Property is not small change, although it can be a lucrative market. The options of where and what to buy are endless and you don't want to make the wrong decision. This one tells you it is safer to buy previously owned property, while another insists that new property developments are the way to go.
There is certainly no shortage of new property developments in South Africa, and there is no right or wrong answer to this choice. As a buyer, you have to consider your own needs and weigh up the advantages and disadvantages of your choice.
Advantages and Disadvantages
One of the most important factors to consider is whether you regard this as an investment property. New off-plan property developments offer great investment opportunities, especially if you purchase before construction begins or early on during construction phase. Prices are often initially set below market value to attract investments. Purchasing early also means that you have the pick of the best properties for sale, like the penthouse or the property with the best view.
If you buy property during the final phase of construction it significantly diminishes the investment possibilities for the property. Also, the best properties will already have been taken.
Buying property off-plan as well as early means that you may have to wait a long time before your property will be handed over to you. Delays are not uncommon in the construction industry, and this might extend the period you have to wait even more. It also means that you are not able to see the finished product until construction is eventually completed. On top of that, as the area is still under development, you do not know the ways in which it might change during and after the construction.
These potential problems can be pre-empted by purchasing only from respected property developers and to make sure that the contract includes a penalty in case of a delay. You can also ask your lawyer to look at the local town plan in order to gauge the impact of future developments on the property you are interested in.
Another aspect that many buyers fear is that the constructor might go bankrupt and that the property they eventually take possession of might not live up to the standard advertised prior to the purchase. This should not be a problem when buying from respected promoters and developers, but as a safety measure you can make sure that a bank guarantee and insurance are in order.
After all of this is said and done, new property developments in South Africa do hold certain advantages over and above previously owned properties. As you are buying directly from the promoter, the purchase price does not include the financing of agent fees or having to pay any transfer fees. The purchase price is also set by industry professionals, so you will not find a big fluctuation between the values of similar developments, as you might in the prices set by private sellers. Differences in price will be influenced by the location, the quality and features such as the view.
Another huge benefit is that new buildings usually carry a guarantee to cover main failures in the structure, whereas the responsibility of any damages to a previously owned property will lie solely with you. You are also the first person to occupy this new development, so you can personalise it in any way you want, without first having to spend money on removing installations or modifications made by previous owners.
Buying new property can be daunting, so the most important factor is that you know what you want and what would suit your specific needs. Once this is clear and decided upon, you can go ahead and assess the advantages and disadvantages connected to your options and make an informed decision from there.
Author Bio:
PropertyGenie is a leading online estate agency offering you new property developments as well as existing structures for sale throughout South Africa.