Are you looking to expand your investment portfolio or establish a steady passive income stream through off-plan property investment in London? Ensure you know the benefits, risks, and strategies to reap the maximum opportunities from your investment!
Off-Plan PropertiesOff-plan property is planned property that has yet to be built. Property developers sell the off-plan property to help finance their builds, which can be off-putting to some investors. However, as with any property investment in London, many benefits and risks are associated with an off-plan property.
The Benefits of Off-Plan PropertiesOff-plan property has several advantages:
Discounted Investment PricesMost off-plan property is bought at a discounted price than established estates. That’s why off-plan property investment in London is popular among investors. They are setting themselves inside a significant, internationally-connected city and doing so at an unbeatable price. Plus, off-plan property investment in London is appealing internationally and domestically, leading to the development of new off-plan properties.
Off-plan property developers need capital to build properties, so why not use that to your advantage and negotiate to ensure a superior investment to the competitors? If you need help, click here.
Guaranteed Property OwnershipWhen you engage into off-plan property investment in London, it becomes a property investment guaranteed to be yours. You bought the property and can do whatever you want once it is built. You can turn it into a vacation or let property.
Property investment in London is growing, and more international and domestic residents are looking for affordable, new builds to inhabit. This can lead to a new income stream that helps you pursue your aspirations. If you turn your off-plan property investment in London into a let property, you can secure passive income and a substantial economic benefit.
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Usually Built in Desirable AreasAs mentioned, off-plan property in London is built in highly desirable areas close to amenities, universities, and recent tourism or city infrastructure projects. If you purchase an off-plan property investment in London, these areas will receive heavy development and interest from interested tenants and residents.
For example, if you purchase off-plan property investment in London and it happens to be close to a university, international and domestic students will flock to try and secure the rental, as they will need a place to stay close to campus and retain their position after they graduate. London is a hotspot for international students, resulting in guaranteed occupancy and passive income throughout several semesters, terms, and beyond.
Another example is in recently developed areas. Those areas usually have an off-plan property available and have been locally and internationally advertising the project on the news, blogs, and social media. This inspires interest and causes people looking to move to the city of London to consider it, while many will start to look at off-plan properties. Suppose you secure an off-plan property investment in London. In that case, you’ll guarantee a tenant and establish your success in a portfolio that will turn you from a simple landlord into a property investor.
Become an Investor, Not a LandlordInvesting in off-plan property makes you more than just a landlord. As an investor, a landlord works for you. You want to avoid dealing with the day-to-day quirks and annoyances of owning a second property. That should be someone else’s job while you reap all the benefits and pursue what you want with a diversified portfolio. One that can help you make more strategic investments in different areas.
If you want more information about portfolio management for off-plan or new build properties, click here to learn more.
Off-Plan Property RisksAs with any property investment, you should expect there to be risks involved. With off-plan property investment in London, it is crucial to keep several things in mind.
OverpayingGiven that off-plan property has an estimated valuation, there is a chance the finished property will not live up to the hype. The area or plan development could lose its valuation; in that case, you essentially paid for something that cannot deliver.
Despite how it sounds, this is quite common in property investment. It helps to have an expert who can ensure you receive the most for your investment. It is never a good feeling to overpay; you shouldn’t have to.
Failure to DeliverSometimes, by an act of some higher power or just bad dealings and incompetence, deals can fall through, and property developers can fail to deliver. What this means is that your investment is gone with the property that was being built. This is always possible with any off-plan property; London is very busy, with contracts and plans shifting every few days.
If a property developer fails to deliver, it can be disastrous for your finances. Again, we encourage you to contact an expert before making any property investment decisions. It can save you a lot of headaches and cost almost nothing to speak to an agent or expert.
Long Waiting PeriodsAs with any “to be determined” project, there can be several years of waiting before the off-plan property is complete. This is expected, as residences take time to build. Off-plan property investment in London may take some time with contracts, workload, and other factors. Once you purchase the off-plan property investment in London, it is yours, but that does not guarantee that the developers will be speedy or have the clearance they promised.
Again, we highly encourage you to contact an expert to minimise the risks.
Reasons London is Perfect For An Off-Plan Property InvestmentFirstly, London is a cultural hub of the United Kingdom, with connections across the mainland and the world. It remains one of the strongest financially prosperous cities in the United Kingdom, with thousands of international investors, students, businesspeople, and tourists filling the vast paved streets.
Growth and Rental YieldProperty investment in London is around £292,000, which is £36,000 higher than the year before. This means that London properties are increasingly more valuable as they reside within the city, which is irresistible to most investors. Off-plan property investment in London tend to grow higher the closer they reach completion as their need grows.
Although London has had a volatile past two years due to the pandemic, 2022 has proven to be a stable growth year for housing, 17% higher than the previous year.
Benefits of Off-Plan Property Investment in LondonOff-plan property investment in London specifically can benefit you in several ways. We have mentioned several ways, but these are more intimately related to the city. This section will be divided into domestic and international investors, though each point can be associated with the other group.
Domestic InvestorsThis is for domestic investors inside the United Kingdom who want to know how off-plan property can benefit them and their portfolios.
Can Be Used as a Let Property
A let property is a property you rent out to tenants. It is one of the most common reasons for off-plan property investment in London. Let properties become a passive income for most investors. With the right property manager and area, you can ensure high turnover for occupancy so you will avoid lapses in payment.
Can Become a Second Home
Sometimes, it helps to escape to London for a month or two, and getting a property investment in London is the best way to do that. If you want to ensure a place for your children or grandchildren to live while they go to university or work in London, an off-plan property investment in London helps you plan for that. Investing in a property that may be built in several years allows you to secure a future home for your immediate or extended family when they come of age, taking the hassle out of finding places to live.
It Can Be Used to Host Business Partners
Having a second residence for your business can be beneficial if you have your first home outside the city. This is because a second home inside the city makes travel out of the metropolitan hub more convenient.
If you are trying to host your business partners from abroad, it can provide immense comfort to them and establish a prestigious look for you if you have a second residence to offer them for their stay. In some cases, it can benefit your business by showing you have the resources to host visitors outside of your home.
It Helps Diversify Your Investment Portfolio
One of the most significant benefits for domestic investors is strengthening your investment portfolio when you start a property investment in London. A diversified portfolio helps you alleviate fluctuations in the real estate market and shows proof that you are a confirmed investor, not a landlord looking for a new residence. A diverse portfolio helps take out bank loans for future investments and gives an air of prestige not found elsewhere.
International InvestorsThis is for international investors outside the United Kingdom who want to know how off-plan property can benefit them.
If you are an international traveller for business, you have had layovers in London or have to travel there often to conduct business. A personal business residence can make working in the city more convenient and enjoyable rather than renting a new hotel room every time. It can also help forward essential clients and partners to your residence instead of meeting them elsewhere.
You can turn your property into a let property when you are not using your business residence or need to put it to use. This provides a passive income stream while leaving your property in the hands of a capable manager to ensure you receive the most profit for your investment.
As a foreign investor, owning a home in a country as famous as the United Kingdom is prestigious in its own right. Overseas properties are excellent for showing wealth and prestige back home. The United Kingdom has an excellent reputation for being a place with law and order and property rights. Having a second home or property within it can pay dividends to your success as an investor.
Similarly, the conversion rate for let properties in London comparable to other international places can boost financial growth.
If you are looking to send your children abroad for school, the United Kingdom has some of the most famous universities in the world. An early off-plan property investment in London can ensure your children have a place to conduct their studies in peace without having to struggle to find new residences to live in that charge extreme rent prices.
If you want your children to focus entirely on their studies and not have to work to pay rent, an off-plan property investment in London can be your solution.
For investors in other countries, having a successful purchase of a foreign property can lead to improved benefits and loans for future investments in your home country. For more information on this, click here to learn everything you need to know about your investment portfolio.
Beginning an Off-Plan Property Investment in LondonTo begin an off-plan property investment in London, you need a property manager with over twenty years of experience in the chosen market. In London, Gladfish Property Investment is the premier real estate investment group to help you ensure rental yields, property maintenance, and portfolio management. You don’t need to invest alone.
Doing everything on your own can lead to disaster. It never hurts to reach out for help, and our agents at Gladfish Property Investment are experts in real estate.
We can discuss new builds and off-plan property investment in London, Liverpool, Manchester and more. Best of all, we provide property management services to help you maintain and protect your property so you can focus on your passions and dreams with a new income stream and prestige.
For more information, get in touch with us here.