Many local and foreign investors in Thailand make the decision to buy property off-the-plan. Buying off the plan means buying a condominium unit or a house/villa before the condominium building or development has been built. The majority of large condominium and villa developments sell property this way. You will often find they enjoy boasting about how quickly they sold their properties before even breaking ground. Off the plan buying allows you the advantage of buying the most futuristic modern property at current market prices. This can provide extremely profitable benefits and capital gains for you in the rising property market.
Buying off the plan has increased in popularity over the past decade because the developers are more secure, supplying only according to property demand. Developers also have the advantage of being able to use the deposit from off the plan buyers to fund the construction instead of relying solely on finance backings and loans.
Benefits of buying off-the-plan
- Payment schedules are long giving you time to secure funds
- Customization you can have a say in the building process (choose materials for floors, interiors, community utilities etc.)
- You can start to market the property for a re-sale or rental while still during construction
- You can sell the property for huge profits
- Brand new homes cost less to maintain
Risks of buying off-the-plan
- You may be expected to pay a large percentage of the property price before you are given legal transfer of the property.
- If the developer suffers financial problems the construction may be delayed or halted altogether pending funds from additional loans or more off-the-plan buyers
- Without proper insurance, the developer and buyer can suffer if the property/land is damaged during construction
Avoid the Risks! Make sure you have a good lawyer to assist you in the entire process who can confirm the legitimacy of all of the developers land ownership title deeds, building construction contracts and permits
In addition, do not sign a contract until you have seen the site first-hand and acquired correct insurance/protection/compensation for delays that may come in delivering the finished property.
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