BENEFITS OF OFF-PLAN PROPERTY IN LAGOS, NIGERIA
Benefits of buying an off plan property:
Off-plan property purchase means that you are buying into the concept and design of the development with the hopes that the project execution process will be a favorable one and that the end product matches your expectation. You are also trusting that the developer has the values declared or portrayed to deliver on agreed deliverables.
Building a house that can stand the test of time requires great precision and accuracy from top-notch professionals who can be held accountable. The dearth of such professionals and the rigors of building a house from scratch can sometimes be a tall order for an individual. For homebuyers who do not wish to go through the rigors of building from scratch, the off-plan property becomes a preferred option. It offers the opportunity for some personalization while taking away the stress of building by yourself.
According to Wikipedia, Off-plan property is a property before a structure has been constructed upon it. Pre-constructions are usually marketed to real estate developers and to early adopters as developments so that the purchaser can secure more favorable finance terms from their lenders
Property investors or property speculators purchase off-plan property with the aim of making substantial capital gains. This financial return may occur because developers who sell off-plan property often offer financial incentives or discounts to early adopters.
In addition, there may be an opportunity for capital growth in a rising market with a development cycle of typically 12–24 months.
Off-plan property is typically deemed attractive if there is a high level of infrastructure in the immediate area such as a new university or expressed roads, either already built or due to be built within the next few years
One of the perks of subscribing to an off-plan property means that you are buying below the open market rate at which already finished units will be sold for.
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Buying at a lower rate compared to what a finished property will sell for does not mean that substandard materials will be used. It does not also mean that the developer will cut corners.
Since multiple units are developed at the same time, some major costs are spread across the multiple units. This cost spread drives down the cost of a unit by some percentage in comparison to building a single unit.
Buying off-plan can be either extremely lucrative or highly risky. It all hinges on where what, and how you do it. In this article, we’ll discuss all you need to know about off-plan properties in Nigeria, including how to invest for maximum profit, and properties you can buy in Lekki, Lagos.
BUYING OFF-PLAN: WHAT DOES THAT MEAN?
Buying off-plan means committing to purchasing a property before it has been completely built. Both residential and commercial real estate can be bought off-plan.
Often this means making a commitment from project conception i.e., from when the property is just a sketch on paper or a 3d image on a computer. However, this is not always the case as an off-plan property can also be one on its way to being built: maybe the foundation has just been completed or it’s yet to be plastered.
THE BENEFITS OF BUYING OFF-PLAN
The main reason why you should buy off-plan is that it’s cheaper to do so and usually much cheaper. This price discount stems from two places namely:
The risk of purchasing something that has not been completed
The inconvenience of not being able to take possession straight away (i.e. move in immediately)
Potentially having your own input into things such as interior design, kitchen finishing, bathroom tiles, etc.
The earlier you key into a project the better your choices of land plots, units or the best views
Extras can be negotiated into any deal struck e.g. smart home technology
HOW YOU MAKE MONEY INVESTING OFF-PLAN
Buy and hold: the simple way
This method entails a buyer holding onto their investment for the longer term and seeing the discount gained as a bonus: icing on the cake.
This is the only method recommended for those new to investing in real estate. It is simpler, less risky and there are fewer variables to contend with. You simply lock in the discounted price of a property you want to acquire, with a small down payment.
Let’s say you eventually get a 20% off-plan discount. This can be treated as money you can use to invest in something else. Perhaps deposit on another residential development or used for land banking outside the city.
In a rising real estate market such as Abuja, where prices are always going up, price discounts gained can be upwards of 50% by the time construction has actually finished!
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ADVANTAGES OF BUYING OFF-PLAN PROPERTY
In a rapidly rising real estate economics housing market, buying off-plan enables investors and homebuyers to buy a property at a lower price than if they wait for the construction of their chosen property to commence or when it eventually is completed. In addition, buying off-plan may be the only way to get a property with a specific location or set of features as the choice may be limited once construction starts or finishes, other advantages include:
You are able to secure a purchase price below market value.
Great capital growth can be attained.
It gives the ability to resell the property at a profit.
It gives you an opportunity to buy the property with a minimal deposit.
It gives time to plan and save.
Gives investors peace of mind, taking the stress off during a building project.
The property is brand new and fresh.