What is Off Plan Property Investment: A Beginner’s Guide

Investing in property has long been a smart way to grow your finances, and purchasing off-plan is an attractive choice for those looking to enter the market at a competitive price. 
 
But exactly what is off-plan property investment, and why might it be worth considering? This blog will walk you through the essentials. For a more in-depth look at off-plan property investment, check out our complete guide on the topic.  
 

What is Off-Plan Property?

An off-plan property is a property you buy before it’s been fully built – or sometimes before construction even has begun. You’re essentially buying based on the developer’s designs, which means you often invest at a lower initial price compared to buying a completed property. 

Off-plan property investment entails buying this kind of property with the expectation that it will increase in value once it’s finished. You can then sell the property for a profit, or rent it out for a steady stream of income. 

Off-Plan vs. Completed Property Investments

To understand the appeal of off-plan properties, it helps to compare them to completed properties:

Price Advantage

Off-Plan: One of the main benefits of buying off-plan property is the typically lower purchase price. Developers often offer discounts to early buyers to secure funding for the project. This means you could end up paying significantly less than the market value once the property is completed.

Completed Property: When purchasing a completed property, you’re paying the current market price. This typically doesn’t offer the same initial cost saving, but the price is generally more stable and reflects the property's true market value.

Flexible Payments

Off-Plan: Payment plans for off-plan properties tend to be more flexible. Buyers can usually pay in stages, with an initial deposit followed by instalments throughout the construction period. This staggered approach can ease the financial burden. 

Completed Property: When buying a completed property, you typically need to pay the full purchase price upfront or get a mortgage for the total amount. This means a more immediate financial commitment, which can be challenging for some investors.

Risk Factors

Off-Plan: Off-plan investments generally come with a higher level of risk – whether it’s construction delays, changes in market conditions, or even the possibility that the project might not be completed. There are of course ways to minimise these risks however.  

Completed Property: Completed properties come with slightly lower risk because what you’re buying already exists. However, the property’s value might not increase as dramatically as an off-plan property may by the time of completion.

Capital Growth Potential

Off-Plan: Off-plan properties typically offer higher capital growth potential. By the time the property is completed, it could have appreciated significantly in value, meaning you can sell at a profit or rent it out for more.  

Completed Property: Although completed properties can appreciate over time, you may not see the same rapid increase in value as you would with an off-plan property. But you also avoid the risks of waiting for construction to finish.  

Immediate Rental Income

Off-Plan: You need to wait until construction is complete before renting out an off-plan property. This waiting period can last months, if not years depending on the project.  

Completed Property: A completed property can be rented out immediately, giving you an instant income. This is especially appealing if you’re relying on rental income to cover mortgage payments. 

Who Typically Invests in Off-Plan Properties?

Investing in off-plan property isn’t just for experienced investors. Many people find this type of investment appealing:

• First-Time Investors: Because off-plan properties often have a lower initial cost, they’re a great option for those just starting out with property investment.  
  
  
• Long-Term Investors: Long-term investors often see the potential value increase of this kind of property to be a benefit worth investing in.  
  
  
• Buy-to-Let Investors: Those looking to rent out properties benefit from buying at a lower cost, which often leads to better rental yields once the property is completed. 
  
  
• Overseas Investors: For international buyers, off-plan properties can be a great way to invest without having to manage a physical property right away. 
   

Why Consider Off-Plan Property Investment?

There are many benefits to investing in off-plan properties – a key one being a lower initial cost, but with the potential to make significant returns. But it requires careful planning and the right guidance. 

That’s where working with a property management company like The Right Property Group is invaluable. Whether you’re a new investor just starting out, or experienced and looking to grow your portfolio – we help you take the risk out of off-plan investment with exclusive access to high-potential properties and a team to navigate you through the entire process. 

Want to Learn More?

For a deeper dive into off-plan property investment, take a look at our comprehensive guide. Or better yet, get in touch with one of our property experts who can walk you through your options step-by-step.