Why should your next property investment be a new build?
If you’re thinking about embarking on your next investment in property, you’re probably overcome with choices. Do you opt for buy to let? Is residential or student accommodation the best option? Should you pick the north or the south?
Adding to this list, another big decision to make when thinking about putting your money into property is whether to go for refurbished, existing older builds or new build property. Refurbished buildings are revamped to provide modern accommodation within an existing structure, and units in older builds which are already completed can also be bought as a property investment.
Nevertheless, new builds are becoming increasingly popular in the modern market and are a hit with buy to let property investors. Want to know why? Read through this all-inclusive guide for off-plan investments!
Off-plan is a type of brand new development. Properties can be purchased through extensive plans prior to their material construction. This may seem like a big risk to take, however, there are tons of reasons why off-plan is the way to go when it comes to investing.
RWinvest proclaims that ‘Investing in new build properties is often considerably cheaper than investing in pre built properties and the returns are often significantly higher’ – and they are completely right! Because of the level of risk associated with these kinds of developments, properties tend to be more affordable for investors. The level of quality though, does not diminish, so rental yields can remain high on off-plan developments.
Investors get the first pick of shiny, brand-new apartments which usually come fitted with contemporary interior design, high-tech appliances and most significantly, energy-saving technologies. Amidst experts stressing the importance of energy efficient homes, these kinds of units are therefore more desirable for 21st-century tenants and will provide a future-proof investment strategy with fixtures in line with a ‘green’ environment.
Peace of mind is available with newly built properties because there’s no need for any redesign or building maintenance right away, and if there is down the line, a management company will take care of it for you. This is because most off-plan investment properties have an experienced firm who oversee everything from tenant requirements to building repairs.
What’s more, if you invest in an off-plan unit ahead of its completion, there’s a chance that capital appreciation could begin to amount straight away. Despite the progression of the development, its surrounding area may improve dramatically over the duration of the build in terms of regeneration, which means investors can start seeing an increase in value on property before their unit is even tenanted!
The procedure for purchasing off-plan property is simple. It’s common to be asked to put down a reservation fee in order to secure your unit. An exchange of contracts and further payments will then be due, with the final amount required to be paid in full on completion. Completion dates are set by the developer who will keep you updated with construction reports throughout the development process, but be sure to undertake thorough research before jumping into the world of off-plan and new build property.