– Buying off plan is a practice that has caught on among Kenyans wanting to own their own homes or invest in real estate
– If you haven’t heard of it yet, this is where you pay for a home before construction, usually during the design stage
– You put down a deposit and pay off the rest in installments as construction continues, then, at the end of it, you get the keys to your new property.
– If you do it the right way, buying off plan can be very rewarding, by earning you massive returns
However, there are some pitfalls you should be aware of, so, to help you navigate, here are some dos and don’ts when buying off plan:
Buying off plan is whereby you pay for a home before construction, usually during the design stage. You put down deposit and pay off the rest in installments as construction continues. Photo: Cytonn.
Source: Original
DO
Do your Research
Real estate ventures can be very costly. Why would you put up a large amount of money in something you haven’t researched? Do some digging.
Ask questions about your developer and the development. Look at how other real estate developments have performed in the area where you want to build.
What are the returns? How long will it take? How much will it cost? Research will help you answer this all important question: is it worth it?
Invest in Prime Locations
In real estate, “prime” could mean different things to different people. You just need to figure out what you want – the bustle of city life or the solitude of the countryside?
Location is everything. Being picky about yours could prove to be worthwhile in the long run. Some key considerations include access to infrastructure, growth in the area and resale value.
Plan Well
When you finally decide to buy off plan, you need to plan for it. Get your finances in order for the length of the project. You need to be able to balance your installments and your other expenses.
Planning will let you know whether you can even afford the project in the first place. It also helps you decide what you will do with the unit.
Whether you are planning to rent, lease or live in the complete house, you must make arrangements in advance so that you can use it as soon as it is ready.
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Consult
A mistake we commonly make is bypassing expert advice because we do not want to pay consultation fees. We may think we are saving money, but failing to consult with various experts before committing yourself could end in disaster.
Expert valuations will ensure you are not grossly overcharged by developers. Have an advocate explain your contract to you before you sign it.
Ask other contractors whether the construction details your developer is promising are realistic. Consulting will save you from committing to an unscrupulous developer.
Inspect
Visit the site regularly during construction. Keep close tabs on the progress of your home. Ask your developer to address any concerns you may have.
Being involved will assure you that your home is on track. You will also be able to flag any potential issues as soon as they arise and have more time to respond.
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DO NOT
Do not Trust Blindly
There are hundreds of developers in the Kenyan real estate scene right now, and unfortunately, many of them are not genuine. It can be difficult to distinguish between scammers and honest companies.
When doing your research, look for information from a variety of sources. Don’t just trust the word of one person, blindly. If a developer is making claims that cannot be verified, stay away.
Do Not Sign a Contract you Don’t Understand
Contracts are legally binding. Once you sign one, you are bound to everything stipulated within it. Do not let excitement over getting a new home override your sense of caution; read the fine print.
It would be best to have an independent legal professional look through the document, explain any unclear areas and help you to address any areas you would like to be amended. Make sure you keep certified copies of whatever you sign.
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Do Not Miss a Payment
Invariably, buying off plan involves making a down payment and then paying the remaining amount in installments.
Depending on the terms of your agreement, failing to pay one or more installments could be costly. Some developers may not offer a full refund and will keep your deposit.
Others may take longer than you anticipate to refund it. Either way, being unable to complete your payments could cost you your dream home, which is why you need to plan your finances to avoid this happening.
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