Buying a property off plan

opportunity to buy before or during the building stage.

This has become a common phenomenon around the world. With the stabilisation of our economy, it is a method that will soon become common in the country.
The normal trend in Zimbabwe is to offer the opportunity to buy properties off plan to what are perceived as serious investors.
I will focus on some of the things to look out for when buying off plan from a developer and will incorporate those properties in the construction stage where the plans for the property are provided as part of sale.
If the properties being sold off plan are, for instance, in a cluster setting, then time is of the essence.
It is human nature to drag until the development has gathered momentum before jumping on the bandwagon.
However, in most cases, by the time real interest rises, those who are first on the ball will have purchased most of the prime properties within the development.
It is very common that the buying terms available for the first timers are more favourable than those availed for the late comers.
This is because by the time one decides to jump on to the bandwagon, most critical negotiations will have already taken place and the relative value of the project determined because of the façade of demand facilitated by the first time buyers.
If the reason for buying the property off plan is singularly for investment purposes and is not necessitated by sentimental reasons, it is imperative that one becomes well acquainted with market trends.
The idea is to determine the rental values or resale values of new homes in the area.
The first thing is to assess the proposed location of property.
A general rental and sale valuation of the area should be carried out with specific emphasis to similar developments within the same catchment.
The buck does not stop at getting the average values of property within area because such an approach is misleading.
This becomes dependent on whether it is a buyers or sellers market.
It is best to get a fuller assessment of whether the area has been generally appreciating or depreciating over a number of years.
One can then easily project what value the property will fetch after the proposed completion date of the development.
A comprehensive analysis of the sort of market the proposed development is targeted at vis-a-vis the rental or sell amount one expects to get should be carried out.
The location will give one the first hint, after that the design of the development will assist in the decision-making.
One should assess whether the development is for retirement. This might tally well with serene areas with easy access to medical facilities or conversely if the development is targeting young families.
This will assist buyer with information of the probable time the property will be on the market and the amount it will command.
There are several target markets ranging from the wealthy to the economically challenged and each group can be viewed as a lucrative market where all variables are aligned with the specific development.
It is the job of the investor to assess critically where a higher return on investment will come from considering the initial investment amount.
The next step after an analysis of the above will be stringent assessment of the developer, the development proposal and past projects, the developer undertook.
This is probably one of the most fundamental prerequisites before buying into a development off plan.
The ironic truth is that most computer-generated images of properties are attractive and a most properties hardly manage to match their computer-generated specimen.
Once these images are coupled with a seasoned sales pitch, the buyer has no chance.
It is imperative the buyer makes an onsite assessment of the development especially in cases where the buyer has not had previous dealings with the developer.
By this, one can easily assess whether the developer is within the time range mentioned on brochure and if he is providing all that he is proposing.
If the developer is an old player on the market, then a general onsite review must be undertaken on their previous developments to verify whether the developer actually delivers on the promises they make.
l Vengai Madzima is a property consultant and analyst with Wisdom Properties. He can be contacted on 0772 468093 email: [email protected].