Are Off-Plan Projects the Best Real Estate Investment Option?
Introduction
When it comes to real estate investment options, off-plan projects have gained considerable attention. But are they the best choice? In this article, we will evaluate the pros and cons of buying property off-plan, where a buyer purchases a property yet to be constructed. While this route of property ownership can be considered risky, it has proven to be highly rewarding for many. Before investing in an off-plan project, weigh the following advantages and disadvantages.
Pros of Buying Off-Plan In Kenya
1. Getting the First Pick
One of the significant advantages of investing in an off-plan project is the opportunity to choose the best floors and locations with the most favorable views. Since few people have committed to the project at this early stage, you have the liberty to select higher or lower floors based on your preferences.
2. Access to the Best Price
Properties are generally cheaper during the groundbreaking stage compared to when the project is fully complete. By investing off-plan, you can secure the property at a more favorable price point, potentially maximizing your returns in the future.
3. Customization Options
During the construction period, you have the unique advantage of customizing your apartment to fit your specific needs. This flexibility allows you to alter the layout or make certain modifications that align with your preferences, creating a personalized living space.
4. Flexible Payment Plans
Off-plan projects often offer flexible payment plans, allowing you to pay in installments throughout the construction period after an initial deposit, usually around 20%. This payment structure can provide financial convenience and make the investment more accessible to a wider range of buyers.
5. Potential for High Appreciation
Investing in off-plan projects can potentially yield a high appreciation rate. As the project progresses from the groundbreaking phase to completion, the property’s value tends to increase. By acquiring the property at an early stage, you stand to benefit from this appreciation, thereby maximizing your investment returns.
However, it is important to note that off-plan projects also come with their fair share of disadvantages. Let’s explore the cons of buying off-plan properties.
Cons of Buying Off-Plan In Kenya
1. Risk of Delayed Construction or Project Stall
One of the primary concerns with off-plan projects is the possibility of construction delays or even the stalling of the project altogether. It may occur due to various factors like fraudulent developers or mismanagement of funds allocated for construction. It is crucial to thoroughly research and assess the reputation and track record of the developer before committing to an off-plan investment.
2. Potential Discrepancies with Architectural Designs
There is a chance that the final house may not perfectly match the architectural designs or the show house as initially advised by the developer. Although such discrepancies are often minor, it is important to consider this possibility and manage your expectations accordingly.
3. Waiting Period for Occupation or Rental Returns
When investing in off-plan properties, you should be patient enough to wait until the house is complete before you can occupy it or earn rental returns. This waiting period can vary depending on the size and complexity of the project, as well as any unforeseen delays that may arise.
In light of these pros and cons, it is crucial to make an informed decision when considering an off-plan investment. Thoroughly researching the developer, evaluating the project’s location and potential market demand, and seeking professional advice are essential to mitigate risks and ensure a successful investment.
At our consultancy firm, we provide detailed guidance and insights on our listed off-plan and ongoing projects. We strive to empower investors with the knowledge they need to make informed decisions, ensuring they choose the best investment option that aligns with their goals and preferences. Stay tuned for our upcoming feature on off-plan projects in Lavington, Kilimani, and kileleshwa, where we will provide in-depth analysis and expert recommendations to help you navigate the market effectively.
Conclusion
Remember, investing in real estate, particularly in off-plan projects, requires careful consideration and due diligence. By weighing the pros and cons, conducting thorough research, and seeking professional guidance, you can make informed choices and embark on a rewarding real estate investment journey.