Off-Plan Buying is the Better Option With Right Timing

I recently received an email from a client inquiring about off-plan property that we introduced last year. The client was curious and wanted to understand how the concept works and its benefits to her as an investor or homeowner.

The concept of off-plan is simply a property before a structure has been constructed upon it. These pre-constructions are usually marketed to real estate developers and to early adopters as developments so the purchaser can secure much better finance terms from their lenders.

Property investors or property speculators like to purchase property in the hope of making substantial capital gains. This usually occurs because developers who offer the property for sale off-plan often offer financial incentives to early adopters, in the form of a discount in response to the sale plan.

Now, in a rapidly rising housing market, in places like Nairobi and its environs, buying off-plan enables investors and homebuyers to buy a property at a lower price than when they wait for the construction of their chosen property to commence.

In addition, buying off-plan may be the only way to get a property with a specific location or set of features as choices may be limited once construction starts.

In order to purchase off-plan property, investors have to approach the project developers. Without the actual physical building in sight, the developers will have to make a sale based on the location of the property and its aesthetic and sophisticated designs.

Once the investor is convinced about the property and its value, he/she needs to deposit only the off-plan price which is sometimes 30% to 40% of the purchase price. The rest of the price is payable after the project is complete and this has enabled many people in Nairobi own homes.

Choosing the correct project that has the possibility of higher gains at the right time is a major step with respect to off-plan projects. If the project promises greater gains in the near future, it’s worth would skyrocket. Hence the buyer has to purchase the project at an accurate time.

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The rise in a project’s capital value will also depend solely on the locality. If major projects such as transportation or universities are going to be built in the locality, the property’s worth will likely increase.  For this reason, investors need to thoroughly check the area’s profile before making the purchase.

As the construction begins to take shape, the value of the units begins to increase. A completed show home is normally available for viewing at this stage and buyers are taking less of a risk as they do not need to rely entirely on plans.

Increasing Property Value

As more units are sold, the price of the remaining units rises. Units sell faster when buyers are able to physically see them. There is often a phased payment structure in place which mirrors the increasing value of the property.

To the early investor, this means that if you decide to sell your property, it will be worth considerably more at this stage than when you made your initial purchase and paid the deposit.

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Mr Andrew Muhiu, a real estate specialist and the director of Banda Homes Limited. Email: