BLOG
4 Great Reasons To Buy A Home Off-Plan
Buying a home off-plan has a number of benefits for both first-time buyers and investors. For first-time buyers, it’s a chance to enter the property market without significant strings attached as there is no transfer duty from a prior owner, and the VAT is already included in the purchase price. In the same breath, investors can also save on these costs and be able to rent out the property once built to generate an income.
However, these are not the only benefits to come from buying off-plan, there are many more reasons why buying your first or next property off-plan is a good idea.
1. Brand New, Tailored For You
When buying off-plan, you won’t be able to take a physical walk-through of your future home but this should not be a hindrance! Firstly, by not having an already-built property to view, you will be able to tailor your new home to your exact specifications with some input into the layout and finishes, and you’ll get to experience a home that has never been lived in. Secondly, with impressive technology like 3D renders, virtual tours and augmented reality, you’ll be able to get a great idea of what your new home will look like before it’s built.
2. Worth More Than You Paid For
A very appealing benefit for buying off-plan is that this type of property usually sells at a more reduced price compared to if it were sold once built. Moreover, as construction normally takes between 12 and 24 months from purchase to occupation date, your new home or apartment could potentially be worth 10% more than what you paid for it.
Time could be your biggest advantage if you wish to resell once the building is completed. However, this price increase is dependent on a few factors that include the area it was built in, type of property, size of the home, as well as the supply and demand levels of the market.
3. Easier To Secure A Bond
Off-plan properties for sale are usually situated in a new development, which are always pre-approved for purchase by the major financial institutions. This means that securing a bond for your new home is that much easier.
If you have already taken the necessary steps to get pre-qualified for a home loan, you will then be in an even better position to get your home financed and be able to purchase your property that much faster.
4. Lower Interest Rates
The South African Reserve Bank has further reduced the repo rate from 4.25% to 3.75%, resulting in a prime lending rate of 7.25%. With the new interest rate being the lowest it’s ever been in the last 47 years, many South Africans are currently considering buying over renting – and what better way to use this opportunity than to purchase your dream home off-plan.
But, before you decide on a property price range, you will need to assess your long term affordability. Don’t enter into a home loan that you might not be able to afford if the interest rate increases. Make sure to include the levy, rates, taxes and utility amounts into your calculations.
Don’t Forget To Read The Ts&Cs
It’s important to be informed of your purchasing rights before you buy an off-plan property. Here are a few things to look out for and action before signing:
- Check the specifications regarding the completion and transfer dates to ensure you will not be liable for any occupational rent.
- Inspect the property once built, with a representative from the development, before transferring the home into your name.
- If anything is hugely amiss, you will be protected by the Consumer Protection Act. For smaller snags, a structural guarantee will apply.
All in all, buying a property off-plan provides various benefits not only financially, but also the opportunity to own your dream home.
References:
1.“Why buying off-plan is a good plan!” Mortgage Max (email), 18 May 2020.
2. “How to buy property off-plan: what you save and need to know” Property24 (blog), 28 December 2018, https://www.property24.com/articles/how-to-buy-property-off-plan-what-you-save-and-need-to-know/28088
NEW WAYS TO KEEP WARM AND ENJOY YOUR CAFFEINE FIX.
Buying a home off-plan has a number of benefits for both first-time buyers and investors. For first-time buyers, it’s a chance to enter the property market without significant strings attached as there is no transfer duty from a prior owner, and the VAT is already included in the purchase price. In the same breath, investors can also save on these costs and be able to rent out the property once built to generate an income.
However, these are not the only benefits to come from buying off-plan, there are many more reasons why buying your first or next property off-plan is a good idea.
1. Brand New, Tailored For You
When buying off-plan, you won’t be able to take a physical walk-through of your future home but this should not be a hindrance! Firstly, by not having an already-built property to view, you will be able to tailor your new home to your exact specifications with some input into the layout and finishes, and you’ll get to experience a home that has never been lived in. Secondly, with impressive technology like 3D renders, virtual tours and augmented reality, you’ll be able to get a great idea of what your new home will look like before it’s built.
2. Worth More Than You Paid For
A very appealing benefit for buying off-plan is that this type of property usually sells at a more reduced price compared to if it were sold once built. Moreover, as construction normally takes between 12 and 24 months from purchase to occupation date, your new home or apartment could potentially be worth 10% more than what you paid for it.
Time could be your biggest advantage if you wish to resell once the building is completed. However, this price increase is dependent on a few factors that include the area it was built in, type of property, size of the home, as well as the supply and demand levels of the market.
3. Easier To Secure A Bond
Off-plan properties for sale are usually situated in a new development, which are always pre-approved for purchase by the major financial institutions. This means that securing a bond for your new home is that much easier.
If you have already taken the necessary steps to get pre-qualified for a home loan, you will then be in an even better position to get your home financed and be able to purchase your property that much faster.
4. Lower Interest Rates
The South African Reserve Bank has further reduced the repo rate from 4.25% to 3.75%, resulting in a prime lending rate of 7.25%. With the new interest rate being the lowest it’s ever been in the last 47 years, many South Africans are currently considering buying over renting – and what better way to use this opportunity than to purchase your dream home off-plan.
But, before you decide on a property price range, you will need to assess your long term affordability. Don’t enter into a home loan that you might not be able to afford if the interest rate increases. Make sure to include the levy, rates, taxes and utility amounts into your calculations.
Don’t Forget To Read The Ts&Cs
It’s important to be informed of your purchasing rights before you buy an off-plan property. Here are a few things to look out for and action before signing:
- Check the specifications regarding the completion and transfer dates to ensure you will not be liable for any occupational rent.
- Inspect the property once built, with a representative from the development, before transferring the home into your name.
- If anything is hugely amiss, you will be protected by the Consumer Protection Act. For smaller snags, a structural guarantee will apply.
All in all, buying a property off-plan provides various benefits not only financially, but also the opportunity to own your dream home.
References:
1.“Why buying off-plan is a good plan!” Mortgage Max (email), 18 May 2020.
2. “How to buy property off-plan: what you save and need to know” Property24 (blog), 28 December 2018, https://www.property24.com/articles/how-to-buy-property-off-plan-what-you-save-and-need-to-know/28088
