Common Misconceptions About How to Make Money Buying Off The Plan

Sydney is not alone in rapid sales of off-the-plan apartment projects, with new unit approvals hitting record levels. The number of new apartments is also rising in Brisbane and Canberra while Melbourne’s supply levels continue to grow almost four years after the city’s property market peaked.

Buying an apartment that’s yet to be built is a bit like buying a pair of shoes without trying them on. Even so, owner-occupiers and investors are falling over themselves to pay anywhere from half a million dollars – often much more – for apartments yet to be built.

The trend – driven by record-low interest rates, offshore investment and affordability issues – is shifting ­cityscapes and how people live and invest their money.

Property commentators and investment specialists are warning punters to pay ­attention to supply levels, location and capital gains potential as more towers crop up.

Oversupply concerns and a potential interest rate rise may put people off. But for now, developers and agents are cashing in, and buyers are hunting for the next unit boom suburb.

Last year’s rise in house prices filtered through the apartment market – and there is more growth to come.

Anybody buying a property over the next 12 months needs to be aware of the growth patterns. Now more than ever, it is important to do substantial research to back up your decisions with data and insight.

The best returns are expected to be in the inner suburbs – around 4 per cent to 8 per cent in the next five years. But each city’s market is at a different cycle stage and, therefore, offers ­varying growth potential.

Apartment numbers keep growing around Melbourne’s CBD, sparking ­oversupply concerns as rental yields soften and the vacancy rate increases. But the inner-ring suburbs, which are five to ­10 kilometres from the city centre, still offer among the best returns in the country, ­Residex’s Edwards says. Of particular note are Elwood, St Kilda and Richmond.

My feeling is that there is an oversupply of property, especially units.

Demand is currently being propped up by three main factors: property developers are managing their units well; international buyers are supporting new unit sales; and higher public confidence is being driven by factors like good clearance rates at auction.

Property pundits tip Brisbane as the next city to experience a rise in values and ­investment. 

Interest rate increases need to be accounted for ahead of purchase and settlement.

The overall negative impact of buying off the plan is that the valuation of the property is unknown until it is complete.

This makes lending difficult.

For example, a $500,000 apartment with a 10 per cent deposit from the buyer would require a 90 percent mortgage of $450,000.

Building apartment projects can take about 18 months to three years. If the market dips in that time and the final valuation comes in at $450,000, the bank’s 90 percent mortgage would be $405,000. The $95,000 shortfall between the mortgage and the original ­purchase price would fall on the buyer.

Another problem is customers aren’t always sure what value the bank is lending on – the contract price or valuation, whichever is lower.

Be ready for additional costs, if the valuation falls, then mortgage insurance may become a cost to the loan, which could negate stamp duty savings.

Buying so far in advance means buying a property in two years’ time at today’s prices, which is both a pro and a con.

Some off-the-plan buyers celebrate a rise in value between purchase and ­settlement, but with so much supply coming to market, and the potential for volatility in the broader economy, counting on capital gains is ­dangerous.

The Gold Coast market is still suffering after the apartment glut and market ­downturn after the global financial crisis.

Off-the-plan apartment buyers who signed contracts before the market slumped found themselves lumped with units worth less than the purchase price.

The result was a string of mortgagee sales that hit the market towards late 2010 through to 2012, which are still being absorbed.

Buying in over-supplied pockets becomes a problem if rental demand is overtaken by supply. Returns fall or, worse, the ­property sits vacant. An oversupply also makes it tougher for owners to on-sell their apartment.

The buoyant established housing market has made detached housing unaffordable for first-home buyers and upgraders ­wanting to live near the centre of their city.

At the same time, state government stamp duty discounts on new dwellings have made off-the-plan apartments more attractive, so there are more off-the-plan buyers than ever before.

Additionally, if the development is ­coming to its conclusion, the developer may reduce the prices of some of the apartments to sell, which again reduces the value of your apartment.

This is why securing the right mortgage terms, and the right location are crucial. Finding emerging areas where demand is likely to increase ahead of supply is the key.

Many suburbs that were once considered rundown and undesirable have since transformed into property investment hot spot. Clues are cafes and retailers opening in the area, as well as an influx of young residents with reliable incomes.”


CHECKLIST

For first-time buyers or investors considering off-the-plan, the process can be daunting. Albert Waldron Director of Awesome Lending Solutions. Offers some pointers.

• Get out of the mindset that you need to invest in the area you live in. That could limit opportunities to buy in areas experiencing capital growth and rental demand. Remember growth can happen in regional areas as well as urban. Successful investing needs a business mindset.

• Target areas where new infrastructure is to be built. Suburbs close to where new roads, freeways and public transport are to be constructed will be more attractive to tenants and are a sign of where the population is expected to grow.

• Identify commercial and social investment areas. Find areas where new shopping centres, hospitals and schools are to be built in the future. This also applies to gentrifying areas where new cafes and shops are opening.

• Invest in areas with more demand for housing than supply. Look for areas just starting to experience an increase in house prices and with low vacancy rates. A low vacancy rate means you will be more likely to tenant an investment property quickly.

• Invest in surrounding suburbs. If you miss out on a property in a booming area, consider the suburb next door. In many cases, the surrounding suburbs are likely to become hot spots themselves with time. You can piggyback the success of the existing hot spot while probably paying less for your investment.

• Speak to investment experts and like-minded investors.

Pros and Cons
It’s the million-dollar question for any prospective home buyer – do you put your money into a brand new home or is it better buying an established property?

Buyers’ agents often steer prospective home owners towards older properties because they have a track record. But many consumers feel they’re buying peace of mind by purchasing new.

Established properties the same size in the area can be a lot more expensive. Local amenities can sometimes not be anywhere near as advanced than they can be buying in a zone where there is lots of development.

People make assumptions based on one development that’s been packaged well and that can be dangerous.

If you have a question or would like to know more about buying off the plan join us at our next seminar or contact me directly, I would love to talk to you info@awesomelendingsolutions.com.au

Whether you are looking to buy your first home, move home, refinance or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Contact us on 1300 761 988 or info@awesomelendingsolutions.com.au

How to solve the biggest problems with off the plan?

Property investors love numbers. It doesn’t get much more satisfying than snapping up a house or unit for less than its value, renting it out for a good return and then sitting back while the compound growth machine clicks into gear.

Owner occupiers, on the other hand, need much more than this from a property. They want a place to be easy on the eyes, practical for their work and lifestyle requirements and in possession of a comforting home feel.

For these reasons, buying off the plan is probably easier for the former than the latter. It is hard to figure out if a place is just right for you when it is nothing more than a blueprint, council plan or artist’s impression. The finished product can be a similar disappointment to when your favourite book is turned into a movie, and the main character looks nothing like you imagined. All you can consider is whether or not the numbers stack up, how likely the developers are to deliver on their promises and whether the contract conditions are beneficial for your situation.

The pitch

 Developers can be up against it when trying to sell properties off the plan. They need you to help them cover their up-front financial requirements and help ensure the project is a success. For this reason, getting in at the early stages of development can be quite beneficial. Some of the positive points can include:

 The best price – the first properties usually released go for the cheapest, because the developers need fast early sales. Once they meet their financial requirements, they often up the purchase price on the remaining properties to make up for lost profits.

Today’s price for tomorrow’s equity – An off the plan purchase means you can lock in the ownership of a property, without having to settle for an extended period. It may be one or two years before settlement, so capital growth can often make your initial deposit more valuable in the meantime. The risk here is that the value may decrease in this time, so it is important to be sure about the area, not just the property. If you intend to hold the property long term, value fluctuations in the immediate future may not overly concern you.

Time on your side – The long settlement period means you have some breathing room to take care of the investment, or to organise to move house if you intend to be an owner-occupier. You can also use the time to save money and reduce the amount of finance you will need to borrow.

Government incentives – New properties are all the rage at the moment, as far as state and territory governments are concerned. Most provide stamp duty concessions for brand new properties, as they attempt to stimulate their economies through construction. 

Pick of the bunch – Getting in early allows you to choose your purchase from a range of properties within the development. You can grab the one with the best view, or that’s furthest from a busy street. You don’t usually have multiple options within the one particular location when buying an established property. 

If you have a question or would like to know more about buying off the plan join us at our next seminar or contact me directly, I would love to talk to you info@awesomelendingsolutions.com.au

Whether you are looking to buy your first home, move home, refinance or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Contact us on 1300 761 988 or info@awesomelendingsolutions.com.au

The Ultimate Cheat Sheet To Off The Plan Research

Always wanted to know if buying an off the plan property was the right investment decision for you?

Don't want to have to think about the amount of research that would be involved in making this decision.

Well, keep reading as we bring to you our insider cheat sheet on researching if off the plan is for you.

The benefits show that buying off the plan can be a strategy that works for many investors. Naturally, you have to do your regular research to ensure that the numbers work for you, including finance, return, growth potential, gearing, depreciation benefits and so on. Also, the complex nature of an off the plan purchase means you should conduct a range of other checks to make sure the investment runs as smoothly as you wish.




Check 1: Contract

Buying off the plan involves signing an off the plan contract of sale, which is drafted and tailored quite differently to a normal contract.
According to many of our property law experts, one essential piece of advice is that before signing, you seek legal advice from a contract and property law professional. It is critical to check that the following factors are included in your contract:

Cooling off period if you change your mind: A cooling off period of between three and five days applies to your contract in most states. That means you can change your mind about purchasing the property during this time. However, if you decide to withdraw during this period you may be charged with a termination penalty by the developer (0.25% of purchase price). Once this period ends, you are legally bound to buy the property.

Adequate plan disclosure: In an off the plan contract you are provided with plans and specifications of what the developer intends to build and construct as the finished product.

Usually, you will be given proposed plans yet to be approved by the local council of the entire project.
Also to proposed floor plans of the particular property, you have chosen, plus a schedule of finishes for the property (sometimes identifying an appropriate standard the developer has decided to use).
That is usually done prior to signing the contract of sale and discussed with the agent.

It is crucial you read and understand these plans before signing the contract to make sure you are satisfied with the level of disclosure the developer has provided to you and the detail and standard of the finishes.

In the contract of sale, developers almost always retain the right to alter these plans if required to complete the project.

Deposit: Up to a maximum of 10% of the purchase price is payable and usually held in a legislated trust account and invested until settlement.

Your contract should be checked to see who ends up with the interest earned on the investment at settlement, that is, the seller or buyer or both.
Sometimes customers are entitled to share in the interest earned.

Inclusions and warranties: The contract usually provides that the property will be constructed by the finishes and materials described in the contract.

It usually also provides the developer with the sole right to alter the finishes and materials in certain circumstances, provided the alternatives are of no less quality.

You should know that from start to finish, the developer is given a lot of flexibility in how the project is to be completed. The developer can make changes, provided they will not materially prejudice you as the buyer. If the changes are prejudicial, you want a contract that allows you the right to withdraw and obtain your deposit back. Sometimes, contracts enable you to customise the design (within the structural constraints of the building) to suit your individual needs. You can also select from a range of various fittings, fixtures, appliances, internal colour schemes and latest designer finishes.

Review inclusions and warranties in the contract to ensure you are protected from prejudicial changes and to see whether you can make your custom changes.

Defects: Normally, off the plan contracts provide that the developer is to remedy any defects identified by you as the buyer, prior to you settling on your purchase.

Prior to settling, as the buyer you are given a right to pre-inspect the property and identify any defects to the developer.

Stamp duty: Stamp duty must be paid on all purchase contracts. There are strict time periods involved and certain concessions and exemptions available to buyers of residential property. There are certain conditions that must be met to gain these exemptions or concessions. You need to obtain appropriate legal advice early as to your stamp duty liabilities in the contract.
Completion: The contract will usually offer buyers with an estimated time of when the developer intends to complete the project. The developer is provided with the flexibility to extend or alter these time frames while to take all reasonable steps to carry out the project as quickly as possible. If the developer cannot complete the project within this period, then both the developer and the buyer can terminate the contract. In those circumstances, the deposit is refunded to the customer. Again, legal advice should be obtained prior to signing the contract to ensure the buyer’s rights are adequately protected.


Check 2: Builder/developer

Before entering into a contract with a developer, it’s important to perform a background check. Start by visiting the company’s website. You should be able to access information relating to the past and present projects, as well as business numbers and contact details. It should also be clear who the directors of the company are.

Then, utilise online forums to find out whether other investors have had positive or negative experiences with the same developer in the past.

Once satisfied, ask for the licence number of the builders used for the construction of the property. You can then do a licence check on any of the state government web sites, to obtain information such as:

-Details about the licensee, including address, date of birth and the work he or she can do

-The date of issue and expiry of the license

-Conditions endorsed on the license

-Names of partners in a partnership, or directors of a corporation

-The results of any disciplinary determinations and prosecutions

-The number of insurance claims paid in respect of work done by the holder

-Details of penalty notices issued to the holder

-Any cancellations or suspensions of the license


If the search turns up any concerning results, you may want to reconsider entering into a contract with the developer. A legal professional will also be able to advise you of other available checks you can carry out.
If you pay over the odds, you may be waiting for others to fulfil the requirements of the developer to start and could be sitting a while. An 18-month sunset clause is standard. Be cautious of longer dates.


Check 3: Home warranty insurance

It is the developer’s legal responsibility to provide home warranty insurance cover before entering into a contract for the sale of the off the plan property, provided the deal is for more than $20,000. The insurance covers the owner of the property for loss or damage resulting from non-completion of work, loss of deposit, or breach of statutory warranty.

Residential buildings of more than three storeys in height are exempt from home warranty insurance cover.

Construction of a multi-unit residential building of less than three storeys (not including car park) requires the developer to attach a home warranty insurance certificate to the contract for sale.

A certificate of home warranty insurance should be an original, issued by the insurer. It should feature the property’s address, the name of the homeowner, the name of developer, the name of insurer and the total sum of the contract. You should contact the insurer directly if unsure that the insurance certificate is valid.

Check 4: Financing the purchase

It can be tricky to have finance approved for an off the plan purchase and many investors end up losing their deposit after being unable to complete the deal. Some lenders are reluctant because properties may be sold for more than they are worth, or in an uncertain market their values may decrease between the signing of the contract and the property’s completion.

Some lenders protect themselves from possible loss by capping such loans at 80% LVR; while others will require later reviews of any pre-approvals they issue at the time you sign the contract.

Talk to Awesome Lending Solutions for more advice around the best way to structure your finance.

Check 5: The property and its suburb

Choose wisely

For most of the plan developments, it’s a case of first in, best dressed. Penthouse apartments and others with the best views are often snapped up first and may go for more than the other properties on the development. It’s a good idea to go in knowing what you want from your apartment. Questions to consider include:


-Is it facing towards the nicest aspect?

-Is it removed from noise sources such as busy roads or workshops?

-Is its car space conveniently located?

-Is it as high or low in the building as you would like?

The right choice of the apartment can make your purchase worth more than others in the same building while costing the same amount. This maximises its potential for capital growth and rental yields.

Prime position


Naturally, there is no point picking the nicest apartment if it’s in a suburb that is likely to stagnate. Your research on the area that the development is in should be the same as if you were buying a property anywhere. It is important to remember the following:


-An apartment in the development may seem cheap, but it may be over-valued compared to other properties in the suburb

-You may have been promised a high rental yield, but this won’t last if tenants find other properties with less rent

-The suburb itself should have regular growth drivers; such as good amenities, infrastructure, a favourable supply and demand ratio and be close to public transport.

If you have a question or would like to know more about buying off the plan join us at our next seminar or contact me directly, I would love to talk to you info@awesomelendingsolutions.com.au

Whether you are looking to buy your first home, move home, refinance or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Contact us on 1300 761 988 orinfo@awesomelendingsolutions.com.au

What about off the plan finance?

Continuing with our theme this month of the off the plan purchases we look at the finance side of things.

When to arrange finance? What are the risks if the property doesn't live up to expectations?

So what about financing an off the plan property? And how do you mitigate market risk?

1. What happens if I can’t get finance when I’m required to settle?

At this stage is where many investors get caught out with buying off the plan. Once you have entered into the contract, you are required to pay by the agreed date. If you can’t fulfill this commitment, you may be forced to sell (potentially at a price lower than the original contract price) and could risk being sued by the developer.

Make sure you’re fully aware of the following before signing on the dotted line.

*   Obtaining pre-approval can be challenging. Loan pre-approval from your lender will be required for you to complete the contract of sale with the balance due at settlement.

Banks are conservative and won’t lend for something that doesn’t yet exist.

*   Your pre-approval may not stand until settlement.

 The banks will usually impose additional conditions on off the plan pre-approvals because of the ‘unknowns’.

These include market movements, interest rates, your personal fiscal situation, etc. - all of which can change in the time it takes for the project to reach completion.

The bank may impose a time limit on the validity of your pre-approval and will conduct another review of your financial position when the actual loan is required.

When they do lend, which will be close to the completion date, finance will be based on the value of the property at completion.

Usually at a loan to value ratio of 80% - 90%.

This means if the market has dropped and the value of the property is less than it was when you signed the contract, you will need to find other ways to fund the shortfall. 

Unless, of course, you can obtain a better valuation from another bank.

A shortfall situation can often be avoided with careful market research, but it’s still wise to be prepared.

Aim to have l0% of the property’s value on hand (in cash or equity) by settlement so that you are not caught short in the event of a market fall.

2. Is there going to be a demand for my property when construction is complete?

Market research when buying off the plan follows the same principles as any other property investment. It is an essential step in the buying process to ensure you’re not going to be left with a property you can’t rent out or a loan that’s greater than the value of the property.

Assess the supply pipeline in the area and the drivers of population growth, and then determine whether an undersupply or oversupply is likely. Two key areas to investigate:

*   What else is being built in the area?

Look at other developments under construction or in planning and compare location, developers, price, quality, etc. Investigate the quantity of development and what impact this supply pipeline will have on future demand.

 *  Who makes up the rental market and will your property be appealing?

Understand who makes up the rental market in the area and make sure your property (both in terms of quality and location) will be desirable to this demographic. Professionals, students and empty nesters – the three top groups that make up apartment dwellers will all have different requirements and expectations.

3. Is the property a fair price?

Based on the above research, do you feel the developer is asking a fair price for the property? Prices for off the plan apartments can be over inflated.

Don’t be afraid to open negotiations and back up them up with market data and comparisons with similar properties.

Final advice?

Don’t discount off the plan investments, just be smart!

Get a lawyer experienced in off the plan contracts to review yours in detail. Off the plan, arrangements will always, unsurprisingly, favour the developer.

Be informed about what you’re getting into.

If you feel 100% confident about the quality of the build, market demand and your ability to cope if things go pear-shaped, then there’s no reason to avoid buying off the plan!

Whether you are looking to buy your first home, move home, refinance or invest in property, a mortgage broker can assist. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local Awesome Lending Solutions broker. 

If you have a question or would like to know more about buying off the plan join us at our next seminar or contact me directly, I would love to talk to you info@awesomelendingsolutions.com.au

How three money beliefs can get you the wealth you deserve

Do you feel like you are not living the life you deserve? And, no, I'm not talking about something impossible. There's a contrast between your dream of having a manor and a profound conviction that you're not earning what you feel you're worth.

There's a difference between your dream of living like Tony Stark and a deep conviction that you're not earning what you feel you're worth.

I ended up in that same spot a while ago. What I didn't know then was that the cause of my lack of income was not an outside situation. I was constraining my wealth with my mindset. What we don't realise is we all have the ability to bring astounding things into our life, alternatively we all have the ability to reject that same abundance. I was feeling trapped. 

We do this through beliefs that are so ingrained in us that we don't even notice them. So the first step in engaging our full ability, and getting out from under these beliefs, starts with taking note of them. 

When you become mindful of your restricting beliefs, you can begin to figure out how to test them, and tap into your true potential. Accordingly, once you learn to perceive your abilities you will be able to identify opportunities to increase your wealth. This mindfulness was a key stride in my voyage of breaking six figures with my business. 

Through the process of perceiving, and changing, my restricting beliefs, and through working with multiple clients, I've come to see the three fundamental beliefs that restrict individuals from showing abundance. Once mindful of them, you can begin to venture out of them, and your battle with cash flow will end. 

1. You don't genuinely expect what you need. 

When you don't have the abundance, you'd like in your life, it's often as a result that you are not expecting it as a probability. I often find clients are surprised when they realise this. Some even deny it at first, and you may even be having the same response as you read this. 

Let's assume you would like to double your month to month income, but you don't truly anticipate that this will happen because you don't know how to do it. The minute you get tied up in the how, you fall into not expecting a positive result, so you rationally cut yourself from your opportunity to get what you desire. 

Let me explain it this way: you will never receive more than you can imagine. In the event that you can't imagine how you can double your income, and then any attempt will fail this belief test. You need a change in your perceptions so that you are prepared to expect, and get, what you deserve. This belief and attitude will become the force of your dreams.

This change in psyche to the spot where it thinks something new takes time, and you will need to create tools and opportunities to work on it to the point where your beliefs and responses are part of who you are. 

2. You are not exploiting open doors. 

While everyone has the desire to create more income and abundance, it is amazing how oblivious to opportunities people can be. As a result of beliefs when an opportunity appears for them to get going in the direction of their objective, they seem to fall into the propensity for saying no it can't work. 

For the most part, happens on account of apprehension, fear, nervousness and other emotions that get in the way. 

For example perhaps doubling your income requires you to contribute cash to become a shareholder in the business, and you have to figure out how to do that. Perhaps you will need to travel and be away from your family to achieve your goal. There can always be a reason to say No.

So get genuine about what your reasons are and try to find a way around them. Perhaps begin with taking a few open doors even though you have a natural inclination not to. Remember when you don't do things that cause you to develop, nothing changes. What's more, if nothing changes, you won't have the capacity to build even greater wealth. 

3. You are not in contact with your abundance. 

You are not just scarce with yourself (because of your conviction that you have to clutch each dollar), but you are the same with others. 

The decisions we make about how and what we spend our income on can have more to do with our feelings and thoughts than any genuine rationale. So investigate how you are deciding to spend your money.

Each time you have the feeling that you don't have enough and choose to hold on to money or time or talents, think about why?  How have you come to believe that there is not enough?

Each time you find yourself not sharing and being thankful for what you have is it because you are suspecting that there is insufficient. 

What you put out comes back to you. So give and give liberally and abundantly, and that is the thing that come back to you.

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Off the plan! What are you buying?

Buying property off the plan has never been as popular as it is now, with purchasers of all ages responding to much more sophisticated forms of marketing, selling and delivering the product.

The increase in off-the-plan sales has been driven by demand.

It's a secure way to buy a new apartment in what's a popular market segment with limited supply.

The advantage of buying exactly what you want, rather than having to compromise on existing property is now properly understood.

People are keen to get into a project early so they can choose the pick of apartments off the plan, rather than waiting until it's built and then just buying what's left.

It allows the opportunity to secure a property without having to settle for between 18 months to potentially four years for some developments.

You can study floor plans and floor plates and research everything and know you can have the best, like the biggest balcony or the sunniest garden, and what suits best. It's about having a bit of control, and knowing the timing.

When life throws up a curve ball, such a purchase can give more flexibility. If a buyer is suddenly transferred to another city, they can sell their interest to someone else.

We've found younger people and investors comfortable about buying off the plan for a while, but the more mature demographic, who traditionally shied away from that form of purchasing, are now coming into the market.

Five reasons to buy off the plan

1. If you think that new car smell is heavenly, just wait until you breathe in the air of your new, never-before-lived-in home, and admire the gleam of the new appliances, the virgin walls and the pristine floorboards, carpets or tiles.

2. Provided you buy well, it can be cheaper than buying an existing property, as well as savings on stamp duty and grants for buying new.

3. The design of new apartments and townhouses has improved hugely since the days of cramped, dark interiors with wasted corridor space, little storage and no balconies.

4. If the market is rising, the value of your apartment might have soared by the time it is finished and you have to pay for it – after saving for the two years of construction – and move in.

5. You get the latest in technology and finishes that may keep strata levies down, or great resort-style facilities that may mean you never have to leave home for entertainment again!

Five things to look out for

1. Check the developer. Look at what buildings they've developed before. Make sure there have been no problems and do the same due diligence with the builder and architect.

2. Look at the local plans and phone the council to make sure any open space is not zoned for another development.

3. Make sure the estimated levies are realistic to pay for the services and facilities promised. You don't want the levies to go up when it is discovered the bills are higher than predicted.

4. Avoid one-stop-shop situations where the developer, strata manager and building manager are the same company. When conflicts arise, you need someone on your side.

5. Read the proposed bylaws to ensure they suit your lifestyle. There is no comeback, for example, if the real estate agent told you it was pet-friendly, but the bylaws ban animals.

If you have a question or would like to know more about buying off the plan join us at our next seminar or contact me directly, I would love to talk to you info@awesomelendingsolutions.com.au

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Is buying off the plan the way to go?

With tax cuts, government motivating forces and less expensive than market prices, purchasing off the plan can be a definitive shrewd investment choice. Anyhow, similar to each speculation, it takes a touch of exploration, business sector learning and an exact comprehension of precisely what you're purchasing.

Ever seen an incredible looking picture of a property and a stunningly better looking cost?

Odds are that it is presumably an off-the-plan deal.

Purchasing 'off-the-plan' mostly means going into a legitimately tying contract to buy a property before it achieves completion and approval for occupancy granted.

So as it were, you are purchasing a guarantee – a guarantee that the developer will finish the construction of a property as per agreed terms.

The advantages

Undoubtedly purchasing off-the-plan can have noteworthy monetary benefits for a purchaser.

In Australia, purchasers can enjoy tax depreciation benefits, government motivating forces and the "originality" of another property without paying the top market price.

Initially, home buyers around Australia can enjoy exemptions and concessions on stamp duty for properties acquired off-the-plan.

They can likewise welcome government grants.

In NSW, for instance, off-the-plan purchasers may be eligible for a grant of $5,000 (as long as the value of the purchase of the new home does not surpass $650,000.

The dangers

There is a characteristic risk with any 'purchase now, pay later' arrangement – and that will be that you may not get what you thought you paid for.

The uncertainty of contract terms is a huge factor in disputes emerging from off-the-plan contracts.

That is the reason it is imperative to have a thorough contract that sets out unequivocally and without question precisely what you are purchasing.

From the highlights, installations and fittings to the protection, voting rights (in the event that its a strata property), timelines and dispute resolution process.

Wendy* purchased an off-the-arrangement unit in Ashfield NSW, however, came to experience critical issues with garage/car park flooding that was not expected under the first contract.

Rising damp and different issues brought insurance coverage under the spotlight, and various strata gatherings were held to attempt to determine them.

"My recommendation would be to peruse your agreement carefully, get sound legitimate guidance furthermore be mindful of your rights and voting privileges," Wendy says.

As per NSW Fair Trading, getting free legal and financial advice is utterly key concerning purchasing off-the-plan. NSW Fair Trading advises that purchasers can likewise profit by asking the right inquiries. These may incorporate,

"Would I be able to make any improvements to the kitchen and bathroom?

Will I choose the appliances?

Will I visit the site amid development?

Can I on sell the property before its completion?

What are my rights if development is delayed?"

The issue of quality

A typical grumbling from purchasers who have had an off-the-plan issues have come about, as a result, of the quality of fittings and a space in the middle of desire and reality.

Purchasers ought to take a close look at the fittings timetable connected to the agreement and see what sort of fittings will be incorporated, including brand, make, and model.

They ought to likewise know what will happen if an item is out of stock or taken – will it be replaced with an item of equivalent worth and quality – and will the purchaser have a say?

Insurance suggestions

Purchasing an off-the-plan property where the developer/builder is excluded from providing any form of home warranty insurance is another danger.

An illustration of this in NSW is non–multi-story structures, where a home warranty insurance certificate is not needed to be included in the agreement until development starts.

For this situation, purchasers are cautioned to guarantee that they have acquired evidence of insurance before they settle the deal, as they can't cancel the contract once it has been settled.

Knowing the market

You may think you've discovered a fantastic opportunity, however, remember that market value change and further developments in the area might eventually affect the value of your property once it is finished.

The key is to do your investigation and research and seek to understand what other developments have been approved in the area you are looking at purchasing.

Are high rises being constructed?

Are there subdivisions and land grants?

At the end of the day, how much your property is worth can simply come down to supply and demand.

Purchasing off-the-arrangement can be a profoundly exciting and profitable endeavor.Be that as it may, make sure to do your investigation and get expert advice so that you can dodge the risks.

* Name has been changed 

If you have a question or would like to know more about buying off the plan join us at our next seminar or contact me directly, I would love to talk to you info@awesomelendingsolutions.com.au

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