the final cost paid when the finished property is ready.

      Another big difference between new build properties that are off-plan and older completed homes is that off-plan properties are a lot more eco-friendly.

      This is down to the materials the development is often made from. The fact that new-build homes offer better insulation reduces the need to use artificial heating, saving energy.

      The type of buyer that completes an off-plan property purchase usually also differs. First-time buyers will rarely buy an off-plan home unless they’re purchasing property under a shared ownership scheme.

      Typically off-plan properties usually are more popular with buy-to-let investors in the UK.

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        Who Develops Off Plan Properties? 

        Off-plan homes are created by property developers. Off-plan property developers identify demand for property in a particular area and then build a new development to cater to this demand.

        The best developers to buy property off the plan from are experienced and established in their field.

        Investors should avoid buying an off-plan property from any off-plan property developers who don’t have a strong track record of completed projects behind them.

        One of the main risks behind off-plan as an investment is that you’re putting your money into something that isn’t yet complete.

        That’s why due diligence is so crucial, as you want to avoid investing in a property that may never be successfully completed.

        How To Spot a Good Off-Plan Property Developer

        If you want to make off-plan purchases, you should conduct extensive research and due diligence into different off-plan property developers in the UK.

        Here are some top tips on things you should look for when researching good off-plan property developers for peace of mind that your investment is in the right hands.

        • A track record portfolio of completed projects that were finished to a high standard.
        • A lot of experience in the off-plan development field.
        • A good reputation for customer care, evidenced by solid client reviews.
        • Press coverage on housing market news sites about current or past property developments.

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        Where Can You Buy an Off-Plan Property? 

        So where can you find off-plan properties to buy? ​If you’re looking to purchase off-plan property, you’ll usually need to browse websites of property investment companies.

        Property investment companies like us at RWinvest partner up with off-plan property developers and sell units in their latest developments on their behalf.

        Buy-to-let home buyers will invest in one or multiple units in each off-plan property, benefiting from below-market purchase prices, enhanced capital gains potential, and high rental yields in the right area.

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          The real estate market in the UK has seen rising market demand for property over the last year, off-plan properties included. House prices have hit record levels, and capital growth predictions are as strong as ever.

          As an investment, off-plan homes can be ideal as they’re offered at below-market rates and are brand new when completed, ridding any need for costly refurbishments.

          During a time when 32% of properties are selling over their asking price, according to the latest research from PropertyMark, the ability to buy a property for less than its listed purchase price is enticing for a lot of buy-to-let investors.

          Multiple new-build developments are cropping up around top UK cities, so it’s clear that the demand for off-plan investment properties is not slowing down anytime soon.

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          Explore Our Off-Plan Properties

          Ready to get started with your off-plan purchase?

          Enquire today about our range of lucrative off-plan investment opportunities, with rental yields of up to 8% and amazing below-market prices!

          If you’re still wondering, ‘what is an off-plan property investment and is it right for me?’, get in touch with us directly, and a member of our team will be happy to offer guidance.

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          Author

          Reece Pape

          Reece Pape is a property writer at RWinvest. Utilising up-to-date property statistics and data, Reece aims to keep investors informed on the latest market developments.

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