When it comes to purchasing a property, one of the key decisions to make is whether to buy off the plan or an existing standing property. Let’s break down the pros and cons of each option to help you make an informed choice.
When deciding between buying off the plan or an existing standing property, it’s essential to weigh the advantages and disadvantages of each option carefully. Buying off the plan offers the benefit of securing a property at an agreed price now for completion at a future date, potentially allowing you to customise certain aspects of the property. However, this comes with the risk of the final product not meeting your expectations and uncertainties like construction delays or market changes. Delays in construction or changes in the market can also impact the final valuation of the property.
Off the plan
Buying a property off the plan can be an exciting venture, but like any investment, it comes with its own set of pros and cons. Let’s take a closer look at five advantages and five disadvantages of buying off the plan:
Pros:
- Customisation: Purchasing off the plan allows you to personalise your future home with selected finishes and fixtures.
- Potential Capital Growth: As the property market evolves, there is a chance for your off plan property to increase in value before completion.
- New Builds: Enjoy the benefits of a brand new property with modern amenities.
- Deposit Flexibility: Paying a deposit upfront and the balance upon completion can provide financial flexibility.
- Stamp Duty Savings: In some regions like NSW, buying off the plan may offer stamp duty concessions or savings (check out our grants blog article here).
Cons:
- Construction Delays: Projects can encounter unforeseen delays, pushing back the settlement date.
- Changes in Market Value: The property market can fluctuate, affecting the future value of your property.
- Developer Risk: There is a level of uncertainty about the developer’s reputation, financial stability, or the final product quality.
- Lack of Certainty: Floor plans and finishes may differ slightly from what was initially promised.
- No Cooling Off Period: Often there are no cooling off periods for an off the plan purchase.
When considering buying a property off the plan, weigh these factors carefully to determine if it aligns with your financial goals and lifestyle preferences.
Existing properties
On the other hand, buying an existing standing property allows you to see exactly what you are getting before making a purchase. You can inspect the property, get a feel for the neighborhood, and make a decision based on what you see. This can provide more certainty compared to buying off the plan. However, existing properties may come with hidden maintenance issues or the need for renovations, which can add to the overall cost.
Buying an existing property can be a significant decision, with its own set of advantages and disadvantages. Let’s delve into some pros and cons to help you make an informed choice:
Pros:
- Immediate Availability: You can move in more quickly to an existing property compared to building a new one, saving you time and hassle.
- What you see is what you get: Provided you have conducted you due diligence properly, there is a low risk of any unexpected surprises.
- Established Neighbourhood: Existing properties are situated in established neighbourhoods with a sense of community and history.
- Negotiation Power: When buying an existing property, there is often room for negotiation on price and terms, giving you a chance to secure a good price.
Cons:
- Maintenance Issues: Older properties may require more maintenance and repairs, leading to additional costs over time.
- Limited Customisation: Existing properties may not fully meet your preferences or needs, requiring compromises on layout or design.
- Hidden Problems: There may be hidden issues in an existing property, such as structural problems or pest infestations, which could be costly to address.
There are many considerations to take on board when purchasing a property, we have merely outlined a few of each to help steer you on the right path property ownership. It is recommended to consider all factors carefully when deciding whether to buy a property, weighing the pros and cons to find the best fit for your needs, lifestyle and future goals.
This article provides general information only and should not be construed as legal advice. The content aims to offer a broad understanding of the topic and should not be assumed to be applicable to your individual circumstances. Should you require our assistance please contact us here.