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Buying off plan or pre construction real estate has huge investment benefits, investors will pay way below market value for a property that is in the planning stage. It also can offer consumers a gradual payment plan that will see the purchase of a brand new property over a few years. Developers use investors the money to finance the build and to put in early profits into the projects. On the face of it its a win win situation however the amount of companies that have gone into administration has put international investors off this type of investment.

I believe off plan property is still viable investment if you tread carefully and secure vital information that you can verify.

Here are 15 questions you need to ask a property developer

  1. What guarantees do I have that the developer for this new property will not go into administration
  2. Will my deposit be placed in an Escrow account?
  3. Tell me about the building company, what work have they done in the past?
  4. Has the builder secured planning permission and local permissions for the project?
  5. Are there any legal safeguards for investors in the case of non-completion or poor construction work by the developer?
  6. If I decided to sell before completion of the project, would that be possible and would I be penalized in anyway?
  7. How easy is it to buy and sell property in this country?
  8. What if I decide to sell the property before completion?
  9. Are there any other fees while the project is being built and what about after completion?
  10. What do you anticipate the rental income to be once the facility opens based on current rates at similar properties?
  11. What is the payment schedule?
  12. What happens if the building is delayed?
  13. What is the rental yield I can expect?
  14. What are the tax and inheritance implications?
  15. What is the buying process in this country?

 In all investments there is a level of risk the more risk the higher returns it is good to get a payment schedule that is linked to a developments progress this will help reduce risk.


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Fernando Herboso - Broker for Maxus Realty Group
Maxus Realty Group - Broker 301-246-0001 - Gaithersburg, MD
301-246-0001 Serving Maryland, DC and Northern VA

My opinion is that any new development will have to take in consideration that nearly 50% of all mortgages are under water in this country and the impact will be felt by everyone of us. . .regardless what market you are under.

Dec 21, 2009 10:29 PM #1
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Nick Marr

Promoting real estate internationally
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