Buying an investment property off the plan

Less than 10% of Australians invest in property as well as their own home, but for many, it can be an attractive investment option.
Buying off the plan requires knowledge that we supply you with at Active Consulting.
There is both risk and reward in this kind of property investment – it helps to have an expert guide you.
Active Consulting can help you find the right property at the right price, then organise finance, conveyancing, insurance, depreciation schedules, tax specialists and tenants and a property manager.

Buying an investment property off the plan

Less than 10% of Australians invest in property in addition to their own home.
Buying off the plan requires knowledge that we supply you with at Active Consulting.
There is both risk and reward in this kind of property investment – it helps to have an expert guide you.
Active Consulting can help you find the right property at the right price, then organise finance, conveyancing, insurance, depreciation schedules, tax specialists and tenants and a property manager.

There is plenty of potential upside to this type of property investment. But it is not one we would recommend without first going through our EARN process.

Many of our clients have an interest in using property to improve their financial positions but simply don’t know where to start. Our evidence-based system informs and educates our clients on what service providers are in the market place, ensuring they get the best independent advice possible.

Four step process

We’ve developed a clear and practical four step process that we call EARN. It provides the information and the insights to help you on the path to both debt reduction and wealth creation.

The 4 steps are:

Evaluate

Analyse

Refine

Nurture

Astute buying “off the plan” has helped many of our clients build a real estate investment portfolio. But it is not for the impulsive, the financially illiterate or the uninitiated. Active Consulting informs our clients of all the opportunities and the pitfalls in this type of investment, so they can make an educated decision relative to their own financial circumstances.

Buying “off the plan” explained

This is when you contract to buy an apartment that is yet to be built. As such, much of your decision is based on a developer’s plans and computer rendered impressions of how the apartment will look.

You agree on a purchase price and usually only need a small deposit. In theory, property prices generally increase while the developer builds the apartment.

But that’s not the only advantage.

Stamp duty discounts

You could save on stamp duty, as most states offer discounts on newly constructed properties and, if a buyer signs a contract before construction begins, stamp duty will only apply to the land value, not the finished product(i).

It buys you time

You’ll generally only need a 10% deposit and can use the extended construction time to save up the outstanding balance or use the money for other investment purposes.

Tax benefits

As an investor, if you plan to lease out the apartment, buying a brand new property “off the plan” allows you to maximise the tax deductions available to you via depreciation.*

What are the risks?

Without expert guidance a buyer could agree to pay more for a property than it is worth. Buying in the right Hotspot areas where you have information about supply and demand can alleviate this risk.

The developer’s reputation

In addition to knowing how to research the current market conditions, investors need to do their due diligence on the developer before they sign up. Active consulting educates and informs our clients so they know to verify evidence of past projects and, whenever possible, to visit previous projects to assess the quality of the developer’s work. You can also do a credit check on the developer’s (and the builder’s) financial position.

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You should assess whether the information on this website is appropriate to your particular investment objectives, financial situation and investment needs. You should do this before making an investment decision on the basis of the information on this website. You can either make this assessment yourself or seek the assistance of any adviser.