BUYING OFF THE PLAN
MARKET
- Land purchase price
- Research population growth
- Research employment opportunities
- Research infrastructure spending (public and private)
- Research recent capital growth, average annual growth
DEVELOPER
- Pre-purchase feasibility
- Contact local real estate agents
- Contact other acquaintances- both industry insiders and outsiders
- Research developer track record – Google/ASIC
- Research previous developments – Google
- Visit previous developments
- Surveying
DEVELOPMENT
- Legals
- Check proposed completion date and sunset clauses
- Are deposit bonds accepted?
- Check body corporate fees, depreciation, etc
- Check number of sales – query with developer as necessary
- Check valuation against open market
- Check outlook, aspect of property, fittings, car spaces
- Check approvals in place (with developer)
- Check council records for nearby proposals
FINANCE
- Council rates
- Confirm borrowing limit
- Check for government incentives for off-the-plan
- Apply for deposit (if necessary)
- Work out budget – including holding/mortgage costs, depreciation, tax rebate
- Agent’s commission
LEGALS
- Conveyancing fees (sale)
- Negotiate incentives (rent guarantees, furniture packages, etc)
- Seek legal advice over contract
- When contract finalised, sign and put down deposit/deposit bond
- Loan interest
PRACTICAL COMPLETION/COMPLETION
- Contingency amount
- Ensure 10% buffer in place before completion
- Apply for finance
- Check property is as promised – valuation will also do this
- Seek alternative valuation if comes in low
- Seek tenants
- Settlement: get finance; pay deposit (if deposit bond used); tip in remainder if
valuation low
DEVELOPMENT EXPENSE CHECKLIST
Keep this exhaustive list handy to ensure you anticipate all potential development costs
PURCHASE OF LAND
- Land purchase price
- Stamp duty on transfer
- Stamp duty on first mortgage
- Finance establishment fee
- Conveyancing fees (purchase)
CONSULTANT COSTS
- Pre-purchase feasibility
- Town planning
- Working drawings
- Engineering
- Soil test
- Building permit
- Surveying
- Legals
- Project management
CONSTRUCTION COSTS
- Pre-rental repairs
- Demolition
- Construction
LEASING FEES
- Agent’s commission
- Advertising
RATES AND TAXES
- Rates and taxes Council rates
- Water & sewer
- Land tax
- Other rates or taxes
SELLING FEES
- Agent’s commission
- Conveyancing fees (sale)
OTHER COSTS
- Electricity contribution
- Drainage/sewerage contribution
- Loan interest
- Contingency amount
PROPERTY LOCATION CHECKLIST
- How long will it take to travel to different places (work, CBD, etc) during peak hours?
- Is the house conveniently located near schools, medical and emergency services?
- Is there adequate public transport in the area? If so, what type?
- What other facilities/infrastructure are available locally?
- Does the area have a preponderance of low, medium or high-density housing?
- What is the property’s level of privacy?
- What is the property’s level of security?
- What are the council’s future plans for the area?
- What development work is taking place in the area?
- Are there any flight paths over the property?
- Is the property located near busy intersections or heavy traffic roads?
- Did you get an independent valuation?
- Have you talked to real estate agents about going prices for units/houses in the area?
- Have you checked the local newspaper for asking property prices?
- What are the recent sale prices of similar properties in the area?
- What are the price movements over recent years? Does this represent good growth?
- Is demand for similar properties in the area weak or strong?
- What developments are planned for the area? Ask the local council.
- Talk to the neighbours – does the price seem right?
- Have you checked median prices and average value growth for the suburb?