Off-plan property investment, to be precise, isn’t for the faint of heart.
Investors of off-plan properties are likely to experience certain risks, especially in a country that doesn’t practice and observe proper regulations.
What is Purchasing Off-Plan Property?
Anytime you invest in an uncompleted development, it’s called purchasing an off-plan property.
For instance, when a Development Company or a developer shows you a work-in-progress, development, 3D rendering, and architectural design.
With a 3D setting, the development company might show you its proposed interior design so that you can decide whether to invest or buy.
According to a reliable source, buying properties off-plan in certain areas in Nigeria is beneficial.
Buying off-plan property involves you purchasing a property and agreeing that from the time of the purchase to a particular time, you’ll own the property.
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Risks Involved
One of the risks posed by investing in an off-plan property is insolvency. If the Development company can’t complete the project according to your agreement, the project may be abandoned or takes too much time.
Another risk is the construction and finishing challenges. If you didn’t specify the quality and class of property you want in the purchase document, you might get inferior quality after the project.
In some cases, the unit size is another risk. It may be that the investor saw the massive or spacious 3D plan.
However, the spaces become smaller than the expected unit sizes at delivery.
Additionally, uninstalled amenities are another risk form especially when buying properties in Nigeria.
For example, a developer may sell the property of a 4-story building with the promise of installing an elevator. However, at the finishing of the property, you will only s a staircase.
Delay in delivery is another factor that poses a risk for buying an off-plan property. As a result, the delivery agreement between the investor and property buyer will linger.
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Benefits of Buying Off-Plan Properties
Buying off-plan properties comes with certain benefits and risks as well. The advantages include; purchasing properties at the current market value.
Also, after the purchase, you will own the property and gain massive returns on investment.
Another benefit is that you can personify and modify the property to your specifications or preference.
In addition, the payment formula is very flexible. You can make the payments gradually to become the owner of the property.
But then, sometimes, the risks involved are higher even as there is a higher return.
The risks involved don’t mean buying off-plan properties isn’t beneficial.