36
PHUKET PROPERTY GUIDE. Is Off-Plan your plan?
Phuket Property Guide:
Is ‘Off-Plan’ your plan? There is an upside and downside to any financial decision. The upside is obviously the potential gain, while the downside can be either the opportunity cost of taking no action or the risk of making a poor one. In most cases, the risks associated with getting in on the ground floor can be mitigated, reducing the cons and offering a lot more pros. This is definitely the case if you are buying a condominium in Phuket. With new build condos, it may be months, or even years, after signing your purchase agreement until you actually set eyes on your new unit. You will likely get to tour a showroom configured and furnished to look like your new condo, but you will have to base your decision to buy on marketing literature and architectural drawings. That is the reason why, when a development may not even have broken ground, it is called ‘Buying off-plan’ But why are off-plan purchases so popular?
If you view your condo not only as a home, but also as an investment, an off-plan condominium can provide greater capital appreciation thanks to these early bird discounts.
Guaranteed returns It is common for new-build condos to offer attractive guaranteed returns, and for off-plan buyers the developer may even enhance the terms. Typically this is either an enhanced annual yield or an extension of the guaranteed return period (e.g. an extra one or two years).
Payment by installment When buying off-plan you are not always required to pay the full amount upfront. A reservation deposit is standard practice, with a larger payment to follow after a few months. After that, however, payments will only become due following completion of specific stages of the construction. It is not uncommon that your final payment is only due 24 months after signing the purchase agreement. In other words, you may enjoy the benefit of an early bird discount, and still not be asked to pay 100% of the purchase price upfront.
Personalize your condo Buying off-plan often gives you the option of changing certain aspects of your unit before the foundations are even laid.
ESB Professional / SHUTTERSTOCK.COM
It is commonplace that you can personalize your interior, including selecting a suite of furniture to suit your tastes. It may also be possible to voice your preference for the types of finishings and fixtures for the kitchen and bathrooms.
The early bird gets the worm
In short
The early bird gets the worm, as the saying goes. When investing in an off-plan condo, the early birds get first choice on the best units.
When buying off-plan, you sometimes need a bit of foresight and vision. This is especially true if the site has yet to be cleared for construction, and it is difficult to visualize what the development will look like.
The first units to be snapped up are almost always those on the high floors and/or those with sea views. Units overlooking the swimming pool also go quickly. As a foreigner it is especially important to be an early bird because foreign freehold ownership is capped at 49% of the total unit area.
But investors in off-plan condos are driven by the ability to pick and choose the best units, the fact that they are able to personalize their unit, and by the early bird discounts which make off-plan condos more affordable. However, there are risks associated with any investment, and an off-plan Phuket condo is no exception. In order to mitigate any risks, you should always seek competent legal advice before buying a property – especially if that property has not yet been built.
Being among the first to buy these highly prized units means it is easier to resell your condo in the future because the highest demand will always be for the best views.
Off-plan discounts With off-plan condos, early birds actually enjoy two separate worms. They not only get to choose from the best available units, but they are also offered with attractive discounts. If a condo is still in the planning/construction phase, the discounts offered can be too good to ignore. Occasionally there are added incentives like a free upgrade to freehold, or a furniture package at no extra charge.
think4photop / SHUTTERSTOCK.COM
windowonphuket.com
http://www.windowonphuket.com/
window.on.phuket.magazine
https://www.facebook.com/window.on.phuket.magazine https://www.facebook.com/window.on.phuket.magazine
