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Buying a unit offplan
- Thread starter Dolby
- Start date
Your paying the deposit fixes the price at the current price.
Pro: In theory if you are buying for R1mill now you could sell for a higher price once the place is built. There are a bunch of costs involved and it depends if the property market goes up in the 2 years but on paper you should make a profit. I think it's known as 'flipping' properties. I think the deposit is held with attorneys so that if the developments doesn't get built you can get your money back.
Con: I bought off plan once, not to flip the place but to live in it, my experience was that you should be prepared for lots of surprises but in the end it should work out OK. The surprises range from late completion to fittings not being the ones originally agreed etc.
Pro: In theory if you are buying for R1mill now you could sell for a higher price once the place is built. There are a bunch of costs involved and it depends if the property market goes up in the 2 years but on paper you should make a profit. I think it's known as 'flipping' properties. I think the deposit is held with attorneys so that if the developments doesn't get built you can get your money back.
Con: I bought off plan once, not to flip the place but to live in it, my experience was that you should be prepared for lots of surprises but in the end it should work out OK. The surprises range from late completion to fittings not being the ones originally agreed etc.
Turiko
Banned
Surprises also extend into shoddy building work and finishing off. And geysers that pop within 12-18 months. Oh and the shortcuts 
On my house the builder saw it fit not to install a latco valve. So the idiots at Joburg water cut the water, 3-4 hours later geyser element becomes dry as entire geyser empties into water main. Cost me R700 to get a plumber to replace entire frikken element.
On my house the builder saw it fit not to install a latco valve. So the idiots at Joburg water cut the water, 3-4 hours later geyser element becomes dry as entire geyser empties into water main. Cost me R700 to get a plumber to replace entire frikken element.
slayerza
Senior Member
I agree that the shortcuts is often really shocking, thus fat my experiences have been good but then again having been buds with the developer does help in terms of the complaint department.
When they start to build the unit, spent some time on site, every day if possible. Complain about everything that is not up to standard. It is sometimes shocking to see what builders feel is fine, but will be plastered over afterwards.
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stoke
Honorary Master
In 2 years? Forgetaboutit. The risk is way too high.
What surety are these developers providing where they protect you from taking 200 years instead of 2 / Disappearing with your money?
What surety are these developers providing where they protect you from taking 200 years instead of 2 / Disappearing with your money?
Dolby
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They've built about 80% and people starting occupying a year back. Also reputable partners (Group 5 etc).
Also, what prevents me buying 5 units now for R20,000.00 each? And only paying R100,000.00 for all that property in 2 years? They check me now to see if I can afford? Or then?
Also, what prevents me buying 5 units now for R20,000.00 each? And only paying R100,000.00 for all that property in 2 years? They check me now to see if I can afford? Or then?
W@P
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The quality of work on complexes and units these days are shocking to say the least, If you put down the deposit and the idea of buying and then renting it out is your case then i see no problem with delays as it give you more time before biting the bullet and signing the bond assuming you are doing it this way and it also lets the property appreciate in value all the time not costing you anything except the initial deposit.
What you should do is get the guys that specialize in inspecting of complexes and town houses out to the unit once completed but before signing off on it. They do inspection on build work and build quality and check to see if all is in acceptable condition. It will cost you a couple of bucks but its better to let the developer fix all these things before you hand over your money to him as this will save you allot along the way.
What you should do is get the guys that specialize in inspecting of complexes and town houses out to the unit once completed but before signing off on it. They do inspection on build work and build quality and check to see if all is in acceptable condition. It will cost you a couple of bucks but its better to let the developer fix all these things before you hand over your money to him as this will save you allot along the way.
W@P
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It is possible to buy 5 units only paying R100,000.00 in deposits but you must secure a bond for each of them before they are rightfully yours/banks.
The bond must be in place and the deposit must be payed, just remember if you decide to sell them once completed and you went the bond route you have to either get them occupied asap after completed or you carry the full repayments until sold or rented.
There was a site in CPT that was not going well. e.g. Units had white carpets fitted BEFORE the paint and plastering of the walls where done. Owners kept visiting the site and making complaints. The developers, still legal owners until completion, got a court order preventing owners from visiting the site. Eventually the owners got together and sued the developers for their cash back. The complex stood unfinished and un-workedon for about a year until the legal mess was sorted out.
If you get the credit for all the units you have the risk of not being able to sell them in two years time and then you'll have to be able to pay the bonds on them. The NCA should prevent you from over extending yourself though. People used to do this, pay deposit on 10 places and sell them just as work finished, and lots made lots of cash. When the property market slowed many where bankrupted because they couldn't sell the places and even though they could find tenants the rent didn't cover the bond.