7 Reasons For Buying Off The Plan Property
1. One of the well known and biggest reasons for buying off the plan property is the potential for huge stamp duty savings. For example, in Victoria you could potentially save over $18,700 on a $500,000 purchase if you purchase a new Off The Plan property instead of an established property.
2. A lesser known reason to buy a new Off The Plan property is the increased tax depreciation that is available for Off The Plan properties. Increased depreciation means your holding costs will be much lower as the tax man is covering a bigger portion of your investment property expenses.
At Latte Property we have had great success showing property investors how to reduce their after tax contributions down to less than a latte a day.
3. New Off The Plan properties also require significantly less maintenance than an older established property. This means you will reduce your expenses but more importantly will reduce the STRESS that comes with property maintenance issues.
4. Buying Off The Plan will mean you can avoid the common high cost renovations that will be required on an older property. It is not widely known that renovation costs are not always tax deductible, and even if they are, you still need to come up with the cash and deal with the stress and inconvenience.
5. With recent changes to the Australian Building Code, new properties must now meet stringent energy efficiency requirements. The benefit of this is that with the increased cost of Gas, Water and Electricity, tenants are now actively looking for and sometimes demanding energy efficient properties. By purchasing new property you will meet this increasing demand from tenants. It is also much easier to find quality tenants with new, modern properties, as everyone wants to live in a new property!
6. Buying Off The Plan allows you to purchase at today’s market prices. In an upswinging market this can provide opportunity to increase your property value before your property is finished construction. With an excellent team around you increased values can be achieved, but it is best looked upon as a nice bonus rather than being your sole motivation for buying Off The Plan.
7. Lastly, Buying Off The Plan is one of the easiest ways to get into the property market, as you only need to put down a 10% deposit now. The remaining balance and/or finance is not required until construction has been completed. With construction taking between 6 months and up to three years on some projects, this gives you extra time to save and put more towards your new property.
With more savings to put towards your new property you will be able to borrow less and therefore your loan repayments will be much lower.
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By Darryl Simms