A particular area of the buy-to-let market that is gaining particular traction in the current investment landscape is off-plan. Investing in off-plan is the act of purchasing a property that hasn’t been built yet or is still under construction.
We at NPP Investments specialise in selling off-plan developments and have noticed a massive rise in popularity in this specific area. You are probably wondering “how do you know you want to buy it if you can’t see it?” Well, the developer will create visuals that reflect how the development will look and even sometimes feel, allowing investors to fall in love from the outset.
Off-plan developments are a popular choice with property investors and residential buyers alike as it allows for lower purchase prices and more control. If you are an investor who is savvy with property or has a strong understanding of this industry, off-plan developments are ideal for you.
Nowadays, it is not uncommon for an entire development to have been sold without building work having even started. This popularity can be put down to multiple reasons including the smaller staged payments which can be as little as 10%. Off-plan developments are also significantly cheaper than their completed counterparts and generally, discounts also tend to be available for property investors who are able to buy multiple properties.
Investors are attracted to off-plan developments for the substantial capital gains potentially on offer by purchasing a property like this. With new build developments, a buyer can have a great investment from the start. Not having a physical property to view is massively outweighed by the fact that securing a deal early can give you a greater chance of owning a more desirable and luxury unit.
Plus, buying the property before it has been fully built allows the opportunity for prices to rise while it’s under construction. This means by the time the build is complete, the original unit you have purchased could be worth much more than what it was initially bought for, offering a great ROI.
When property is fully constructed, investors can justify higher rents when accepting tenants because of its new-build status and the fact it will most likely have significantly appreciated in value during the build process.
Those who purchase for buy-to-let purposes will not see an immediate income from their investment as the development will need to be built and potentially furnished before it is tenanted, so it can take time for the property to generate an income. However, the returns you see in the long run are far more profitable.