Dear All,
We met up with one of the Consultants from an investment company and we are interested (keen)to invest in their project ie bought from the plan. We only need to come up with 10% deposit of the purchase price and the settlement is say 2 years later. (depend on the project)
https://www.propertyinvesting.com/forums/property-investing/help-needed/4322369 –> with the introduction of gov't lowering levies on property developers/builders, how is this impact investor like us ? does this only affect NSW ? what about Vic ? This is not for all the state in Aust? Shall we wait and see what happen? Are we expect the buy cheaper now ?
Greatly appreciate your valuable feedback and sharing pertaining to this concept of buying from the plan and sell off before the settlement date ? ie try to capitalize some profit at short term. The project that we are interested are those blue chip properties, great location and also lifestyle project.
Thanks all for your kind attention.
Cheers !
MingThe upside is that in a rising market you may be able to onsell the property before settlement and make a profit without outlaying too much money.
This is one of the sales pitches used by these companies, and they make it sound very good.
But keep your eyes open;
what if the market doesn't keep going up?
Will you be able to onsell the property before settlement?
If the market stays flat, or worse; goes backwards before settlement and you can't onsell the property for a profit, or at all – will you be able to arrange finance to settle on the property?TheGovt levy on developers may or may not do anything; in my opinion the developers will try to pocket the discount, and if by some miracle it gets passed onto home buyers, this will simply fuel a new demand as there will be people entering the market who were previously priced out. This will cause a new price rise probably.
Do your research on the markets and find out if the likelihood of the prices continuing to rise is there.
Hi Ming,
I agree with Marc's summation. What you're proposing is speculation, not investment.
If you really want undertake this I would strongly advise that you 1. undertake research to ascertain the likelihood of prices continuing to rise. 2. are financially capable of settling if you can't on sell.
Remember if you do on sell you will have to take into account legals and stamp duty on the purchase and commission and legals on the sale. This will dilute your profit.
Also if you are paying over the odds now or the market dips, the valuation on settlement might be less than the purchase price and the financier will only base their LVR on the lesser amount, leaving you to tip in more equity than you were expecting.
How much other property is being developed and will hit the market before yours or at the same time? what are other sales like in the area? You can make a lot or you can lose a lot.
Some people did great doing this at the beginning of the last boom. Then as people saw them making money they started going in. The more cautious waited longer until they were sure it worked and then they bought in. These were the ones who were hurt the most.
Then a year later when the places were built they came to me asking for finance on a property worth less than the amount they needed to scrape together to settle with.
The people who made the most were the developers and so many shonky companies started up and dissappeared.
Please be very very very careful.
Don't use any of the companies experts. Use your own solicitor, valuer and mortgage broker. Use clauses in your contracts. I have seen a lot of hurt suffered by people believing in salesmen. They don't even sell properties. They sell you a dream. I bet their presentations include pictures of nice cars, happy families, fancy homes and holidays. That is what they try to sell to you.
I wouldn't do it myself. I think something I see over and over again from new investors is that they search the internet looking for fast ways to make money. They really believe that they exist.
I can tell anyone here how to make a lot of money through investing in a number of ways. None of them are fast.
Please be careful.
Dear All,
Really appreciate indeed for your valuable sharing. Those blue chip properties are units/apt and we are looking at at least 0.5M for 2 bedroom apartment (no water related ) in raising/merging market at city. We have this professional consultant to look into our investment portfolio and advise us this strategy. We do not have unit/apt under our portfolio. We are extremely conservative in our investment and yet to breakthrough our mindset of investing in units. We are very concern of outgoing cost especially the strata/corp cost. We are not living in Aust to feel the market sentiment and also lost touch with local demand. The only source of info that we try to get/research is from this forum (thanks for the generous contribution, it is excellent !!! )and Realestate web site.
According to this professional consultant, the CG is higher in those blue chip properties compare to sane value of land+house properties say 20-30km of city. We are caught in the situation whether to bit the bullet and go ahead to invest as they are professional in this line and they should know what they are recommending their client. Are we too scare to take out the risk and try out the new strategy ? shall we take a step to breakthrough our mindset and try something different ?
We lost 5K in our deposit when we booked a 1 bedroom apt at dockland last year. We lost our deposit due to we chose not to proceed our purchase. We still remember our tuition fee for this lesson.
Now, We are still debating with ourselves whether 'go' or 'no go' for unit/apt investment esp buy off the plan. We went for another marketing talk this afternoon, again they are selling buy off plan units/apt…not sure why they are promoting this beside
1. low cash involve ie 10-15%
2. no stamp duty
3. good depreciate in view of tax claimIt is a tough decision to proceed especially we are not experience and too scare to lose our hard earn $$. (yet we want to grow our portfolio.)
thanks all for your kind attention again.
Cheers !
MingIf you had asked me two years ago about buying off the plan I would have said no. However the market is currently strong and it is likely that anything you buy today will go up. Provided that the project has bank valuations based on todays prices. Only buy if you are looking to buy long term. Then if it goes up it is an benefit.
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
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Bob Andersen said,
What you're proposing is speculation, not investment.This is quite correct, in my opinion, there is a huge difference between speculation and Investment. I notice that many people on this site get the two mixed up. Buying off the plan with the intent to sell either prior to or just after settlement requires a lot of research. I have seen people make a lot of money and also loose a lot of money speculating this way.
Be very carefull and for goodness sake don't listen to anyone who is likely to gain from the sale. Get indipendant advice.
Jon
Dear LA Aussie, Bob Andersen, crj,Mortgage Hunter,Nigel Kibel, Jon and others.
Thank you very much indeed for your time and valuable sharing, we will definitely think about it again. So far we have not sign any contract yet but have a few blue chip projects (including Malaysia, Bangkok and Vietnam ) to consider. (of course this include Australia which is my preference).
With appreciation,
Ming
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