Buying a house off plan: Opportunities and risks

Buying a house off plan poses additional challenges when compared to buying a property that has already been built. Before moving forward, we must have awareness of the opportunities and risks that we may encounter.Buying a house, whether built or planned, almost always represents the biggest financial investment we make in our life. Making conscious decisions will facilitate the whole process. Read also: How does credit for housing construction work?

The challenges of buying a home off plan

Let’s start with the evidence: buying anything that isn’t finalized carries increased risks. And the most obvious of all is the product that we are purchasing does not arrive to be delivered to us. Another risk we run is that of promise to pay a given price for a property (that’s what you do when you enter into a promissory contract), which is greater than its commercial value when finalized and delivered. Which can be even more risky if you are dependent on bank financing. If you always have these two risks present, the probability of a purchase of a property in plan going wrong should drop drastically. Because the principles we must never forget is that we are making a decision based on: does not exist yet;on one context that can change one, two or three years from now, when the property is delivered. That said, we should try to know as much as possible about the real estate developer, from whom we are considering buying a property, and studying the promissory contract even more carefully.Read more: Are you considering building a house? Prepare for the different stages

Opportunities to buy in plant

Now let’s go to the opportunities to buy a house in plan. The truth is that buying real estate off plan has been, in recent years (in a context of constant appreciation of residential real estate), a very interesting vehicle to generate capital gains within 1/2/3 years. Because as the construction evolves, two things tend to happen: risk reduction of non-completion of the work and asset appreciation (which gradually becomes a safer and more desirable bet). After all, we are talking about a property that has benefited from the latest innovations or technologies, has no use, and has a guarantee. Read more: Want to buy land? Know what to consider Real estate consultant at KW and specialist in the Greater Lisbon residential market, he is the author of the blog A House in Lisbon and the Minuto Imobiliário series. Born in Lisbon and trained in Sociology, he was a manager at BES, signed the blog O Alfaiate Lisboeta, and was a columnist for Dinheiro Vivo, Expresso, Metro and GQ.