11 Reasons to Buy an Off the Plan Townhouse
Have you thought about buying an off-plan townhouse?
Yet, there is much to consider if you’re thinking about buying off the plan, whilst perusing the Melbourne townhouses for sale.
It’s a little bit different to buying an established property.
All you have to go off is project marketing, which you can learn more about here.
Luckily, in this article, we’ll share 11 reasons why buying an off-the-plan townhouse is a great idea.
You may expect to read some of the reasons, but hopefully, some of them will also be new information. And here is some real estate motivation to boot!
1. Move Into a Brand New Home
Should you buy a townhouse – one of the main reasons people buy off-the-plan townhouses is that you are guaranteed to move into a brand-spanking new home.
If you buy an existing property, particularly an older home, there is often lots of work to make the home livable. Some even require complete renovations before they are up to an acceptable standard.
2. Stamp Duty Savings
The second reason you should buy an off the plan townhouse is that you will see significant stamp duty savings.
3. New Home Buyer Grants
Buying off the plan property means that you could be eligible for new homeowner/buyer grants.
Imagine what you could do with that sort of spare money. It could make a perfect moving-in present for yourself. Or again, as we suggest above, could be put towards furnishing or decorating your new home, or upgrading things like window dressings.
4. Tax Benefits – for Investment Properties
In short, this means you can claim a percentage of construction costs for your new investment property. Which means your taxable income is reduced.
This is particularly useful if you have income from work in addition to rental yields. You could see a tax refund if you are lucky (and if you have a good accountant). Or, if you wind up with a tax bill, the depreciation on your investment property can reduce the amount payable to the ATO. Which is always a good thing.
5. Higher Rental Yields
Again, if you’re buying off the plan as an investor, another advantage is that you can ask for a higher rental price than older properties. The home run is a positively geared investment out of the gate.
A new townhouse is appealing to renters, who are often younger professionals waiting for their turn to enter the market.
The next point will demonstrate that it requires more upkeep and repair work than a new home.
6. Fewer Repairs and Maintenance are Required at First
Another proven benefit if you buy a townhouse off the plan is that you are usually set for a few years for any repairs or maintenance on your home.
An existing property will have issues present all the time, from roof leaks to appliance breakdowns. Also, blocked drains and other plumbing issues are common, as well as needing regular maintenance to keep the home in good order.
Now, a new townhouse purchased off the plan will still require maintenance. However, you’re usually right as rain for a few years.
For instance, carpet needs replacing every five to ten years, depending on wear and tear. You also need to clean your gutters. Appliances like dishwashers and climate control systems can also give up the ghost after five or ten years.
When you buy an existing property, it’s a complete roll of the dice to guess when the previous owner performed the above tasks. Within a year, you could move in and need to replace the heater and the air con. Then you need to patch a hole in the roof, replace carpets, and repair the dishwasher. This adds up in terms of cost.
With a new, off-the-plan townhouse, you are guaranteed a few working years for your appliances and new carpet, roofing, and other elements of the home.
In addition to this, your appliances in an off-the-plan townhouse will come with their manufacturer’s warranty. So, you’re covered if things break within a year of moving in.
7. Lower Energy Bills
Newer homes are constructed with energy efficiency in mind. This means they are properly insulated (in the roof and walls). Depending on the season, they have other design elements that help the home keep the cool/warm air inside.
With a new, off-the-plan townhouse, you will spend less than the average person on heating and cooling your home.
8. Capital Gain Potential
Furthermore, when buying an off-the-plan townhouse, you could see significant capital gains by the time you move into your new home.
For instance, if you purchase your off-the-plan townhouse for $800,000 and then wait a year for construction to complete, you may see a rise in value.
This will depend on the area and the market, but in the above example, your new home may be worth an additional 20 or 30 per cent on top of what you paid for it.
This means that you wind up with equity in your house, which you could leverage for additional borrowing power. For instance, you can use equity to purchase an investment property or a boat or caravan, if you’re the outdoorsy type.
9. Gives You Time to Prepare
This means you have a year to save your money, compared to purchasing an existing property and needing to start paying your mortgage immediately.
You can use the saved cash for anything you want. Again, you could put money into the home in terms of furniture, entertainment systems or other toys. You could go on holiday. You could even pay it into your home loan, reducing your payments and giving you available redraw as savings you can use when you need it.
We often see young people living at home while they wait for their off the plan property to complete in this situation – they can save money quickly and start off in a better position once they move in.
10. Locked-in Price
With an existing property, the auction may determine the house’s value, which can vary hundreds of thousands of dollars from the estimated price, depending on how hot the auction action was on the day.
Whereas an off the plan property is a set price. You pay your deposit and sign a contract that states the final amount. If the property value rises a year later, that benefits you as the buyer, not the seller. We detailed above the capital gains potential of buying off the plan.
11. Some Customisation Offered
Another significant benefit is that buying off the plan means you can customise some elements of your new home.
The main design and layout are usually consistent across the properties.
You’ll save money while you wait for the construction to finish, you’ll save money on heating and cooling, and you’ll save money as the price is locked in.
For landlords, there are tax benefits to buying new real estate. You’ll take advantage of government grants for new home buyers because you’re buying a new property. And there are also decent stamp duty savings when you buy off the plan.
There’s nothing quite like moving into a brand-new home, with everything sparkling, pristine and untouched.
If you are a seller or are interested in how to sell real estate of the plan click here.
And finally, if you are looking for a real estate marketing business to help, we can help – don’t hesitate to reach out we would love to hear from you.