1 June 2015
6 Easy steps to off the plan investment success
Buying Off The Plan
6 easy e-steps to Off the Plan investment success
Off the plan property development is leading a residential
construction revival across Brisbane, as the housing sector
continues to woo increasing numbers of self-funding retirees with
the luring siren song of low interest rates.
OTP property has copped its share of criticism from within and
without the real estate sector. As with any investment bought and
sold as a tradable commodity, this is an area that can be exploited
by those looking to turn a quick buck, and incorrectly adopted as a
retirement strategy by ill-advised, inexperienced investors.
As such, we end up hearing a lot of negatives about OTP
investment, with all developments and developers subsequently
tarred and feathered with the same brush.
Just as some properties make better portfolio acquisitions than
others however, not every OTP property investment is created equal,
with the potential for vast differences in the 'invest-ability' of
So how do you navigate what is seemingly a minefield of
unanswered questions and untouchable developers?
As with all aspects of building a viable retirement portfolio,
the foundation for success is in becoming an educated and empowered
investor, starting with these six easy E-steps.
Are you aware of the many variances in opportunities around OTP
investment and the fact that every project is guided by its own set
of unique fundamentals, including planning regulations, project
design and execution, developer expertise and finance?
These are all aspects of OTP investment that investors would do
well to understand, because when you have greater insight into the
potential upside and downside of any investment, you can assess
whether it will work in your portfolio and the best approach in
making that acquisition.
Speak with advisers who have a demonstrated depth of knowledge
in their market, including a proven relationship with trusted,
local developers who work transparently with all parties to the
If your 'adviser' seems recalcitrant when you request a face to
face with the developer of a product they're recommending, without
any real assessment of its relevance to your specific investment
goals and strategy, it might be time to cut and run.
You need to recognise the difference between a well-rounded
education on which to base your OTP property purchase, as opposed
to a 'hard sell' from self-interested spruikers, who entirely
neglect your personal needs and circumstances.
Once you have a sound understanding of OTP investment and all it
entails, it's time to evaluate this potential addition to your
Will it meet expectations as an acquisition that supports your
overall cashflow and capital growth position, as well as your
personal risk profile as an investor?
Remember, any type of property must tick all the necessary boxes
before you consider buying it for investment purposes. This is
about facts and figures, not warm fuzzy feelings.
Crunch the numbers and then crunch them one more time.
Seek some form of professional counsel when it comes to the
financial and legal aspects of any OTP deal, prior to signing on
the dotted line.
These areas can be problematic when approached without the right
type of understanding. As such, investors risk falling victim to
poorly executed contracts and loan arrangements that simply aren't
up to scratch, in deals designed to line the pockets of faceless,
All property investment is not without its potential issues. For
a start, building a viable retirement portfolio requires a
substantial injection of equity - be it as cash savings or from
within your own home.
Surely therefore, you want to remain in the driver's seat
throughout the asset selection and acquisition process, with the
appropriate guidance from suitably qualified experts as
All too frequently though, investors abdicate control to a slick
salesperson and can end up in messy ownership or finance structures
as a result.
With the right education, you can empower yourself around the
entire OTP process and make informed decisions at each step of the
way, from initial deposit to signing contracts and financing and
settling the transaction.
We introduce our clients to the developers of a prospective OTP
property prior to purchase, and invite them to view a number of
These are, when all is said and done, the people who will
project manage your investment, ensuring completion on time and to
budget. They assume responsibility for a large chunk of your life
savings, so why wouldn't you want to know whom you are entrusting
with such a significant responsibility?
The developer and their past projects are the only real
reflection of a product that you're being asked to purchase sight
unseen. Getting to know their work and approach will give you a
better idea as to what you can expect from your own OTP
The final and most critical step is identifying the perfect
project to align with your needs and objectives as an investor.
Contrary to what mainstream media might suggest with stories
about OTP apartment oversupplies and such, not all of these
investments are stock standard generic monoliths, as explained in
our article,9 of the most common off the plan property
Many boutique developers offer investors the opportunity to
purchase OTP, thereby enjoying significant stamp duty savings and
the rising values of our current fast moving markets, in smaller
scale, landmark developments.
These architect designed medium density projects are becoming
icons of popular inner urban living and challenging misconceptions
around a sub-sector of the residential real estate market that
reflects changing attitudes to how and where Australians choose to
If you would like to know more about the right kind of off the
plan investment for your property portfolio, please
click here to read more.