Should you buy Off-the-Plan?

"Should you buy off-the-plan?" is a question that I often get asked and people usually tell me why they won’t do it while they’re asking me. They’ve spoken to their accountants or their financial planners and they’ve gotten advice to not do it.

But they couldn’t really give me an answer. And the reason is that they’ve allowed somebody else’s emotional bias to affect their decision-making. They only know that they shouldn’t buy off-the-plan because somebody else told them not to.

But you shouldn’t let that happen to you. Because if you’re following somebody else’s emotional bias, you’re not looking at how the deal works for you.

A lot of people screw up when they buy an off-the-plan property. But you need to understand why those mistakes occur. It’s got nothing to do with the type of property they buy or the overall strategy of buying off-the-plan. It all comes down to how they bought this type of property.

Did they do their research in terms of location and demand for the specific type of property they bought? Did they understand the market cycle for the area? Did they do any bloody due diligence at all before making their purchase?

What happens is that people fall in love with these brand new properties. They get emotional and allow those emotions to dictate their buying decisions. This leads to them paying a little more or ignoring some important issues. And that’s how people screw up when buying off-the-plan.

So, we come back to my question. My answer is that if it all stacks up as part of your overall plan, an off-the-plan purchase may have a place in your portfolio. As long as you do the legwork!

Take emotion out of the equation and make sure that the property fits your strategy. Do your due diligence and don’t let somebody else’s emotional bias make your decisions for you.

Just because somebody else screwed up with off-the-plan, that doesn’t mean you’re going to. You just need to put your strategy in place.

— Todd Polke