Investing in an off-plan property is simply as it sounds; you are buying off an architects’ floor-plan and the property is yet to be built. Vast majority of purpose-built student accommodation is purchased by the investor during the construction for a number of reasons and benefits -however completed and operational student accommodation is also available.
Interest earned during construction on deposit monies
With off-plan purchase on most student developments, whether you’re buying at pre-launch or anytime during construction, a percentage of the deposit monies (between 3%-7%) will be paid by way of interest on all deposit monies to each investor by the developer. The interest is normally accrued during build and deducted from the completion balance. This fully supports the buyer-funded model and benefits both parties.Read “how are student off-plan projects funded?”
Pre-launch phase for early bird incentives
This is normally two months before the construction start date – once the developer has secured the development site, the project has been planned and drawn by the architects and planning has been approved, a number of pre-sales are required – especially if the project is buyer-funded. This is the perfect time for you to get an early-bird incentive e.g. 2% extra on annual yield or a discount from the purchase price e.g. £5,000 discount on first 50 units sold
Off-plan prices are generally lower than current market value
Generally off-plan prices are around 10% lower than market value during construction, therefore by the time the development has completed in 12-18 months, the apartment would have increase by 10% and increased in line with current market value.
Best pick of apartments
The choice of unit is another reason why investors like to be early into the development. There will always be a few gems in every project, there may be a few units with balconies for the same price as those without or a top floor with penthouses for the same price as the lower floors.
