As an investor, there are several options that you can choose from.
One of them is off-plan property investment.
This refers to the practice of investing in a project that is still under construction or that has not yet been started but is scheduled to begin and end within a specified period.
It is preferred by some people because it allows you to take advantage and capitalize on a lucrative opportunity of investing in an off-plan property before it becomes saturated by other people.
However, it also comes with the risk of getting duped since it is reliant on future completion of the project. Here are some of the vital things that you ought to take into account to prevent that from happening.
- Legitimacy
The company that you choose to trust with your money should be a legitimate company that is properly registered and abides by the law.
This way if anything goes wrong you can involve the relevant authorities and the matter can be easily solved. Failing to ensure their legitimacy can also get you in trouble if it turns out that they are an illegal organization.
You might be considered an accomplice to their criminal activities. Don’t just trust the information that they provide you with, make sure that you double-check it with the appropriate regulatory bodies.
- Track record
It is better to deal with a company that has done the job before rather than a new one that is doing it for the first time.
The former will give you the opportunity to go through their track record and decide for yourself whether they are trustworthy or not. You will get to know if they always finish the projects or leave some of them halfway.
You will also determine if they finish them within the stipulated period or take longer than stated. All these details will help point out their reputation and whether they are up to the task.
- Suitability
You should compare the cost of the off-plan investment with that of undertaking the project by yourself. At times the cost of the latter might be lower than that of the former and so the latter would be the better investment.
On the other hand, if the cost of the off-plan is way much lower than that of independently undertaking the project then it should serve as a warning to you.
Most of the time fraudsters use such low prices to attract a large number of people then disappear with their money.
- Third-party involvements
It is important to ensure that there are no ties with any third parties as far as the use of the property goes.
For instance, it should not be subject to mortgage as this can later on interfere with the ongoing project. To be sure that there are no third-party involvements you will have to do a thorough background check that will require the company’s cooperation too.
This is also a good chance to see if they are transparent or are withholding information.
- Contract
It is obvious that such an agreement requires the parties involved to sign a contract. This is good as it ensures that the agreement is upheld and any party that violates the terms is brought to justice.
Still, you have to be very careful when signing to avoid being a victim of the loopholes that might be in the document. For example, make sure that the company is the rightful owner of the property instead of the buyer in the ongoing buying process.
The property should also be properly registered according to the use. One that is registered for agricultural use should not be used for residential projects.
Conclusion
The term off-plan property investment refers to the act of investing in a project that is incomplete but is ongoing or the plans to begin are underway. For example, one might decide to finance the construction of a restaurant to take advantage of the high returns that a restaurant attracts in a certain area.
The major risk that comes with it is that the company might fail to finish the development thus messing up your investment. You have to carefully assess the company before you can trust them. It is also good to have a legal representative who can help you make the right decisions.