5 Benefits of Buying an Off-Plan Property in Kenya
This plan has proved to be highly rewarding especially if the project is located in an area that is bound to experience rapid growth in a short amount of time.
REBP
Buying property off plan is an arrangement where a property buyer buys a property from a developer that is yet to be constructed or completed. Developers often use image renders and pre-construction layouts to market and sell the property to home buyers and real estate investors. This trend has seen many aspiring property owners acquire their dream properties by putting their money on nothing more than an architectural plan.
While this plan is considered risky, it has proved to be highly rewarding especially if the project is located in an area that is bound to experience rapid growth in a short amount of time.
However, it is advised to do thorough research on the property and the market before investing in such a property. The following are the benefits and cons one needs to know before purchasing an off-plan property.
Benefits of purchasing property off-plan include:
1. Low initial prices
Buying off-plan property means enjoying relatively low prices compared to when a property is complete. It also saves the investor from any future market trends that may see the rest of the houses in the area go up in price.
2. Flexible payment plans
Most developers will want a 20% - 30% deposit as a down payment.
3. Easy to change the layout plan
Since construction has not begun or is ongoing on the property, you have the benefit of making changes to the initial house layout. You get to choose what you want to be changed or improved as long as it is within the set price. It further allows you to choose the best location and the one that is ideal for you.
4. As the investor of an off-plan option, you get the chance of changing your finishing materials, however, it is important to note that any additional cost incurred will be billed to you.
5. Timing
Since the settlement can be as far as two to four years away, it is good for you since should the market value grow, you will make good equity growth.
Some of the cons of purchasing an off-plan property include the following:
1. Unpredictable market trends
One is never sure of how the market will be when buying property off-plan. If the market goes up, one makes a good bargain, but if it remains flat or goes down, then the investor will have paid an inflated price for the house.
2. Limited to no flexibility
Between paying off the off-plan and the completion of the property, there could be around a year difference or more. However, you do not have the luxury to look around or compare prices at this time. You have already locked down the price, but also got locked down since you have already paid and can’t change much.
Therefore, before committing to buying an off-plan property, carefully research and check all the parties involved, developer, management company, contractors, etc.
Also carrying out an investigation of similar neighborhood properties would also be important in guiding you on whether to make that investment. Research on things such as prices, rental amounts, and whether there’s a possibility of rent increase in the future. This helps you project whether you will be able to get your return on the investment.
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