Any advice – for or against “off-the-plan” properties for investment ?

Hi kwarrior,  in my opinion, off the plan is usually better for investment, especially if the developer give a rental guarantee. Moreover, off the plan gives u opportunity for increasing price as the houses/apartments are being build. Also as u mentioned above u can save on other stuff such as stamp duty.
I have an experience of buying off the plan at Travancore , where my client bought it and 3 weeks later the price has gone up for another 15k, so bassically u have a capital gain of 15k.
i am currently working in an investment company and we are doing property for our investment vehicles, we are stationed in melbourne as well, so if u like to come and consult with us just come by at our office and we'll give you some advice and also show to you some of the good investment in off-the-plan investment

Cheers,
Junius Tjetje

Hi Kwarrior,

I'm personally not a big fan of "off the Plan" purchases as I like to see and touch the final product before putting my hard-earned dollars in such a large investment.

When I inspect properties I like to see to quality of the finished product, how my particular unit compares to the rest of the complex (and how it is comparitively priced), the natural lighting of the unit,  what the common area/shared facilities look like, what's the noise level like (can you hear traffic from nearby road or noise from neighbours)….etc.

Furthermore, I would normally like to see the track record of the Strata Scheme:  are the quarterly fees reasonable,  is there sufficient money put aside for long-term maintenance needs, does the Minutes of Strata meetings indicate problems with the workmanship of the complex?

Yes, you may save on stamp duty and you may purchase the unit cheaper off-the-plan, but the disadvantages/risks I've highlighted above far outweigh the "potential" benefits (there's no guarantee the price you purchase off-the-plan will be lower than the market value especially if the complex turns out to be a botched job so stick to reputable builders if you really have to purchase off-the-plan).

Hope the above gives you some issues/ideas to think about

New houses are definitely the best for depreciation. The best ones are only a few years old or brand new is the key. As the house ages you get less and less you can depreciate.

Off the plan is not necessarily a bad thing. Consider the area. Is there a high rental vacancy? You will need a tenant. What is the area like? You will need a tenant that won't trash your house. Who will build it? Are they reputable or if they are an unknown, find out what else they have built and take a look at it.  What is the socioeconomic area? Will you get the rent you need? Familiarise yourself with the design and find out what project builders are charging for similar designs. If it's good value it's good value. Buying off the plan usually saves you some money. Your profit is made when you buy. Appreciation is a bonus and is no certainty for many years in the current environment.

mug investor