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Insight & Opinion

How to minimise risk in off-plan property investment

Author: Gemma





Off-plan property investment – whereby you acquire the asset during the construction process or before building work has even begun – can be highly profitable. Buying early often allows you to secure a lower entry price, increasing your scope for long-term capital growth.

There are many potential benefits to gain from this approach, but there are also certain risks to be aware of.

If off-plan investment is something you’re considering, it’s wise to think about how you can give yourself maximum protection against risk.

Use a trusted, reputable developer

One of the most common concerns off-plan property investors have is that the developer will go bankrupt or cease trading before construction has been completed, leaving them in a situation where they have invested in an asset that will never materialise.

A good way to minimise this risk is by working with a well-established, reputable company with a strong track record of delivering this type of property many times before.

Experienced developers will closely monitor build costs and ensure that budgets are adhered to, keeping financial risk to a minimum.

Get regular updates

Getting as much information as possible about how development work is progressing can help to put your mind at rest and give you a clear idea of when the project is likely to be completed.

Project managers and architects might be able to give these updates, but it’s also possible to use an independent monitoring service to keep an eye on things like cost management.

Research your asset class and location

You can give yourself maximum confidence that your off-plan property investment will come to fruition and deliver returns by doing plenty of research on the asset class and the location where you’re investing.

Buying in a sector that has established a reputation for growth and profitability – like purpose-built student accommodation – can mitigate the risk of the property value decreasing after you’ve committed to the purchase.

You can further boost your chances of seeing returns by investing in a well-established or fast-growing destination, which could be anything from the London commuter belt to a thriving student city like Liverpool or Newcastle.

Learn more about off-plan property investment and how to benefit from it by speaking to Experience Invest today.

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