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 In Lifestyle Property Management

The Benefits of Buying an Investment Property off the Plan

‘Buying brand new means the latest fixtures and fittings as well as less repairs and maintenance issues. This will attract the best quality tenant and they will typically stay longer…’

Buying off the plan can be a daunting prospect as it involves purchasing a property before it reaches the final stage of development, however with enough research and due diligence it can be a successful endeavour.

To secure a property off the plan, most developers require a signed contract and an upfront deposit of 10 per cent. Investors then have around six months to a few years to procure the remaining funds which are only required once the property is complete and settlement occurs.

Another financial advantage for investors is the option to claim depreciation of their brand new asset. A quantity surveyor can prepare a schedule, allowing significant depreciation benefits to be offset against the investor’s taxable income.

Most developments will allow a purchaser to personalise their property and make a limited number of bespoke changes to the design. Investors planning on leasing should approach this opportunity with caution.

‘We recommend investors don’t customise, but if you do, keep the changes fairly “vanilla” to offer universal appeal. Don’t pick polarising colours or materials,’ says Leonard Teplin, Marshall White Projects director.

… a new property will come with a builders’ guarantee, hence if any structural or interior building faults arise within a set period of time, they will be repaired by the builder.

‘Buying brand new means the latest fixtures and fittings as well as less repairs and maintenance issues. This will attract the best quality tenant and they will typically stay longer, meaning the landlord will benefit from a higher rate of return and a better choice of tenant,’ says Leonard.

Additionally, a new property will come with a builders’ guarantee, hence if any structural or interior building faults arise within a set period of time, they will be repaired by the builder.

Of course, there are inherent risks associated with committing to a property before it’s completed. It is important that your contract is clear and comprehensively defines the finished product. Share the contract with your legal professional as purchasing off the plan can be a relatively straightforward process if you’re fully informed from the start.

If you need any further assistance or investment property advice, please contact our Marshall White Property Management Team (03) 9822 8711. For more information about buying off the plan please contact Marshall White Projects.

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