PROS AND CONS: IS OFF-PLAN PROPERTY SAFE IN NIGERIA?
INTRODUCTION:
Are you considering buying a property in Nigeria before it’s built? This is known as an off-plan purchase. While it can be a smart investment, it is wise to understand what it is and consider some factors.
WHAT IS AN OFF-PLAN PROPERTY?
An off-plan property refers to a property that is purchased before it is fully built or completed. This means that the buyer invests in a property that is still in the planning or construction stage.You are essentially buying a promise that the property will be delivered to you in the future
UNDERSTANDING THE BASICS OF OFF-PLAN PROPERTY.
The Developer announces a new project (e.g., apartments, houses, or commercial buildings).
The Buyer purchases a unit or property within the project before construction is complete.
The Buyer then pays a deposit or instalment payments while the property is being built.
The Buyer completes payment before completion of property.
Once the property is completed, the buyer receives the keys to their new property.
Off-Plan property can last for 1-4 years depending on the structure and architecture.
SHOULD I INVEST IN OFF-PLAN PROPERTY?
Off-plan property purchases can be rewarding/beneficial, but if you are new in the Real estate market, you should consider its pros and cons and be aware of some safety tips.
PROS OF OFF-PLAN PROPERTY
The questions, “What are the benefits of an Off-Plan property? Is it a good investment plan?” Will be answered once you know how beneficial Off-plan Property is.
1. Potential for high returns: Off-plan properties often increase in value before completion but it doesn’t mean you will pay more. It simply means, you will make profit from it if you decide to sell. A finished apartment is more expensive and valuable than an unfinished one.
2. Early bird discounts: Developers may offer discounts for early purchases which enable you to get the property at a very low price compared to what those who purchase late will get. Although this is not the same for all developers, it’s a huge advantage.
3. Customization: Buyers may have input on finishes and designs to suit their taste and style. Unlike a finished property where the design is determined solely by the developer.
4. Payment plans: Developers may offer flexible payment plans allowing you to make a down payment to secure your share of the property.
5. New property: On completion, buyers receive a brand-new property, often with modern amenities (if included in the design).
CONS OF OFF-PLAN PROPERTY
1. Risk of project abandonment: Developers might abandon the project, leaving buyers stranded. This can be resolved once the safety measures are applied.
2. Delays: Completion dates might be delayed, affecting rental income or occupancy. Also, Government policies can bring delay in construction but with a reputable real estate expert, you won’t have to worry.
3. Quality concerns: Final product might differ from promised quality which can be avoided if proper check is carried out on the property during construction.
4. Legal issues: Ensure proper documentation and legal checks to avoid this problem.
SAFETY TIPS TO HELP YOUR INVESTMENT IN AN OFF-PLAN PROPERTY:
1. Research the developer’s reputation.
2. Verify project approvals and licences.
3. Consider working with a real estate expert.
4. Stay updated with improvements in the project.
5. Ensure clear documentation and contracts.
BELOW ARE SOME OFF-PLAN PROPERTIES IN LAGOS
While investing in off-plan property is profitable, it is also important to know some areas in Lagos that are worth investing in.
As at August 2024, below are off-plan properties worth looking into:
CONCLUSION:
An off-plan property is safe and beneficial in Nigeria. All you need is to exercise caution and thoroughly research the developer, project, and legal aspects before investing.
