All Topics / General Property / Buying Off The Plan

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  • Profile photo of glynntglynnt
    Member
    @glynnt
    Join Date: 2009
    Post Count: 10
    June 24, 2009 - 9:42 am

    Hi All,

    just wanted to get some feed back on buying off the plan in growth areas like Frankston, Mornington and Mount Martha if anybody can help.

    the research i have done with some property is they are reasonably well priced and with stamp duty off it's a ok deal. 3 bed, 2 bath, 2 car garage, very good builders – $385k in Mount Martha and rental return of $340 per week.

    Any thoughts??

    Thanks

    Glynn  

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    June 25, 2009 - 7:40 am

    can be risky.

     – you may qualify for a loan now, but changing circumstances may mean you won't qualify when it counts.
    – properties can also drop in value/
    – opportunity cost. You could be tied up with this and miss out on other opportunites that come up.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of FinSpecFinSpec
    Member
    @finspec
    Join Date: 2009
    Post Count: 137
    July 1, 2009 - 7:10 am

    I always tell people that buying off the plan isn't that much different from buying new as far as value is concerned.  You want to look at the price as if you were buying it today, and compare it on that basis.  The fact that you may not have to pay for it for a while is just a bonus.

    eg:
    If similar properties are selling for $350k, you have to ask yourself, what is the premium for?
    If similar properties are selling for $400k – again ask why.

    Terry is spot on with the lending risks, I've seen it happen quite a few things when things change between exchange and settlement.  One thing that is affecting people at the moment is they bought off the plan two years ago expecting to get a 97% loan, and have not saved sufficient of a deposit to get it over the line if they no longer qualify for a high LVR.

    So the answer?  It can be good, but be very careful, and just like everything else, research research research.

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