As a purchaser, the decision to buy off a property developer comes down to it reputation, the price, growth forecasts and suitability (for rental or liveability)
When you should use a property developer
Off the plan properties offer an attractive alternative because a property constructed by a developer requires zero upfront maintenance; and you are given the opportunity to customise the property. Investors should be aware of:
- opportunity to secure depreciation benefits on your newly built house or apartment
- possibility that you could be eligible for stamp duty concessions which could save you thousands
- settlement period is longer as opposed to buying an existing home, meaning you have more time to amass equity
- personalise the property as you like based on your colour, material and design to maximise rent and minimise vacancy rates
- it’s possible that at the time you lock in a price for your off the plan purchase, prices in the area grow, meaning come settlement your new house or apartment has increased in value
- homes in an as new condition that requires no immediate maintenance, repairs or high upkeep have a lower vacancy rate
- modern homes are often fitted with power saving appliances and built to align with stringent energy efficiency codes which can contribute towards the lowering of energy costs for renters
Researching the reputation of a property developer
When choosing to buy off the plan or brand new from a developer, it’s important to first consider their reputation. Too many would be investors fail to see past smooth sales pitches and glossy brochures without doing their due diligence, or asking themselves the right questions.
- Has the developer or development company completed other local projects to an acceptable standard?
- Do they have a history of meeting deadlines?
- Are there been any unresolved court actions against them?
- How many years experience do they have as developers?
- What type of build do they specialise in?
- Does the quality of their display homes match up with reality?
- How committed are they to making sure that I’m happy with the final result?
Proactively seeking out answers to these enquiries, organising a face to face meeting with the developers and even visiting the proposed construction site of the property are all practical methods for validating the credibility of the developer or development company. Not only does this eliminate any uncertainty surrounding off the plan purchases; you’ll now be able to expedite the investment process and approach any transaction with confidence.
Choosing the right property developer
Finding a developer with a proven track record is much easier than many Australian’s think. With the internet and social media comes a new era of transparency, where dodgy builders are publicly named and shamed. If you’re thinking of buying an investment property in 2018 or growing an existing portfolio, it pays to take your time when looking for a trustworthy developer.
Over 2018, PMI will aspire to provide transparency and visibility into the reputation of property developers.
Where we would start – Award Winners
Urban task force is a continued force in property development, seeking out the best in field. The below list are the 2017 award winners – which, to the collective knowledge of PMI – are all amazing developers to start you research with
- Lendlease
- Mirvac
- Frasers Property Group
- Stockland
- Citi-100
- PAYCE & Sekisui House Australia
- Helm Pty Limited
- Charter Hall
- Legacy Property Group
- Crown Group
- Landcom & Greenfields Development Company
- Hyecorp Property Group
- EDG Capital PTY LTD
Check back in the next few days for our series on finding the right property developer for you