6 BENEFITS OF BUYING AN OFF-PLAN PROPERTY

Written by: Sheriff Alaraba (https://about.me/sheriffalaraba)

Off-plan property is a property that is yet to be built or a property that is still undergoing construction. Many are always sceptical about keying into such investment but only good investors with great foresight understands the benefits of buying off-plan properties. Once you have done your due diligence on the track record of the Real Estate developers that you are buying from and you can verify the quality of their work as well as their ability to deliver as at when due, then you can be assured of getting the best investment deal.

Here are SIX benefits of buying an off-plan property;

1. The purchase price is always lower than the market value

  When developers come up with off-plan projects, they introduce such offers to the market at a cheaper price compared to the market worth of such property in that location. This is because what they have on ground is the design plan which they are yet to bring to reality, the bare land where they want to construct the houses, they need funds to start the execution of such project, while in some cases they need people to key into their offers on time so as be more convincing when they need to collect loan at the bank to carry out the construction.

Any individual that buy any of their offers perhaps a three or four-bedroom duplex at this period will be saving millions of Naira. Surprisingly, I have seen many estates that get sold out while construction is yet to finish. Can it be that those that keyed into such offers don’t know what they are doing? Definitely Not!

2. Exponential Capital growth

There is a huge value appreciation for those that invest in off-plan properties. In the real estate industry, there are different stages in construction which comes with varying prices. The change in the purchase price of such property is constant. The price of a property when it was still off-plan is different from the price of that same property when construction has commenced. The price of that same property when it was still undergoing construction is quite different from the price at which that property will be sold at the completion stage. Let me give you a real-life scenario for better understanding. There is an ongoing project, a four-bedroom duplex (three floors) in Amazing Grace Court, Katampe Abuja. When this project was introduced to the market, it was selling for Sixty-five million Naira for the semi-detached duplex and Seventy-five million Naira for the fully detached duplex before construction started. Now that construction has started, the purchase value rose to Seventy-five million Naira and Eighty-five million Naira for the Semi-detached and fully detached duplex respectively. That is Ten million Naira increase in capital for those that bought into the Estate before the increment. This is a return on investment (ROI) you will never get when you put such capital in the bank with the same time interval or even more.

You can now imagine what the selling price will be after the completion of the project. Investors that keyed into such offers on time will have themselves smiling at the end of the completion stage.

3. It gives room for flexible payment plans

Flexible payment plans make the purchase of a property affordable. Most off-plan properties gives room for six to twenty-four-month payment plans with and without interest depending on the agreement and company that you are buying from. It makes it possible for you to key into such offer with a down payment while it was still selling at the off-plan price. Flexible payment plans make it easy for you to plan ahead and enables you to own a home with ease. 

4. Ability to resell at a profit before completion

Off-plan properties make it possible for you to resell at a huge profit before completion because you will be selling such property at the current market value compared to when you purchased the property. This is a common practice among avid real estate investors. They prefer to tie down their money in such real estate offers with the plan of selling it later before or after completion. You can imagine buying an off-plan property, a four-bedroom duplex for example that is selling for Sixty-five million Naira with a flexible payment plan of eighteen-month and then sell it before completion when the price would have appreciated to eighty million Naira even before completing your own Sixty-five million Naira payment in some cases. We are talking about fifteen million Naira profit on that investment.

Tell me a better investment that guarantees you such return within that time frame.

5. Zero maintenance fees

Buying off-plan property saves the cost of maintenance or renovation compared to when you buy an old or ready built house because you will be given your property immediately after completion. You know the expenses that come with renovation or maintenance of a ready built house most especially when there is a need to tailor it to your taste. The need to re-paint, the interior decoration, kitchen fittings, the toilet and so on will need changes.

6. The materials used to build an off-plan property will still be fresh, intact, durable and of high quality which guarantee the longevity of your investment

The current economy might make you think twice from engaging in such real estate investment. Many see the current situation as a setback, only a few see investment opportunities in Real Estate. It is now left for you to decide whether or not you are going to be part of the few that will benefit from such investment opportunities in Real Estate.

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