Buying off the plan? read our checklist before you do

  1.  Resale Value - resale values might be less than predicted at time of purchase. It is prudent to find comparable sales data within and outside of the targeted development to ensure the stated value is legitimate.
  2. Location. Is it within 15 kilometres of the central business district? It is near transport, amenities?
  3. Research - make sure the deal stacks up on future capital returns. Research the quality of the apartment and find out what has been happening to property prices in the same postcode. What is its record for investment returns and capital growth? Will you be able to find a tenant?"
  4. Changes to plans. Consider any terms in the contract that may allow the developer to change the original plan. Changes to buildings are often needed during construction but make sure they are fair and reasonable. It's best to have an experienced lawyer check the contract. 
  5. Builder reputation. Check the builder's record of completed project and quality finishes, and whether the builder and developer are insured for losses and delays. Does the project have development and certification approval?
  6. The quality of finish. Better quality fixtures might have been used in the display apartment or house.
  7. Management contracts. Prospective buyers are entitled to inspect contracts between owners corporation and caretakers/building managers. What are you financially responsible for?  
  8. % of owner occupier vs investor. Does your apartment have a large percentage of owner-occupiers? How much competition will there be for tenants? 
  9. Exclusive use. Check the developer has not registered by-laws giving exclusive use of desirable parts of common property, such as the roof, to owners of certain lots. If so, what are the terms and conditions?
  10. Rental yield vs the prospects for capital growth. Low rental income might be offset by strong capital gains. The right mix will ensure a successful investment.
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