Cheap property or ‘cheap’ property purchases are not uncommon in off plan property purchases. The appearance of cheap prices which makes the property seem affordable is a marketing effort to make the price of the property seems very affordable. There may be no discount offered but just something that makes the whole thing seem very inexpensive. You may be offered all sorts of ‘value added’ items such as a rental guarantee for perhaps up to 3 years! As well as no stamp duty, no legal fees, furniture pack, letting fees paid and a tenanted property. This all sounds wonderful to an investor.
However, every property purchase must have the actual property cost, legal fees, finance fees, reservation or sourcing fees, stamp duty tax (if applicable) and other completion costs. So whatever is being masked by the appearance of a cheap price will eventually have to be accounted for by your solicitor on the completion statement. Added to that, you’ll probably be paying any off plan sourcing fees in advance of the completion so that these fees won’t appear on the completion statement. In any event, the mortgage company will need to know the true value of the property.
It may be that you will have found a bargain but the advice is to do your research and ascertain what the true value of your investment will be. Remember, the profit is in the purchase price.
Return from Cheap Property to Property Clubs