INVESTING
Getting preapproved puts those buyers in an even stronger negotiating position . However , they still need to be aware of a few potential downsides .
It is probably best to use a bond originator that Is free of charge to apply for bank financing as they handle all the paperwork and know which banks give the best interest rates and also which banks are open for loans .
No transfer duties
Ordinary property purchases are subject to transfer duty and a number of other hefty fees that aren ’ t included in the purchase price . Newly built off plan purchases include VAT – which replaces transfer duty – as well as other certain fees in the price tag .
That means you don ’ t need to budget for those extra transfer expenses which is normally on top of the purchase price as you would have to if you had a second hand property .
New properties appeal to tenants A brand-new property is appealing to potential tenants if you want to rent it out . This also allows the owner to charge a slightly higher rental than a used property .
The quality and ‘ newness ‘ of the property , rental amount , location of property , access and proximity to amenities , security , layout and finishes of a new property are all factors which a tenant considers .
Development is covered by the CPA – no repairs budget The buyer ’ s purchase is covered by the Consumer Protection Act ( CPA ), which will provide legal options if the building does not go according to plan . Being newly built means buyers also don ’ t need to budget for upgrades or repairs on transfer .
Developers are legally required to fix deviations from plan within 3 months of transfer , repair substandard work or defects within a year , and fix any structural defects that emerge within five years .
The risks of off plan developments You can ’ t see the finished
51 APRIL / MAY 2023 SA Real Estate Investor Magazine