Off Plan Property

Off plan property investments tend to occur when the property market is going well and there is a continual supply of new property being planned and constructed. When someone buys 'off plan' it means that the property may not yet be under construction or perhaps it is in the process of being constructed. An off plan purchaser, makes the investment in the hope that once the building is completed, it's capital value will more than have appreciated than the surrounding property values.

There are a few reasons for this the first is that new properties always tend to go for a premium - just because they're new. Second, like most new developments, the developer will want to get his cash out once the various phases have been completed. So it is rare that a whole development will finish all at once: as the development is built in phases, so their cash comes in in phases. Third, the overall effect of having the whole property completed and once the builders are foo site means relief to the tenants and owner occupiers who live there. This means that letting agents will be able to command better paying rentals and that the families can live in peace and get on with their lives rather than have builders dominate their environment!

The growth in off plan came about as a result of the growth in the buy to let market and cheap money. It seems for the moment, this scenario has evaporated but these traditional buy to let property investors are hoping for a return to the old days and it remains to be seen whether this will actually come about.

Off plan sales work well for the developer as well as the property investor: the developer gets his cash committment early before most of the real expenditure is incurred and it also offers the investor with the opportunity of a discounted property at the prevailing rates.

Return from Off Plan Property to Buy to Let