Welcome to the Alibek Issaev property blog. Alibek Issaev has decades of experience in the residential and commercial property invetment industry. In todays post we talk about off-plan property investment. Find out how off-plan property investment gives investors the chance to enjoy a host of benefits, from reduced prices to increased quality.
Off-plan property investment has become a popular option for investors looking to access opportunities in the UK real estate market. In fact, there are buyers who choose to go off plan when looking for a house or flat that will be their primary residency.
The growth of the off-plan property investment market is multi-faceted. For one, the onset of the global financial crisis in 2008 led to many banks and traditional lenders becoming increasingly reticent when deciding whom to loan money to – a trend that has impacted consumers and businesses alike, including construction and development firms. Consequently, at a time when there is a notable need for more properties to be built across the UK, there has been a rise in the number of “investor-funded” or “buyerfunded” developments, where individual or institutional investors take the place of the banks to help in the provision of capital for the completion of a real estate project. And a vast number of investors have been eager to do so.
SUCCEEDING WHEN GOING OFF-PLAN
Increasingly common and established as a popular asset class, off-plan property investment is a part of many people’s financial plans, both in the UK and internationally. But what are the necessary steps to take before making an off-plan property investment? And how can investors find the right opportunity for them?
Alibek Issaev shares these critical questions in Your Guide to Off-Plan Property Investment.
Establishing your goals Before making any investment, property or otherwise, an investor must be clear what their aims are. Do they want to make regular monthly returns or long-term capital growth? Do they want to put their money somewhere it can slowly acquire interest or are they looking to diversify their portfolio?
Choosing the right type of property With the goal – or goals – established, an investor should be clear on the type of real estate asset they are seeking. From a hotel or care home to student accommodation or residential flats, off-plan investments cover virtually every type of property; how appropriate an asset type is will depend on what the investor is looking to achieve. It is important an investor carries out thorough research if he or she is investing in a type of property they have not previously invested in.
Deciding where to buy Location, location, location – regardless of the type of property that one is investing in, its location is of significant importance. When it comes to expected rental yields, ability to find occupants, predicted capital growth and potential ease of resale, the precise location of a property will be vital.
Conducting due diligence on the developers as well as narrowing down the asset type and location of a potential off-plan investment, investors must be careful in choosing which developers they wish to work with.
Typically an investment provider or a sales agent will be responsible for structuring the deal, but investors should conduct due diligence on the firm that is managing and developing the project itself. This process often involves seeing previous projects, including both the plans and the final product, to make sure the business has a proven track record of bringing their designs to fruition. Indeed, looking through the developer’s past portfolio will offer a strong indication of the quality of their builds and offer assurance that the upfront investment will result in a great property. Some firms will allow for investors to visit current construction sites, while it is also common for show homes or flats to be available for investors to visit.
Getting guarantees on the quality of the build If you are buying off-plan on the assumption that the property is going to be of a very high standard – which will, of course, be reflected in the price you pay – then it is vital the finished product meets those standards.
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