We’ve just posted some benefits of buying off the plan on our website.
http://www.plproperty.com.au/buying_off_the_plan.html
We hope this provides some of you useful information.
Cheers,
Luke Woollard
Licensee
Pacific Lifestyle Property – Burleigh Heads, Q
http://www.plproperty.com.auLuke, I don’t think you really want to leave that post up. Buying off the plan is considered in a very low regard.
The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
Essential LinksIn all fairness, you should add a list of the potential concerns of buying off the plan…
*Property overpriced in the belief that property values will have increased by the time settlement comes round.
*Property usually cash flow negative.
*The depreciation schedule flashed round by the developer is only of full benefit to those who earn in the highest income bracket.
*Rental guarentee gives a false idea of rental yields, but once the guarentee is over it is impossible to gain such a yield.
*Developer/property manager/builder can go bust leaving investor with a defective property and no way to recoop money.
*Difficult to sell property when new, as there are several hundred identical properties in the block also for sale. This can also bring prices down, resulting in capital loss rather than appreciation.
*Holiday let investments gain greater wear and tear, don’t provide a regular income, and are often empty half the year. However, they will probably be in demand at the times in which you and your family might feel inclined to use it so don’t count on ‘enjoying the lifestyle’ as argued by Pacific Lifestyle Property.
Buying off the plan was a great investment opportunity until both the market slowed (giving less capital growth) and property developers caught on to investors and inflated their selling prices as well as deciding to spend heaps on aggressive marketing.
There are still some good deals off-the-plan, but investors need to research current market prices, the developer, the property managment company, the builder, rental potential, etc thoroughly to ensure they are not ripped off. Under no circumstance should one believe the brochures, websites, or salespeople.
See what I mean Luke?
And Luci is polite!!!
The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
Essential LinksMy response – I don’t have much time but here are a few random thoughts for everyone.
In all fairness, you should add a list of the potential concerns of buying off the plan…This is why purchasers conduct due diligence – to alleviate concerns & mitigate risk.
*Property overpriced in the belief that property values will have increased by the time settlement comes round.I don’t know where you have been looking but we are currently selling new property for 32k less than asking price of comparable properties that are > 8 years older
*Property usually cash flow negative.That obviously depends on many factors.
*Developer/property manager/builder can go bust leaving investor with a defective property and no way to recoop money.We only deal with reputable developmement companies (most are public companies regulated by ASIC)
There are still some good deals off-the-plan, but investors need to research current market prices, the developer, the property managment company, the builder, rental potential, etc thoroughly to ensure they are not ripped off. Under no circumstance should one believe the brochures, websites, or salespeople.I agree! Like any investment, a prospective purchaser needs to conduct thorough due diligence. This way there would be far less investor ‘horror stories’ which could have been easily avoided with some academic research.
Luke Woollard
Licensee
Pacific Lifestyle Property
http://www.plproperty.com.auIgnore the negheads Luke. I think those 111m^2 (including balcony) one bedroom ‘Reflections’ apartments are a steal at the best part of a million dollars.
My fancy is tickled. Care to share a bit more info? What could I expect to rake in per week in rent?
Golly I’m excited.
Thanks, F.[cowboy2]‘foundation’ – though your post is dripping in sarcasm, I am happy to share more information with everyone.
Reflections is located on the beachfront marine parade at Greenmount in Coolangatta. The development is world class so it is obviously not going to be cheap. The two towers are nearly completely sold out – many to owner occupiers who currently live in the region and are in touch with the market conditions.
Gold Coast beachfront real estate has shown extraordinary resilience to the slowing market conditions.
Two bedroom apartments remaining from $850,000 as at 3 June 2005 would conservatively expect permanent rental of 620 per week. Holiday letting is another option with weekly tarrifs in high season expected at around 3000 and 1000 in low season.
A Gold Coast Accommodation Market Analysis (12 mths to dec 2004) is available from http://www.gccc.com.au The report details occupancy rates, takings per room/night etc. Coolangatta (reflections) averaged 72% occupancy yearly.
‘One of the strongest trends outlined in a recent report issued by the Australian Bureau of Statistics is the massive trend toward lone person households expected to grow to around 13% by 2026 which equates to just over 3 million people. Currently there are around 9% of households with single occupants (around 1.8 million people.) Not only that but, according to the research, evidence shows that once somebody in their late 30s or in their 40s goes solo, often through divorce, they are likely to remain on their own.’ Source: Michael Yardneys Property Investment Update http://www.metropole.com
‘foundation’ that sounds to me like a lot of potential tenants or purchasers for one bedroom lifestyle apartments.
I hope I have given you some useful information as that was the goal of my original post!
Luke Woollard
Licensee
Pacific Lifestyle Property
http://www.plproperty.com.auLuke,
Your topic “Buying off the plan: general info” suggests a fair discussion on buying off the plan.
But your response to the potential concerns (that I posted to even out the biased ‘benfits’ listed on your link) would indicate that this thread is actually not an invitation for a fair and balanced discussion but simply an opportunity for you to spruik PLP property.
None of my off-the-plan concerns were directed specifically at PLP – though I do find some of the info on the link dubious (most specifically the lifestyle arguements for purchasing holiday letting, as if it is legitimate to purchase an IP for personal use).
The issues I raised are common pitfalls amongst unwitting off-the-plan investors, and therefor they ought to be mentioned as potential threats if we are to have a thread on off-the-plan purchasing.
There are many off-the-plan developers who use agressive marketing techniques to target investors and make it look like their development is of top quality and will gain good returns. These developments occur all around Australia, including the Gold Coast. Many off them are complete rip-offs.
And I know this not just from a few ‘horror’ stories, but because as an investor it is not unusual to look at planned developments in an area before they are built (and hear the marketing spiel) only to return a couple years later and see that the brand new property already has design and building flaws, too many units are trying to sell or sitting untennanted, and the prices have come down. Depreciation schedules that are released with the marketing info are iffy because they list tax deductions as if they were a source of income – which is very confusing to the average punter who would not realise that the depreciation is only gained at tax time and only fully if they have an income in the highest tax bracket.
Luci,
I appreciate you raising potential concerns when buying property off the plan. That’s great for all readers of the forum including me.
As an investor and property professional I rely on published statistics, quality research from Public & Private sectors – not generalised commentary.
Including such information would represent a fair and balanced discussion.
Luke Woollard
Licensee
Pacific Lifestyle Property
http://www.plproperty.com.aucomments made are general information only. you should seek professional advice for your particular circumstances.
As long as the information included is produced by an impartial body.
The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
Essential LinksI suggest posting it all and letting the forum community ‘nut it out’
As an investor, I wouldn’t want to miss valuable information just because it is published by a commercial enterprise.
Luke Woollard
Licensee
Pacific Lifestyle Property
http://www.plproperty.com.aucomments made are general information only. you should seek professional advice for your particular circumstances.
But it is not like you will ever post an adverse article or story about the Gold Coast. It is where you earn your money!
The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
Essential Linkslikely not TMA, but it wouldn’t relate to our business anyhow because we are professional, diligent & trustworthy.
Just like you likely wouldn’t publicise finance scandals that have nothing to do with your business.
Luke Woollard
Licensee
Pacific Lifestyle Property
http://www.plproperty.com.aucomments made are general information only. you should seek professional advice for your particular circumstances.
“I have seen many instances over the years where, purchasers had speculatively bought off the plan and then sold the property prior to settlement becoming due and in the process realising a substantial profit, often with having outlaid very little money because the purchaser has paid his or her 10% deposit by a deposit bond or bank guarantee.”
“Buying Off The Plan”, 10 May 2004
Lou Farinotti
Partner
Holding Redlich LawyersLuke Woollard
Licensee
Pacific Lifestyle Property
http://www.plproperty.com.aucomments made are general information only. you should seek professional advice for your particular circumstances.
Thinking with emotions gets you nowhere you guys. There is always something valuable in everything (almost).
Good post plproperty, although I would personally never buy anything off the plan, some owner occupiers or mum/dad investors may think its a great idea.
plproperty knows there is a market for off the plan buying and is catering to it. How does that differ to all of us renting to people, lease optioning, selling overvalued renovated homes etc.
Why are you guys attacking off the plan buying? How about positive cashflow investing? Getting other people to BUY YOUR property for you and then fund YOUR LIFESTYLE as well. Why is this strategy worshiped on this forum, but selling off the plan is attacked?
The truth is they are both money making ideas, investors will always make money from non investors.
If everyone was a sophisticated investor, property investing could not exist.
I can see a value in pl’s post, in that next time I want to sell newly developed propeties, I may try and sell them off the plan!!!!
We buy properties in all conditions. Can offer Immediate Cash Settlements, No Real Estate Agents Required
[email protected]
phone 0412 437 582
You must be logged in to reply to this topic. If you don't have an account, you can register here.
