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Real Estate Matters: Off Plan Investment

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image Juliet Risdon is a Macau based property investor, renovator and real estate broker.*

Buying an off the plan property is a common vehicle of investment the world over and Macau is no different. Buying off the plan, as the term suggests, involves entering a contract to buy a property before construction is complete. For developers, selling off the plan helps keep their cash flow positive and minimises the risks of large-scale projects. By securing pre-commitments, the viability of their development should be guaranteed.
Of course, buying off the plan means you are punting on buying at the right price and achieving good capital growth and can be a very good proposition for those that can predict the real estate market accurately and can anticipate the success of investing in an apartment complex in a certain area. Excluding the deposit, and depending on the annual growth rate of property prices, you could find yourself well ahead in capital growth before even having to pay for the property. However it must be said that there are risks to the buying off the plan strategy, if the market drops in the short term, investors should be prepared to play the completion price for the investment and ride out the storm. 

For further information please call me or visit our website Www.RLLMacau.Com, or visit us on Www.Facebook. Com/JMLRealEstate we are always happy to give you our opinion and expertise whenever we can help.  Any comments or feedback on this column are welcome, and if you have a property related question please e mail it us at: info@JMLMacau.com and we will respond to you in this column or by return E mail.

At JML, we spend a great deal of time in developing good relationships with most developers as this allows us early entry into projects and often significant discounts, thereby maximizing investors’ profits. If you are able to get involved with the property early, you might also get a say in the floor plans and interiors, making the project your own. It’s far easier to on- sell what you believe in than somebody else’s vision.
It is usual in Macau to pay a 10%-30% deposit on an off the plan property, with the balance becoming due on completion. What is less common elsewhere but unexceptional in Macau is to re-sell the contract and flip the property prior to the property settlement. When the contract is re-sold, the new buyer pays the original deposit plus the difference/increase on the sale amount, which delivers the profit. If the uptrend in the property market was predicted accurately, this may be a substanial amount of money. 

*Having established Juliet Macau Limited in 1994, and now offering “turn key” services for Macau property investors, the company has grown to accommodate investors from all over the world. No longer the sleepy backwater, it seems that everyone wants a piece of the Macau action!

 

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