just chasin ppls experiences plz..good and bad.
also can you only cash in on the equity made during development by completing the purchase?
also can you only cash in on the equity made during development by completing the purchase?
"buying off the plan"
- Thread starter stgeorge5_8
- Start date
Good in a rising market, not good in a bad market. It magnifies gains and losses so in a rising market you really make a lot, and in a bad market you can get killed, more so than if you just bought a normal property.
You don't have to complete the purchase, you can just sell the contract itself before settlement (usually).
Alex
Apart from the possible contruction problems, if on completion date, the bank valuer finds that the property you are buying is worth less than what's on your contract they won't lend you all the money so to be able to settle you will have to come up with some of your hard earned cash.
cheers
cheers
cheers all...can be very risky yet rewarding.
I purchased a 2br apartment off the plan (one of five) in Northcote (Melbourne) in November 2003 for $280k. A week later the Henry Kaye thing imploded and there were proclomations of doom and predictions of massive defaults and price reductions across all off the plan purchases in Melbourne.
The property was completed in June 2005 and was valued at $340k. (admittedly I wrote a report for the valuer with recent sales informaiton, of which there weren't many of that type in the area and some rental information. I think I valued it at $380k.Bit of a bluff
) Of course, I was pretty sure (read positive) that the value of the property when purchased would have been valued at around $320k. When I settled, all additional funds to complete were paid by the loan, as I borrowed 85%+ and covered all remaining costs.
Just do your due diligence like any other purchase.
The property was completed in June 2005 and was valued at $340k. (admittedly I wrote a report for the valuer with recent sales informaiton, of which there weren't many of that type in the area and some rental information. I think I valued it at $380k.Bit of a bluff
) Of course, I was pretty sure (read positive) that the value of the property when purchased would have been valued at around $320k. When I settled, all additional funds to complete were paid by the loan, as I borrowed 85%+ and covered all remaining costs.Just do your due diligence like any other purchase.
