Investors seeking a high return and favourable yields on their property portfolio are increasingly turning to off-plan investments. Extremely positive benefits come from buying property while it is in the process of being constructed. Investing early means getting in on the ground floor of brand new developments while prices are still favourable, and off-plan property investments can often bring very high equity gains and good rental yields.
Here are some things to know when investing in off-plan property.
Where the property is located will be a primary consideration for buying property off-plan. With an increase in demand for city properties many UK markets present prime opportunities for investing in buy-to-let homes. Especially for those with the money and foresight to make an informed and potentially lucrative investment.
Cities like Birmingham, Manchester and Liverpool are on the rise with the construction of high-rise and urban developments increasing, making them key areas to benefit from the ‘Regeneration Effect’ ( a 4.7% house price uplift per annum). According to recent studies, demand for homes is set to continue in certain areas of the country as those with a strong urban core attract young professionals and those seeking a city dwelling.
Identifying the best locations to invest in off-plan property can be determined by working with an experienced investment consultant who can guide and recommend appropriate off-plan investments.
You may have heard some Off-Plan horror stories about historic developments and building projects that haven’t gone to plan. Building works have stalled and been left incomplete due to a lack of financial resources or running into regulatory issues, and have left many investors out of pocket.
Redmayne Smith safeguards our investors from such scenarios. Our thorough, 31-part due diligence process ensures that every investment property is stringently checked before we recommend it as part of your investment portfolio. We ensure that all off-plan developments are in line with regulations and have the financial backing needed to achieve completion means we can recommend the best places to invest for our clients. We only offer fully-funded developments to our investors, where your deposit is protected in a client account or fully insured. We also thoroughly research the local area comparables in terms of rental/ SA income and property prices, as well as developer history, to determine that they can be trusted. The off-plan and ready-to-rent properties have the best chance of achieving a positive return on investment because we wouldn’t recommend them unless we would be willing to invest ourselves.
Along with location, the type of property to invest in should also be assessed carefully. Many new off-plan developments offer investors the chance to choose from an array of homes and units. Getting in early means that there is usually a wide range of availability when it comes to off-plan property.
Size and location are factors, and not just within the city; the placement of the units within the development can also affect things like the profitability and margin of rental yields. For example, high-level apartments with stunning views across the urban core can fetch a higher rent than those situated on a lower level. The same applies to unit size, with 2 and 3-bed units commanding higher rents than a studio or a 1-bedroom home. Recent evidence shows a preference towards one and two-bedroom flats, perhaps reflecting a desire for lower energy prices.
Determining the best city, location, development and property sizes to add to your property portfolio will help when planning an investment strategy. Whatever property is invested in, it will need to provide yields and equity that align with your financial goals.
Working with Redmayne Smith provides support and advice with a trusted team that will guide you through all investment decisions. With over 50 years of property investment experience, our goal is to help you maximise your ROI and make good choices. Our extensive knowledge and experience in the industry include the creation and management of personal multi-million property portfolios, so you can guarantee that we practise what we preach.
Investing in off-plan property is a golden opportunity for investors to acquire units and dwellings before sales prices rise. It also means gaining property in sought-after locations that can be rented or resold quickly. Many investors that invest early in off-plan property experience high equity gains as completed construction projects increase in value, and high demand pushes up rent yields in high demand developments.
Browse our current developments and start your off-plan investment journey today.