Property Investors Need To Be Wary

About Investing In New Build Flats

Property investors and landlords need to be very careful if they are considering investing in new or off-plan property. Research we (Zone 4 Property) conducted this summer showed that many towns and cities are seeing an over supply of new build apartments which is having a negative knock on effect to the landlords and property investors who are buying them.

This over supply of new build flats in towns and cities is meaning that there is an over supply of stock and a lack of demand from buyers. This is pushing down property prices and means that many landlords and property investors are struggling to sell on their investments and in some cases are making hefty losses.

Another problem of this over supply is that landlords may struggle to let out their properties due to the huge competition from other investors who have bought property in the same block.

Buying new build or off plan property on the face of it seems like a very wise investment proposition for property investors. You are buying a new flat early before it is built, are given a good discount for buying early (perhaps with other investors) which means the property will hold instant equity on completion and your sparkly new investment will appeal to the local young professional and corporate let market. Sounds like a good plan? Read on….

But here is the down side…The reality is that many new build flats are simply over priced and the discounts given by agents and property investment clubs are simply not genuine which all means that what looked on paper like an excellent property investment opportunity now looks like a very poor investment which you may struggle to let out and sell on.

Our advice to landlords and property investors is if you are involved with a property investment club or you wish to buy new build property, make sure that you do your due diligence extremely carefully and make sure that there is good rental demand amongst young professionals in the area, get any potential investment independently valued to make sure it is not over priced and make sure that all discounts and incentives offered are genuine.

It is vital that property investors and landlords do thorough due diligence on any new property investment because if they don’t, they could potentially take a rather nasty hit in their wallet.