by Jemma Pearson It’s not like buying an established home, but purchasing off the plan is an opportunity worth investigating.

But ignore this type of property buying opportunity and you could miss out on some great gains – financial and lifestyle.

So what is buying off the plan all about? Developing a bare plot of land into a unit or apartment complex is an expensive business. Selling those units off the plan, sometimes in stages, helps developers obtain funding to build the entire project. Developers can market and sell their projects, gauging interest and attracting buyers, before it’s finished. But buying off the plan isn’t advantageous for just the developer. For prospective purchasers, this form of buying means they get a brand-new apartment, one  that they can perhaps even have input  into designing. Because there can be many months between signing the contract and  final settlement, there is even a chance the property will increase in value before you  get the keys.

Buying off the plan is very safe. There is a lot of legislation that protects purchasers’ rights

Sunshine Coast developer Reed Property Group is in the process of selling homes  in Emporio, an innovative mixed-use development in Maroochydore. General manager Carl Nancarrow says the development offers all sorts of opportunities for investors and  owner-occupiers. “One-, two- and three-bed apartments, plus commercial and retail,” says Carl.

For buyers moving into Emporio, there will  be two key things they have to get their heads around – buying off the plan and buying into an apartment. “We get a few people who are new  to apartments,” says Carl, adding that early in the selling process there tends to be more investors looking to buy, while owner-occupiers, usually tentative in the early stages, gain confidence from the fact that others are buying and tend to crop up once the development is well and truly underway.

Like Reed, Walter Iezzi Development Group has been developing projects on the Sunshine Coast since the 1980s. Walter Iezzi is an old hand at selling off the plan, having constructed more than $280 million worth of projects in the past eight years alone. “The normal process,” he says,  “is to sell of the plan and this reinforces the value [off the project] as well as satisfies the valuers and the banks”.

Right now Walter is busy signing contracts on Monterey, his boutique apartment development on Buderim’s eastern escarpment. Walter says  13 out of the 30 apartments have already sold.

The process of buying off the plan is, obviously, different to buying an established property. Instead of inspecting the home, you’ll be inspecting plans, checking up on the developer’s track record and perhaps choosing paint colours, fixtures and finishes. If you’re happy to proceed, you sign a contract, pay a deposit and wait for your new home to be built. Settlement occurs when the building is complete.

Selling units off the plan helps developers obtain funding to build the entire project

It’s in the early stages that it’s essential to do your homework. If you’ve had a look around the developer’s display unit, make sure the apartment you’re looking to buy has the same quality of fittings and fixtures as the display. “We’ve got  an onsite display centre with a large model of  the entire development,” says Carl of Emporio. “People can have a look and the sales manager goes through the process of buying off the plan.”

He adds, “We walk them through the contract documents and if they are comfortable with that they can then put a deposit down – about $1000. There is a five-day cooling off period.” And then they are asked for a 10 per cent deposit. “That goes into a trust account.” This offers peace of mind to buyers – as their money goes into trust, “if something goes wrong the purchasers can get their money back”, says Carl.

Before signing any contract, of course, buyers are advised to get their solicitors’ advice. Then  it’s just a matter of waiting for the developer to  get on with the job, and perhaps even for the market to improve. “Because of the timing, if you buy at the bottom of the market there is good opportunity to pick up capital gain,” Walter says.

On the subject of capital gain, there was a time when investors would get into a development early, wait for the market to rise and sell before settlement, picking up a tidy profit along the  way. But this form of investing is perhaps too speculative for today’s more subdued investors. “[Selling before settlement] is possible, but not  a lot of buyers do it,” says Carl. “Most people, particularly nowadays, are making longer-term investment decisions.”

Speak to bank managers. They’ll know if the developer is credible and the type of stock the developer is known to provide...Walter Iezzi

And if it is a home you are after and not simply an investment, buying off the plan can offer opportunities to play around with the apartment’s design. If it’s important for you to have input into the colour of the walls, and you want to choose the taps and the material used for the kitchen benchtops, check with your developer if this is possible. Some allow for design changes while other developments have fairly strict guidelines about colours and fittings.

“My attitude is that within a unit there are  only so many walls and doors, so they [buyers]  can go for broke as long as it doesn’t affect the construction program – the end product is important,” says Walter regarding Monterey. “I always support [people making design changes]  if it doesn’t affect the structure and the construction programme.”

Walter adds that the one thing he believes makes people nervous about buying off the plan is “uncertainty”. He advises prospective buyers  to thoroughly check up on the credibility of the developer. “Do the groundwork, chat to your lawyer, chat to consultants and valuers,” he says. “Valuers generally are the ones familiar with all of the stock on the Coast. Speak to bank managers. They’ll know if the developer is credible and the type of stock the developer is known to provide.”

“I think probably the key things we tell people is that buying off the plan is very safe,” says Carl. “There is a lot of consumer protection legislation that protects purchasers’ rights. Gone are the days that a developer can change things and not deliver. Nowadays it’s a very safe investment. Some of the horror stories of the past just couldn’t happen now.”

Carl says with DVD fly-throughs, plans  and models, buyers can get a good idea of what they are buying. Good communication is the  key when dealing with a developer, he says,  and always go with one that has a good track record.

PURCHASE CHECKLIST

To make your buying experience as risk-free as possible, make sure you:

1. Do you homework on the developer and builder – check out the other projects they have worked on and chat to other buyers about their reputation.

2. Check the proposed measurements of the property you plan to buy. Note the ceiling heights and room widths, the size of the car parks, the amount of storage the unit will have and the type of fixtures and fittings included to make sure they all meet your needs.

3. If you’re new to apartment living, don’t forget to look into body corporate fees and other levies you’ll be obliged to pay once the work is done.

4. If you’re keen for a view, don’t forget to look at the land around the new building and investigate if there are other proposed developments that could potentially impose on your outlook.

5. Check the building by-laws, which are the set of the rules you must abide by when living in the apartment complex. By-laws cover things such as keeping pets, noise limits and parking.

6. If you like the idea of apartment living because of the security it offers, don’t forget to check out what kind of access control and security systems are in place for your floor, the entire building the car park and common areas.