Buying off plan

[Linda]

Hello

Does anyone have any experience on buying property during its development? There are new flats being built in an ideal location (close to shops and train station) and I'm quite interested in going to the show-room but I'm not sure what things to look out for. I always bought properties already built.

Has anyone gone through this process? Advice would be welcomed.

Cheers

L

[Melboy]

I havn't personally bought off plan Linda but I am well aware of the pitfalls in doing so.

Buying off plan is OK in a rising market because you can secure your property quickly and avoid any price increases in the future of the development.

In a static market or a shaky market, which could possibly happen here over the next 12 Months, than you need a bit of caution because you just might overpay especially if the Developer starts to discount the sales to clear the unsold flats out of the way to pay off creditors.

Mel.

[Linda]

Thanks Mel

[Trenners]

Hi Linda,

Melboys advice is very good.

I would add that lots of buy to let investors have bought off plan (often encouraged by good deals from the developer) and then found that virtually the whole block of flats have been sold to investors.

This has a really adverse effect on rental yields as each of the buy-to-let investors try to compete with each other to attract the tenant. All of the flats look the same, all of the flats are presented the same ... so the only differentiator is probably going to be the amount of rent charged.

Good luck

Mark