5 truths behind off-plan retirement opportunities
Off-plan developments come with great incentives, especially for retirees. Whether you may be investing or buying to live, there are some imperative things you need to know when buying into an off-plan development. We uncover 5 truths behind off-plan opportunities that will influence how you invest and purchase going forward.
The developer influences the result
When looking to buy an off-plan retirement development ensure the developer has a proven track record and successful reputation. For retirees, it is better to invest in established developers who have a proven record of resounding estate developments behind them.
Location plays an important part
From living a relaxed coastal location to countryside bliss; KwaZulu-Natal has an array of great locations that offer retirees their ideal retirement lifestyle while still not being too far from all the necessary amenities like shopping centres and hospitals. If you are looking for something peaceful and tranquil, look into the Upper Highway area, where nature surrounds you, or the South Coast where you have secure opportunities close to the beach. While those looking to be close to the airport and popular local hotspots can find prized opportunities along the North Coast.
Your money is protected
Ensuring your money is protected and doesn’t get lost on a development that is never realised or is delivered in poor condition, is a major risk factor for investors, especially retirees. If you are looking into buying an off-plan development, retirees can have the peace of mind knowing that the Consumer Protection Act offers consumers far more protection when investing in these developments. For instance, if a product is not delivered close to it has been described in the contract of sale or in the advertising material, the buyer can cancel the contract. Developers are being put under pressure to deliver exactly what they have promised and account for any defects thereafter. Always ask for the NHBRC certificate of the builder contracted for the development. If a development goes bankrupt before being transferred to you the contract can be cancelled and you can claim your deposit, and have it paid back with interest. It is good to note that developers are required to put your money in a trust account for safekeeping.
When purchasing off-plan, one of the major benefits is forgoing transfer duty costs as you are buying the property directly from the developer. There are however other costs you need to be wary of and these include the transfer fees, which are the attorney’s fees. There is also a period just before the property is transferred to you, however you will be living in your new home, this is called occupational rent and you should be made aware of this when signing your sales contract.
If you are investing in retirement property with the intention to gain a rental return, you would also need to be aware of the tax deductions you will be eligible for.
Guaranteed capital appreciation
There is no denying, when you purchase into an off-plan development the value will increase; ensuring you gain capital appreciation between the time you purchase and are ready to take transfer. You initially will need to only put down a 10% deposit of the purchase price; thereafter the property rises in value as it goes through the construction phase and again when it is completed.
The biggest advice for buying off-plan is to ensure you are fully aware and educated of all the possible pros and cons of this investment. Read your contract of sale, consult an attorney and understand fully where you stand before you sign or pay anything.