Why off-plan, and seven questions I ask before I say yes

Off-plan means you buy before the building exists. You pay in stages, you wait for the community to form, and at the end you decide whether to hold or sell. It can work very well. It can also go wrong for the wrong buyer.

Who it suits

Off-plan suits a patient buyer who can keep paying through construction and who does not need the money back soon. It does not suit someone who may need the money in a year. That is why I think in seven-year arcs: building, settling, then a clear look at what to do next.

The seven questions

• 1. Who is the developer? Look at what they have already delivered, and whether it was on time and as promised.
• 2. Where do my payments go? Payments should go into the project's escrow account, never to a personal account. Ask to see it in writing.
• 3. What does the contract say? Have the sale and purchase agreement read by someone qualified before you sign, including the handover date and what happens if it is late.
• 4. Does the payment plan fit my cash flow? A smaller payment during construction means a larger one at handover. Be sure you can fund both. I wrote about this in the payment plan article.
• 5. What do similar homes cost today? Compare the launch price with ready properties nearby and their rents. If the price is far above, ask why.
• 6. What will it cost to own? Service charges and fees change your real return.
• 7. Who will buy or rent it from me? Picture the future tenant or buyer, and what they will want in seven years.

The honest answer

Sometimes the honest answer is to wait, or to choose a different project, or not to buy at all. I would rather lose a sale than send you into a decision you will not be at peace with.

Off-plan is the only thing I do myself, and the purchase is completed through Imperial Pacific Real Estate L.L.C. If you are thinking about it, speak to me before you decide.

Prices and plans change by project. Figures and rules here are general and need confirming for your purchase.