Is buying an off-plan a good idea for first-time buyers?

Off-plan properties, which are properties still under construction and not yet handed over, are in high demand these days. In fact, investing in an off-plan property can be an excellent investment opportunity for some people. However, investments come with a lot of dedication and require time for you to reap the rewards, so before deciding whether or not to invest, you should carefully weigh the advantages and disadvantages.

Some potential advantages of buying an off-plan property include:

The opportunity to purchase a property at a lower price 

Off-plan properties are typically sold at a lower price than completed properties, as the developer is looking to generate sales and fund the construction process. The money paid for this property is put into an escrow account, which can only be used to fund the construction of the project. This can provide an opportunity to purchase a property at a lower-than-market price.

The opportunity to customize the property

With an off-plan property, you may have the opportunity to customize certain aspects of the property, such as the flooring, kitchen appliances, and finishes. This can be a great way to personalize your property and make it feel like your own.

The opportunity to take advantage of market appreciation 

If you buy an off-plan property in an area that is expected to see significant price appreciation in the future, you may be able to sell the property for a profit once it is completed and the market has appreciated.

However, there are also some potential risks to consider when buying an off-plan property:

Delays in construction

There is always a risk that construction on an off-plan property could be delayed, impacting the completion date and potentially resulting in additional costs. Even more, this could be an inconvenience if you’re in a rush to resell or rent out your property.

Changes to the final product

The developer may make changes to the final product, such as altering the layout or finishes, which could affect the property's value. Some contracts might mention clauses in which the developer serves the right to make alterations to the final product without prior notice, so make sure to read your contracts properly.  

Difficulty getting financing

It may be more challenging to obtain a mortgage for an off-plan property, as banks may be hesitant to lend money on a property that is not yet completed. Some banks will only be able to provide you with 70% of the price rather than the full amount.

Overall, buying an off-plan property can be a good investment opportunity, but it's important to carefully consider the potential risks and benefits and do thorough research before making a decision. It may be a good idea to speak with a real estate professional to get a better understanding of the potential risks and rewards of this type of investment.