#3 Buying Off The Plan is not set and forget
Автор: Anthony Cordato
Загружено: 2024-10-06
Просмотров: 19
Buying a home unit or townhouse off the plan has many financial advantages:
1. Generous Payment Terms: pay a 10% deposit when signing the Contract; pay the remaining 90% of the price up to 2 years later, when it is built.
2. Borrow 80% of the price at settlement.
3. Buy a brand-new property, often with your choice of colour scheme.
4. Full depreciation: investors can write off the value of fittings and fixtures against tax.
5. A fixed price: all the capital growth is yours.
But buying off the plan is not set and forget.
The big uncertainty is the loan approval, because it cannot be obtained until the building is finished. You might be expecting to borrow 80% of the price and might have a pre-approval when you sign the Contract. But if when the time comes to settle the property is valued at less than the Contract price, then you might not have enough money to settle.
You need a fall-back plan, which could be a savings plan or having another property available with equity which can be used for the loan. This is explained in the video,
Watch the video now
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