When investing in New Build properties, there are a number of avenues you can pursue.
You could, for instance, buy a newly built apartment from a brand new development.
Or, you could get in quick, as it were, and buy off-plan. This means while the development is still at the planning stage i.e. before the first brick has even been laid. Do this, and you can look forward to a discount, as well as your choice of flat.
Another plus with an off-plan property is that there is always the possibility the flat will increase in value over the period of time it takes to build it. If it’s by a decent amount, then you can sell and pocket the extra (this is an excellent strategy in a buoyant property market). If the apartment doesn’t gain in value, you still have the rental income to look forward to.
The practical benefits of a New Build property
● As a result of new government regulations based around energy efficiency, a New Build property is always going to excel in this sphere – certainly in comparison to a traditional Victorian semi etc. And that means less expensive utility bills (which a tenant is always going to love);
● A New Build will be decorated to a reasonably high-spec, with integrated appliances and a modern bathroom and kitchen. You might even get to choose your kitchen colour scheme and flooring type. This means there is very little to do (or spend) décor and furnishing-wise;
● You’ll have a guarantee against structural and cosmetic problems with a New Build flat (you’ll be given a ‘snagging’ list when you get the keys for inspection);
● You could haggle with the developer of a New Build to get a package, such as the appliances included in the property price, or any legal fees paid for;
How to buy ‘off-plan’
Having checked out the developer’s credentials by asking around in property circles (and looked at any previous housing his or her company were or are heavily involved in), it’s a case of asking to see the plans, and then making a reservation. This will involve putting down a deposit (or first instalment). You’ll usually pay the second instalment when contracts are exchanged (soon afterwards), and the remainder when you get the keys to the apartment (or upon ‘Build Completion’).
The fear with buying off plan is that the developer may go bust and your apartment is never built! But, you should be able to identify any problems early on by asking the developer for a programme of works. This outlines what will be completed, and when.
How profitable sourcing a new build can be
If you pay the deposit for an off-plan new build you bought at a discount, you can then sell it to an investor for the full price once the build is complete, pocketing the difference as profit.
But what is to stop that investor simply going and buying off-plan themselves? The answer is because your network of contacts had already tipped you off about the development, giving you time to do your research before the off-plan units were available. In other words, you got there first.
Speak to a specialist in investment properties.
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