Property Investment Tips: Is buying off the plan a good idea for your portfolio?

By the resi financial blog team, 01 April 2014

Should I buy a home off the plan?

There are a wide range of property investment possibilities across Australia, each with their own benefits and downsides. While many people will take to the market in search of a constructed property in their area of choice, one option that is often overlooked could be more suitable: Buying off the plan real estate. 

What is off the plan property?

These slices of real estate are called off the plan because - as the name suggests - you'll be making your decision based on their blueprints and plans. In other words, they haven't been constructed yet. This is often a popular method for investment in apartment developments in capital cities and other metropolitan areas, which are undergoing rapid growth and can provide a great opportunity for quick profits. 

For example, if you purchase an off the plan property for $500,000 in a rapidly growing area, there is the potential for this value to grow during the construction - allowing you to sell it for a profit extremely quickly after completion. When you put your deposit down on an off the plan property, you lock in that purchase price, which means the overall amount you have to pay remains the same regardless of growth. 

The necessity of research

Naturally, because there is no physical product for you to inspect, the amount of research you put into your decision will need to be bigger. Looking into the recent statistics of the area you're considering - including things like median rental and sale prices - will help you plot the best investment plan possible. 

Furthermore, looking into regions with a lot of infrastructure development expected in the coming years could be a great way to cement yourself in the next residential hotspot, which will aid your profit growth and ensure your real estate actually grows in value over time. 

Categories: Home Loans, Property Investment