CategoriesReal Estate

BUYING OFF-PLAN. THE PROS AND CONS (Part 2)

Continued from the last edition

Buying a property that is non-existent is not for the faint-hearted. The idea of parting with hard-earned money when brick is yet to be laid is difficult to chew; therefore there is need for a substantial amount of bravery and trust to be in place. Before making a decision about whether or not to buy off plan, it is important to consider some of its benefits and pitfalls:-
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PROS OF BUYING OFF-PLAN DEVELOPMENTS

• Lower Purchase Price
Buying off plan allows buyers invest into a development very early and secure it at a much lower price than usual. There is an advantage to paying upfront for a property that is still being built rather than paying when it is fully constructed as the savings could be quite substantial. Sometimes, some developers need to sell many units ‘off the plan’ before they can begin/ continue construction. Without the initial financial investments of subscribers buying ‘off the plan’, the developer may not be able to complete the project. Hence, developers are able to offer attractive prices and discounts to those who invest early in the development.

• Returns on Investment (ROI)
Buying off plan developments can provide buyers/ investors with large amounts of capital on their initial capital outlay over a relatively short period leading to accelerated wealth growth and capital gains which in turn means good returns on investment (ROI) as the market value of properties appreciates after a period of time. Some buyers can also opt to sell a property before it is completely built for a tidy profit, but in most cases require the permission of the developer to do so.
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• Ease of Payment
Although unique to each country, developers require payments in installments from their buyers throughout the period of construction. Typically, a certain percentage mostly between 5-20 percent is required as an initial deposit and/or reservation fee, followed by other split deposits to be paid up until completion. This is favorable to buyers since they do not have to pay the entire purchase price of the property in a one-off payment.

• Preferred Choice
Off-plan buyers who subscribe at the early stages of construction usually benefit from selecting the best available units on the development. Depending on the developer (as some might not be so accommodating), they might also have the opportunity to make certain modifications to their selected units like having customized fittings, restructuring or redesigning of the floor plans, personalized finishing of units, etc bearing in mind that additional cost which might accrue would be borne by them.

• Side Attractions
It is important to note that for off-plan properties to be attractive, the fundamentals must be high and favourable. Invariably, large developers are professional enough to construct in current or up-and-coming hotspots ensuring optimum potential for high returns on your investment. They often times have already researched proximity to infrastructures including modern amenities such as schools, medical services, recreational facilities, public transport and places of interest or natural beauty. Buying an off-plan property situated close to modern infrastructure will in the long run increase capital gains

• Availability of favourable mortgage facilities
Some developers will offer pre-arranged mortgages as part of the off-plan deal. No one is obliged to take this mortgage, although it may save the buyer who decides to take a mortgage some arrangement costs and hassle.

• Tax and Other Incentives
Purchasing a property off plan comes with a number of financial incentives. Buyers of new developments are given certain tax breaks that they wouldn’t receive from buying an old or existing structure. Furthermore, since age plays a factor in insurance matters, buildings bought ‘off the plan’ will save you a large amount of money on home insurance and other costs. Despite the fact that there are no real property taxes in Nigeria, home insurance is available thus investors in Nigerian property may save on home insurance costs if they buy off-plan properties. Developers on some occasions offer special incentives to entice customers to purchase their products off-plan. For instance, buying a property worth a stipulated amount can come along with a luxury car, an all expense paid trip to choice locations etc.

Fine and Country enjoys guiding her clients along their off plan investment journey. Fine and Country is pleased to introduce the Adler residences, an off plan project and opportunity currently up for grabs! Adler Residences is a high-end luxury family – friendly living opportunity with proximity to everything required for an exclusive experience within the La Vida right at the heart of Lekki phase 1, by the end of Admiralty Way, off Freedom way.

Significantly improve your lifestyle with easy access to all key business and leisure districts – Ikoyi, Victoria Island and Lekki.  From choice of Malls to the beautifully styled floor plan and refined ambience, Adler Residences deftly sets the scene for the experience that awaits you. Adler residences pairs modern architecture with innovative landscaping to create a refreshing lifestyle that changes with the seasons. A flexible payment plan of 25% initial deposit and balance spread over 18 months is also available.

(To be continued in next edition)

This kind of medication is used to treat people with pulmonary hypertension a type of high blood pressure in your lungs. Using a guanylate cyclase stimulator along with Cialis may cause your blood pressure to become dangerously low. An example of a guanylate cyclase stimulator is riociguat Adempas. revatio This medication can be used to treat pulmonary hypertension PH that happens in your arteries of your lungs pulmonary arterial hypertension or PH that happens due to a blood clot in your lungs.

CategoriesReal Estate

BUYING OFF-PLAN. THE PROS AND CONS (Part 1)

What is an Off-Plan development?
In recent times we have been inundated with newspaper adverts, bill-boards, sponsored ads across social media, radio jingles talking about off-plan sales of developments both locally and internationally and the benefits of investing in off-plan developments. So what exactly is an off-plan development?

An off-plan development is a development that is being sold before it has been fully constructed or completed. Most times, all there is to the development are its renderings, pre-construction developments documents, and property plans which have been generated by the architect. A visually appealing story is then created around the development along with its offerings and facilities and then marketed to property investors, property speculators and buyers by the real estate developers and/or marketing firms. Early adopters who purchase properties in this way do so with the hope of making substantial capital gains. This is possible because most developers offer off plan properties at special discounts.
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The demand for off-plan properties from developers continues to remain strong due to the fact that one can purchase a property at the current market price and enjoy capital appreciation in a strong market when the development is completed or after a few years. People are becoming increasingly aware of the gains of property investments and are taking a dive towards it especially with the “off-plan” concept. There is also an added value of having flexible payment options in the course of construction period. With so many new developments on offer now and in the years to come, this question pops up, “is purchasing an off-plan property a good idea?”

Buying off-plan in a market where prices are depreciating can put your investment at a greater risk. However, buying a property off-plan and getting it right can be extremely rewarding. The idea of parting with hard-earned money when construction is yet to begin is quite difficult to convey to prospective investors therefore there is need for a substantial amount of bravery and trust to be in place. Before buying off-plan, there are several processes that should be observed.

Engage in thorough research

It is important as with any property purchase to find out the most essential information before making the decision to buy for instance, who is the developer? What is his reputation? Where is the location? Is it secure? Is it close to basic amenities? What is the rental value for such a development in that area? What are local property prices in the market? Get an information pack/ brochure of the property; get all the relevant off-plan details and go for an inspection if possible or take a good look at the models. Ask all the questions, as you do not want to be left in a vulnerable position in the nearest future.

Engage the services of a professional real estate firm

When acquiring properties especially in off-plan developments, be sure to engage the services of a professional real estate firm. This would help minimize the risk of bad investment as they would help you in making the best decisions.

Ask questions

Ask relevant questions to determine what is covered as part of the purchase price, for example, what fittings, floor coverings, painting and decorating is part of the package and what is additional.

Obtain guarantees of the developer’s financial status written into the contract if possible, to avoid encountering financial complications with the developer

Ask to see the developer’s balance sheet to determine their financial strength as there is the risk that if the developer goes into liquidation before the property is finished you may lose your deposit and other costs.


• Make certain to arrange the appropriate finance for the property purchase well in advance.

• Discuss your expectations for the property with your developer and have them written into the contract to avoid disagreement with the developer at the completion of the project.

• It is important for the buyer to arrange for a surveyor’s valuation of the property. The financial company lending the buyer will require the surveyor’s report after an offer has been made.

• The earlier you get access to the property for sale, the greater your chances of securing the bests units on offer. Make a reservation for your chosen property and pay the reservation price (if necessary) having discussed with the developer the available options, pricing, contract agreement etc. You may also be given the option of re-modifying your house, make changes to finishes and fixtures etc. since it is off-plan.

• Next step is to exchange legal contracts. Carefully review the contract with a legal professional and take note of the completion date and penalties that would be obtainable if the developer exceeds the completion date and if you withdraw from the contract. This is very critical especially in this part of the world where there are no policies protecting investors. In Dubai for example, plans are being made to release the Dubai Investor Protection law which allows a full refund of paid amount to investors if the developer fails to complete or handover a property within a certain timeframe from date specified in the sales contract, deliberately defrauds an investor or alters the specifications of the unit without obtaining requisite permission. Laws like this protect the investors and ensure that both parties (developer and investor) benefit mutually from the development.

• Pay the initial deposit (make sure that a legal professional or real estate advisor is present for guidance and to minimize your risks). Other payments follow subsequently as agreed in the contract.

• Conduct a survey (also called snagging) some weeks before final completion. Check the property for defects just to be sure everything is working as planned.

• Final stage is completion and handover of unit to buyer by developer.
(To be continued in next blog post)

CategoriesReal Estate

Commercial Properties; The devil is in the detail

The Commercial real estate space is quite dynamic and requires expertise of the processes involved, as it is clearly more complex than leasing a residential apartment. However, too many corporate tenants take it for granted and end up making huge mistakes as a result of not following and understanding due process. To help minimize potential risks and other costly errors associated with this, we have compiled a list of some of top 5 mistakes corporate tenants make when leasing commercial real estate.

1. Beginning the negotiation of a renewal or new lease too late.

Delayed negotiation of a renewal or new lease is one of the biggest mistakes we see corporates tenant make. In simplest terms, if you wait until your when your lease expires before you start speaking to your landlord about renewing your lease or before you start looking for a new space, you may have a hard time finding exactly what you need especially in a competitive market.

2. Competence and Expertise.

Many corporate tenants go into lease agreement process without properly having adequate and required knowledge and as such, they have made lots of mistakes that have impacted their business negatively. Lack of knowledge combined with time pressure usually causes corporate tenants to make wrong location decisions without being aware of all the choices. This will sometime result in errors that cut into their profits and/or increase financial exposure. To guide yourself, consider getting the services of a commercial real estate advisor to walk you through the process and confirm that a space will meet your current and future needs.

3. Commercial Lease Clauses- the devil in the detail

There is usually a lot of documentation as well as clauses in a commercial lease contract that are mostly in favour of the landlord. It’s therefore important to understand what those clauses mean and how they can they positively or negatively impact your business. Most times your real estate advisor/legal team can help you understand these and negotiate clauses that will be more in your favour.

4. Focus On Strategy, Not the Transaction

Whenever there’s a need for a company to move to a new development or to renew their lease, in the excitement of ensuring the transaction goes on smoothly, corporate strategy is often neglected. All negotiations tend to focus only on the major financial terms of the lease agreement and as a result, the impact of the transaction on the portfolio strategy is easily forgotten, important terms like rent review, expansion and contraction rights seem to have low priority in the leasing process.

5. Do not underestimate the time the process will require

The inability of corporate tenants to understand the time process required often results in companies having to stay longer in their existing premises and may negotiate a soft lease renewal with the landlord. A successful relocation transaction time process should include time for a site analysis and property selection, negotiation, executive approval, legal documentation, fit-out, relocation, etc. All these processes need to be completed within the remaining period of the lease and if not the landlord will demand compensation as entitled as per the terms of lease.

 

CategoriesReal Estate

SOCIAL MEDIA AND REAL ESTATE (Part 2)

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LinkedIn
LinkedIn is a great social media application that connects professionals around the world. Real Estate professionals are therefore able to connect and acquire the services of one another through this tool. These could include Real Estate professionals, Real Estate Marketers, Developers, Architects and other active players.

• YouTube
YouTube is a video-sharing website that Real Estate professionals can use to showcase their properties online through the use of 3D videoettes which gives a clear view of the properties and can reach potential buyers in different parts of the world. It has the added merit of providing the client with a first-hand virtual feel of the property.

Zoom
Zoom is an app that provides video-telephony and online chat services through a cloud-based peer-to-peer software platform and is used for teleconferencing, telecommuting, distance education, and social relations. This app has become the go-to for most corporate organizations, as a result of the covid-19 pandemic and its effects on normal physical gatherings prior to the pandemic. Real estate professionals can now hold meetings on zoom with their respective clients.

• Instagram

Instagram is a photo and video sharing social networking service app that allows users to upload media that can be edited with filters and organized by hashtags and geographical tagging. Posts can be shared publicly or with pre-approved followers. Users can browse other users’ content by tags and locations and view trending content. Users can like photos and follow other users to add their content to a feed. This is an extremely effective marketing tool for real estate professionals today as luxury properties can be showcased on Instagram.

Blogs
A real estate blog offers great opportunity to continuously post information rich in content about expertise, specialty and professional work. Entertaining, educative, exciting and useful information will attract an audience with similar interests.
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The social media is a powerful marketing tool and a good source of making and retaining clients and building relationships. In the last seven years many real estate companies engaged in developing and selling houses, service apartments, service plots, corporate office space etc. have taken advantage of the social media to market their products, share listings, tours and showings, lend expert advice, rebrand their products or even test the acceptability of their products in the market. Several payment plans and value added services have been circulated via social media networks by many Nigerian companies to increase their market share, stimulate customer interest in their products as well as develop new products tailored for each segment they choose to service. Above all, transactions have been closed by real estate professionals with clients locally and internationally as a result of the effective and efficient use of social media.

The core goal of real estate pros utilizing social media is to attract sellers looking to list their homes or buyers looking to purchase homes. Naturally, the use of social media for real estate is for setting up pages on social networks that fit your company’s content and audience.

While an occasional listing may be appreciated by your social media community, many experts advocate engaging your audience with industry knowledge and an expert perspective, rather than alienating users with irrelevant information. There are so many factors that must align to make a listing pertinent to a single customer, such as pricing, location and size. As a result of this, there is a high probability that most listings might not pertain to most people in a given social media audience.

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