Buying Off Plan Property Overseas | General Property News

Buying Off Plan Property Overseas

Buy Off-Plan Property Overseas

While researching for property investment overseas on the Internet, the term ‘off-plan’ must have popped any number of times on property websites. As a Brit investor, you must be wondering as to what the term implies (literal meaning could be confusing!). Besides its meaning, here is everything you should know about buying an off-plan property overseas.

First Things First! – The Meaning of Off Plan Property

If you are planning a property before its construction is complete, then you are buying that property off-plan.

The concept of buying off-plan is, certainly, not new. Whether it’s overseas property investment or at home, off-plan properties are an instant hit among the investors from all walks of life. Basically, by buying off-plan property overseas, you are reserving a piece of property overseas under development, or to be developed by the builder. The buying process, of course, starts only after the approval of building plan from the relevant authorities. You can buy off-plan at any stage of construction before it’s officially completed, i.e., the completion certificate is issued by the relevant authorities.

Advantages of buying off-plan property Overseas

The ever-increasing demand for off-plan property overseas is not without a reason. In fact, it makes great business sense to buy the property off-plan, which may cost you a fortune after completion.

Here are some of the advantages of investing your hard earned money in an off-plan property overseas:

In a market, where real estate prices are prone to violent fluctuations, there’s no better option than off-plan. By buying off-plan in such a market, you are ensuring that you pay considerably reduced amount today, i.e., the prevailing market price. You never know where the prices end up by the time construction is complete. And in a country, where economy is booming and tourism flourishes, normally, real estate prices are more than likely to go up. Thus, considerable savings is a definite high point in any off-plan real estate investment overseas.
If you are investing off-plan in a property that is in its early stages of construction, and if the rules and regulations allow, then you have the privilege to give your inputs into the layout and finish of your chosen property. According to your tastes and preferences, you can suggest colour of walls, tiles, carpets, kitchen and bath accessories, etc. This way, you’ll be ensuring customized treatment of your home even on a foreign land
One of the major highlights of the off-plan property is the stage-payment often required by the builders. This simply means that you book the property by making a small down payment, and make balance payment in manageable batches as and when required by the developer. According to your financial health, you can opt for different payment plans offered by the developer of an overseas property.
Quite often, the final payment is the biggest one. When it’s time to make the final payment, the astute buyers, who had a simple profit motive to buy the off-plan property in the first place, put the property in the market for sale. Of course, he’ll take such a step if the real estate market in that country is bullish and he is assured of making handsome profits by selling it at this stage.
Some off-plan investment plans also offer guaranteed regular rental yields after completion. This is common in countries and regions, where tourism or service sector flourish, and as a result, the demand for rental property is always on the upswing. The buyer has dual satisfaction in this case, of owning the property as well as getting assured rental income without taking the pains of renting it out himself or herself. The entire risk is borne by the developer. If the rental income from the property exceeds the guaranteed amount, he takes out the profits, and if it is lower, he assumes entire loss, and makes the agreed payment to the owner.

Tips for Buying Off-Plan Property Overseas

Though off-plan property investment seems lucrative, there are some pitfalls waiting for the vulnerable buyers. It’s better to be safe than sorry!

Here are some tips to help you avoid the dangers of getting duped while buying an off-plan property overseas:

Since you are buying off-plan overseas; this means you have little or no knowledge about the real estate market of that country. Such a scenario calls for hiring a reputable real estate agent who knows the ins and outs of property market in your preferred country.
Never hesitate to bargain if buying directly from the developer. Even if the deal sounds fair, still you must give it a try. Some developers will allow considerable cuts in their commissions in order to secure your order.
The credibility of the project under construction must be ensured by making proper research on the Internet, and querying about the same from the relevant authorities in that country.
Where possible try to buy where the project under consideration has a bank guarantee to back it. In an unfortunate event where the project falls through, you’ll be, at least, assured of getting back your invested money. In the majority of new emerging markets however this is often not possible.
A reality check of the peripheral real estate market should be undertaken in order to assess the promises made by the developer.

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