There are many investment options in Southeast Asia these days. Real estate is a popular choice but many wonder if buying an off-plan condominium unit is a good investment. After all, you won’t be able to see the finished product for years and it can be difficult to check up on it while construction is underway.
You have worked hard for your money, so you don’t want to see it go towards something that never gets finished. On the other hand, it’s vital that your savings is working to earn you even more money. All investment is risky, so if you’re looking for a sure thing, good luck and let us know if you find it.
If you want an investment that offers both value and potential, buying an off-plan condominium may be for you. They can be significantly cheaper than purchasing completed units and you will enjoy appreciation on it sooner thanks to soaring land prices in many major cities across the region. In many cases, it is better to buy now than waiting for a project you like to be finished.
That being said, buying off-plan condominiums does involve a greater risk than already completed units. Here are a few of the risks buying off-plan condominiums carry and what you can do to navigate these possible pratfalls.
Condominium isn’t completed or completed late
The most daunting concern a person has about investing in buying off-plan condominiums is that it won’t be completed. This is the worst-case scenario since it means you will end up spending years in the courts fighting with the developer to get your investment back. Another worry is possible setbacks in construction which can delay rental returns should you plan on renting the unit out.
How to avoid this: Don’t buy from developers who haven’t demonstrated past success in completing developments. Instead, choose only reputable homebuilders who have large portfolios.
They also send out regular updates on how the project is progressing, usually with photos and other information. This provides you with peace of mind about investing in a buying off-plan condominium unit.
Condominium won’t look the way it does in the pictures
Many investors thinking about buying off-plan condominiums utilize sales materials and marketing photos to get an idea of what the condominium they are buying will look like. However, these are simply photos and what you see here may not be what you get when the project is finished.
How to avoid this: There is no way of truly knowing how a project will look when it is finished, but there are a couple of things you can do to help inform your decision. The first is to go online and look for photos of condominiums already completed by the developer. While artist renderings can deceive, seeing the real deal will give you a better idea of the quality the firm delivers.
If possible, you can also schedule to see a unit for sale at one of the developer’s already finished condominiums. While the layout may be different, chances are the unit size will be similar. Investigate how it looks and then compare it with marketing brochures that are likely to include graphic renderings. You’ll be able to see how close the developer comes to matching it.
You won’t get the unit you want
While units in off-plan condominiums are almost always available on a first-come, first-serve basis, this doesn’t mean you will get the one you want. This is especially true for presales periods where a limited number of units are available for extremely attractive promo prices. Once these are gone, the sales team then tries to promote units at more expensive prices even if the cheaper ones are still being advertised.
How to avoid this:
If you know the project you’re interested in, you can always check it out on Dot Property. Each condominium has its own page where you can see the units currently for sale and what the asking price is. You can then enquire for that unit directly. When the seller contacts you, they will respond with information about that specific unit.
Interested in investing in a buying off-plan condominium in Southeast Asia? Click here to start your search today!