So you are investing in Liverpool and considering whether or not to buy off plan? What is off-plan property investing? What are the advantages and disadvantages of buying off plan property in Liverpool?
What is buying off plan?
Purchasing a house or flat off-the-plan entails purchasing it before it is built. Buying a property that is in the process of being developed but has not yet been completed is often known as buying ‘off plan’ as well.
Are there a lot of property plans in Liverpool?
Due to below-market purchase prices, outstanding house price rise, and demand for residential and student housing, off-plan properties in Liverpool are considered some of the best in the UK housing market. Purchasing a Liverpool student rental property is one of the best decisions an investor can make if they want to produce the highest yields and the biggest potential growth, especially if they purchase an off-plan property.
One example in Liverpool is ELEMENT – The Quarter, which is an incredible off-plan development. This is Liverpool’s first eco-development, and it’s geared toward young professionals and post-graduate students. Not only is this house expected to have strong rental demand due to its environmentally friendly features, but property prices start at just £74,950, making it a very cheap investment. These low purchase prices are an excellent example of the below-market value prices that can be found with off-plan property investment. Because of the high rental costs, this property has a guaranteed yield of 8%. This off-plan home in Liverpool offers the ideal combination of high rental income and strong capital growth.
The Summit is another wonderful example of off-plan property in Liverpool. This new development is not to be missed if you’re seeking for off-plan property for sale in one of Liverpool’s most popular areas. The Summit, which is in Liverpool’s Baltic Triangle, one of the city’s key buy-to-let areas and a rising hotspot for investors looking for new build houses, offers excellent rental yields of 7% and purchase prices starting at £139,950. The Summit is the ideal type of property to invest in if you’re targeting young professional renters because of its fantastic location and luxurious on-site amenities like a remote working area, on-site gym, and peaceful common rooftop terrace.
Advantages of buying off plan
Possibility of reselling at a profit prior to completion
Investors can choose to list their property for sale and sell at a greater market value because their property is likely to appreciate before completion. Although this can be a viable approach for investors trying to make a quick profit, you would see considerably higher capital growth and enjoy the advantage of a regular rental income in addition to capital growth if you rented the property.
Small deposits and payments in stages
Depending on the developer and the property, some off-plan agreements include the option of making instalments. These payments can help stretch the expense of a purchase and allow investors to buy a home without putting down a substantial down payment.
The purchase price is much lower than the national average
One of the main advantages of buying property off-plan is the ability to negotiate a better deal. This happens a lot because developers want to display a certain number of sales before marketing the development or sell as many units as possible before it’s finished. Some developers provide additional discounts to investors who acquire many properties at the same time.
Disadvantages of buying off plan
- While the value of your new property may increase, keep in mind that it may also decrease.
- Your mortgage may be affected if the value of your home drops.
- Construction delays are normal, and if the hold-up lasts longer than six months, you may need to reapply for a mortgage.
- If your home is one of the first to be built on a huge development, you may have to live on the construction site for months, if not years.
- It can be difficult to imagine what the finished home will look like.
- Because many lenders are hesitant to offer off-plan mortgages, your options will be severely limited.
- You’ll need to find and pay for a place to reside while the house is being built.
- You will forfeit your reservation fee if you change your mind.
- Failure to complete the purchase could result in a lawsuit from the developer, as buyers are legally obligated to complete the transaction regardless of changing circumstances.
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