If you’ve long been searching for your dream ski property and have not managed to find it, perhaps it has yet to be built!
When you purchase a property off plan, you are purchasing the plans for that property (yes, it’s in the name). In other words, the home has yet to be fully constructed. You may hear them referred to as “new build” too.
Here, we cover the pros and cons of this property option for prospective ski homeowners.
Understanding Off-Plan Purchases
Buying an off-plan property means buying a home before it is built. It could be that you are purchasing the blueprint. Alternatively, construction could have already started when you came across the home.
Often, off-plan properties make up a block of ski apartments. Usually, they come with inbuilt luxury features that can be harder to find in older homes, such as underground parking, indoor heated swimming pools and a wellness centre. However, it is also possible to find off-plan villas and houses, though they may be built in a collection.
Typically, you pay for the property in stages, as it is built. It could take two years or more before the property is ready for you to move into. At the start of your buying journey, developers will give you an expected completion date.
Advantages of Buying Off-Plan
Two years might sound like a long time to wait for your new home – so, here’s why off-plan properties are worth the wait.
- Price and value appreciation: Off-plan properties are often marketed at prices below those of comparable completed properties.Developers price these properties more competitively to secure funding and reduce financial risk early in the project.
Then, the period between your purchasing the plans and its construction can see significant growth in the property’s value, especially in the most sought-after destinations. To fully take advantage of this, before choosing a project, read up on the property market and expert predictions of the area(s) you are considering buying in. Upon completion, the property may be worth considerably more than the purchase price, providing a substantial return on investment.
Going forward, new-build properties often attract holidaymakers looking for the reliability, functionality and style of a newer home, giving you the opportunity to generate significant rental yield. - Customisation Options: If you have to wait for your dream home, then you want it to be exactly as you hoped it would be. And with an off-plan property that is achievable. You can ask the developers to add features to the property that you would like. For example, some developments come with a choice of two or three bedroom apartments in one block.
Furthermore, you’ll be able to select fixtures and fittings to your taste and choose finishings from a range offered. - State-of-the-art home: Given that your home will be shiny and new, you can expect high-quality finishes, modern, open-plan design and even smart features.You won’t have to worry about the hang-ups of older homes, like creaky floorboards and mouldy, damp bathrooms.
Disadvantages of Buying Off-Plan
As exciting as buying off plan is, it does come with some potential drawbacks, including:
- Market Risks: By its nature, the real estate market is volatile.
As the construction can take years, during this time, market conditions, interest rates and the ski property market could all change in a way that adversely impacts your property’s value. Plus, you’ll also need to be confident that you can budget effectively to afford the payments for the property, and that your personal finances will not change too much during this period.If you end up not being able to pay, lawyers could chase you for the full balance. Furthermore, when buy overseas, you have to contend with a different currency. Exchange rates can move against you, especially during two years, making how much you will pay for your ski home unpredictable.
To safeguard against this, you may want to reach out to currency specialists Smart Currency Exchange, who can lock in an exchange rate for you for up to twelve months, using a forward contract. - Project Delays: Construction delays are a common issue in off-plan developments. They can be caused by a myriad of factors, including funding issues, planning permission delays, contractor disputes, or unforeseen circumstances such as natural disasters.These delays can have a domino effect, causing inconvenience and additional costs for buyers who may have to arrange alternative accommodations or face extended periods without rental income.
Before you buy, you may want to look into how previous projects by your developer have unfolded. - Quality and Expectations: A detailed plan, a tour around developments previously completed by your developer and A.I. generated images can all help to create a picture in your mind of what your future property will be like. Even so, imagining is not the same as walking around a property and falling in love with it, in person.
Therefore, you do run the risk of the property not meeting your expectations. In the worst cases, this could even necessitate legal action, if the developers have significantly failed to create the promised blueprint, which can be costly.
Legal and Financial Considerations
Off-plan purchases involve complex legal agreements that can be daunting.
Buyers must navigate through various clauses and stipulations that can have considerable implications. It’s crucial to understand the contractual obligations, the penalties for late completion, and the recourse available if the property does not meet the agreed standards.Early on in your buying journey, it is a good idea to hire an independent, bilingual lawyer who can walk you through the process and translate any paperwork.
Making an Informed Decision
Buying an off-plan property may not be the best fit for everyone. It might just be that two years is too long a wait and that the potential for project delays is off-putting. Some potential cons, such as the completed property not meeting expectations, can be mitigated by researching the developer’s previous projects and ensuring the legal documentation is air-tight before you put a penny down.
At their best, off-plan properties are a fantastic opportunity and make beautiful, brilliant, smooth-running homes, with lots of potential for yielding rental income.
