| This is where investors purchase a property that | | | | pay the builders. He can start the project without |
| doesn't exist. | | | | having any money withdrawn from his account! |
| I'm not referring to buying a make-believe property! I | | | | Now, let's look at the same investment from the |
| mean one where you're relying on a development | | | | investor's perspective. |
| company to build the property. | | | | You invest early in property for a hefty 15% discount. |
| How does the process work? | | | | One year later, the price increases by 10%. You wait |
| You may have seen eye-catching brochures for the | | | | another year when the price increases by another |
| development of a fancy new luxury resort. | | | | 10%. If you sell your share in the property, you could |
| You're invited to invest in this property and receive a | | | | end up doubling your money! |
| discount if you do it early. You're told you can sell | | | | So you and the developer both win, right? |
| during construction or after project completion for a | | | | WRONG!Before investing in buying off plan, consider |
| huge profit. | | | | the following: |
| This sounds too good to be true! | | | | - You must sell your apartment or property within a |
| Well, let's look at this from the developer's point of | | | | tight timeframe which requires many buyers and a |
| view. | | | | liquid market |
| The developer has enough money to draft the plans | | | | - You won't receive your money back or a deposit |
| and print enticing advertisements for his proposed | | | | refund if the project fails |
| development. However, he needs a lot of money for | | | | - Prices have to rise quickly for you to make a profit - |
| the land, and his bank requires security. | | | | you'll make nothing if they remain static or rise slowly |
| What does he do? | | | | - The initial valuation of the property must be correct; if |
| He entices people like you to invest early in his | | | | it's overvalued by even 10%, you'll lose money |
| property by offering you a discount. He uses the | | | | - Investing in foreign tourist markets is risky because |
| investors' money to obtain a bank loan for the land. | | | | locals can't afford the resale property |
| Administrative staff then begins collecting more money | | | | Now, you have the true facts. |
| from additional investors. At this point, the developer | | | | Unless you're a developer, stay away from buying off |
| should have sufficient funds to begin construction and | | | | plans! |