Buying Overseas Off Plan Property

Buying overseas off plan property is very tempting. You've probably heard the stories of how you could make a mint from buying early in the development and selling off for short term profits either before its completed or just after.

However, there are risks involved but if you take the right precautions it is possible to make sizeable returns in a short space of time

What Is Buying Off Plan?

Quite simply it means you are buying a property when it is still just a plan; before there is even a 'hole in the ground'. Developers welcome incoming investment at the early stages to keep their cash-flow healthy and will sell at a healthy discount as an incentive for you to invest. Some developers may also offer special mortgages or buy-back deals at a guaranteed return.

Depending on the country you are buying there may be different rules and regulations regarding how much of a deposit you need to put down to reserve your property or how you finance the deal. Talk to your agent and/ or developer to determine the exact requirements.

The risks:

You won't see exactly what you're buying until after you have put your money down. By the time the development is complete, there may be other properties in the vicinity competing for resale buyers or rentals. Your deposit money is tied up for the duration of the build.

The benefits:

If you choose the right development, you will generate positive capital growth. You invest at below than market value, giving you a head start on capital growth. You could resell (or 'flip') the property before completion, to make a quick capital gain.

Be sure to check:

That all official planning permissions are in place. The discount is based on a realistic market value for the finished property. Check out other developments proposed for the area will not affect your properties value

Off plan deals are usually snapped up fast by the smart investor, so once you have done your homework and you're happy it's right for you, act without delay.

If you are serious about buying overseas off-plan property it would be a good idea to find a reputable overseas agent and ask to be put on their mailing list for information about new developments in the area you're interested in.

Related subjects, also see

7 Top Tips For Buying Off Plan Property

Custom build property: Turkey.

Buying Overseas Off Plan Property: a good website for advice.