Frequently Asked Questions
Frequently Asked Questions...
Yes, off-the-plan real estate can be a great investment because it allows you to secure a property at today’s prices with the potential for future capital growth by the time it’s completed.
Off-the-plan investments offer advantages like potential capital appreciation, modern designs, and the opportunity to customize finishes in some cases.
Yes, when you sign an off-the-plan contract, you typically secure the property at the current market price, potentially avoiding price increases before completion.
Yes, you may benefit from tax advantages, such as depreciation and potential deductions for interest payments, making it a tax-effective investment.
Off-the-plan properties in sought-after locations often have good rental income potential, providing a steady cash flow for investors.
Various grants like the First Home Buyers Grant or tax benefits are available for off-the-plan buyers, providing additional financial support to help get you into the property market.
Depending on your location, you may be eligible for government incentives like grants or stamp duty concessions, which can enhance your investment return.
Yes, newly built properties typically come with structural warranties and guarantees, providing peace of mind regarding the quality of construction.
In many cases, developers allow buyers to choose certain finishes, making it possible to personalize the property to your preferences.
Payment schedules are often flexible, with a deposit upon signing the contract and subsequent payments as the property progresses, allowing you to manage your cash flow.
Off-the-plan properties can experience capital growth as the real estate market appreciates, potentially resulting in a higher property value upon completion.
You can research the developer’s past projects, reviews, and track record to ensure you are dealing with a reputable and experienced developer.
While there are risks, thorough due diligence and careful selection can help mitigate them, ensuring your investment remains sound. (Investors International only sells from trusted developers and we have a team of analysts to help assess each purchase)
Yes, SMSFs can invest in off-the-plan properties, providing an additional avenue for growing your retirement savings.
You can often resell your off-the-plan property before completion, potentially benefiting from any capital appreciation without having to settle on the property.
Developers typically provide updates on construction progress, allowing you to stay informed and track your investment’s development.
The Australian Property market is showing resilience and steady growth, especially in Queensland and specifically Gold Coast.
Yes, especially in QLD and Gold Coast, where off-the-plan properties offer promising returns and capital growth.
Yes, with proper due diligence and reputable developers, off-the-plan properties can offer secure investment opportunities.
First-time home buyers can take advantage of government incentives and grants, lower entry costs, and the ability to customize their property.
Location, Developer, Reputation, Project Timeline, and Potential Rental Yields are key factors to consider.
Queensland and the Gold Coast offer strong growth prospects due to increasing population, infrastructure development, and lifestyle appeal.
Investing in off-the-plan properties contributes to economic growth by simulating construction activity and creating jobs.
While risks exist, such as construction delays or market fluctuations, thorough research, due diligence and using the right team will help mitigate these risks.
Deposit Bonds...
A deposit bond can be used instead of cash to commit to a property purchase.
A purchaser is required to pay a deposit which is usually 10% of the property purchase price. Instead of the purchaser paying a 10% cash deposit, a deposit bond can be used as an alternative. A deposit bond is very similar to a bank guarantee except it is issued by an insurance company.
A deposit bond is suitable for any buyer that has the capacity to buy a property but does not have cash readily available to pay the deposit.
Those buyers include:
- up sizers
- down sizers
- investors
- first home buyers.
Once submitted, it takes less than 24 hours for an application to be processed. If approved, the bond is issued immediately after payment of the fee.
People choose a deposit bond for the following reasons:
- it is simple and quick to organise
- it doesn’t tie up assets
- it is cost effective.
Most people do not have lots of money sitting in a bank account readily available to pay a cash deposit on a property purchase. Instead, they may have their money locked up in the equity of their home or invested in shares or their superannuation fund earning them a return. To come up with the cash deposit, they may have to liquidate existing assets or organise a loan against their home. This takes time and may result in lost earnings on investments or unnecessary interest payments on a loan.
No, a purchaser does not need to provide any security for a deposit bond.
A deposit bond can be arranged very quickly compared to a bank loan or bank guarantee that takes weeks to organise and always requires security.
A deposit bond can be issued for terms ranging from 6 to 60 months.
When buying an ‘off the plan’ property, extended settlement periods are often needed. These periods provided for in the contract of sale vary from project to project. Deposit bonds are issued for terms to match the property sale contract requirements.
The cost of a deposit bond varies depending on the deposit amount and term required.
As a guide the fee is approximately 3% of the deposit amount per annum which is less than the interest rate you would pay if you were to borrow the deposit.
If the buyer defaults on the property purchase, the seller is entitled to retain the deposit bond amount which they claim from the insurer.
The insurer then seeks recovery of the deposit bond amount they have paid from the buyer.
Yes, you can apply for a rebate of part of the fee if you settle early.
A fee rebate can be applied for if the property sale completes more than 6 months before the expiry date of the deposit bond. Terms and conditions apply.
The main qualifying criteria for a long term deposit bond is; the purchaser must own an existing property with a certain level of equity in that property.
The required equity needed to qualify varies depending on the deposit amount and the duration of the deposit bond.