Off-plan buying refers to a concept where you buy a property before its completion. This form of arrangement is gaining popularity Kenya largely due to the financing challenges faced by both developers and end buyers.
Buying off-plan is a great way to purchase a property below its actual market value making it a great investment opportunity. Most investors are attracted to off-plan buying due to the promise of property appreciation. On the other hand, developers offer low prices at the beginning of an off-plan project to secure buyers and investors as soon as possible.
However, many Kenyans have lost their hard-earned cash or ended up owning substandard houses because developers failed to fulfill their promises.
What to consider before opting for an off-plan project
- Trustworthiness and Professionalism – Off-plan investments require you to make protracted payments throughout the development process and the balance upon completion of the project. This means you should work with a developer that will professionally guide you, safeguard your money and interests throughout the period of construction.
- Transparency and Accountability – Look for a developer that is willing to divulge all crucial/helpful information to guide you in making an informed decision. This includes information pertaining to their projects. A credible developer should be transparent with information on how your money is managed throughout the construction stages. You should receive regular updates either monthly or quarterly on the progress of the project.
- Track record – The firm should have previous experience in real estate development. Find out how long the company has been in business and how many completed developments it has under its belt. You might also consider visiting the completed developments and talk to the Find out whether the developer was responsive when they raised issues during and after construction and whether they now feel they got value for their money. Trustworthy developers remain responsive after the handover of the property because most new homes need some kind of post-delivery attention.
- Project Viability – Investigate the location of the project and the surrounding properties as well. As an investor, you want to make sure that the location is prime and attractive to occupants, especially as a buy-to-let investor. Look for an investment that will appreciate in value. To this end, expert developers should have their market feasibility studies which should be easily availed to you as a client.
- Payment Options – An ideal payment plan should last up to the end within the completion dates of the project. Be sure to seek legal advice for interpretation of the contract that you are provided with before appending a signature. The contract should clearly state the amount of initial deposit agreed upon and then detail the specific dates when other payments are expected to come through until completion of the project.
In conclusion, when going for an off-plan property, remember that the experience and expertise of a developer are paramount. Before signing for the deal, conduct your own property due diligence. Inspect the project, the land title deed as well as the project plan approvals. Review the project design and management team and their capabilities.