Property Ventures Selling New Builds

Property Ventures are about to put some serious attention into selling new builds, presenting properties to their investors and homeowners that are a little unique or, more importantly, that follow the basic fundamentals of investing.

The first one of them is that they must be in a particularly good location that will encourage growth for both the area and value increase in the future for the development or complex they are selling.

There are several reasons why Property Ventures think new builds are a good investment opportunity now and the main one is that new builds only require a 20% deposit, as opposed most investment properties requiring 40%.

New builds can include off-the-plan apartments or townhouses, sections, sections with land and home packages, and new builds that are purchased from the developer within six months of ‘code compliance’ or earlier

Property Ventures recommend that you should always go into a development where the developer has had a great deal of experience. They learn on every development, and figure out what works better for the next project, such as what the needs of the buyers are, tenants’ needs, community needs, construction costs, lending criteria and time lines of the project.

These are all individually so important for you, the buyer, at the end of the day and can make an off-the-plan build more costly or risky. So the more a developer has done, the more comfort you should have in working with them and the end result you will get.

Regarding finance, if you are purchasing off the plans for a completion that is more than a year away, there are no guarantees your finance will be approved based on today’s rules. Most lending institutions won’t confirm lending that far out. Finally, it is incredibly important, if you are buying an off-the-plan investment or home you will need a Sunset Clause. In most cases there is an expected date the project will finish and code of compliance certificate issued, but inevitably these do get pushed back. There can be many reasons for delays, so what you should have is a ‘Sunset Clause Date’ which might be six months or a year after the expected finish date.  (It has to be fair for the developer as well.)

If the project is not finished by this date, you, the buyer, have a chance to pull out of the project and get your full deposit back. If you want to stay on with the project you can. Remember, one of the risks with developments is time and what the market will be doing when it is finished, so bearing this in mind, the ‘Sunset Clause’ is a MUST.  For more information please go to http://www.propertyventures.co.nz .