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Off the Plan Units – Buy Wisely


Paul McKenzie
Paul McKenzie

Whether it's an off-the-plan residential apartment, commercial, retail or industrial strata unit, you should do sufficient research before you buy. Such an acquisition, either residential or commercial, can be a dream come true or a nightmare on completion. It all depends on the level of research, checks and balances.

First of all, location is paramount, whether it's residential or commercial. You want good access to public transport, shopping centres, cafes, hospitals, universities/tertiary education colleges - in a suburb with a good profile, with good sale and rental prices for units. A good profile suburb has good infrastructure that the government is upgrading to ease traffic and is not too far from the city. Also, a suburb where a Westfield shopping centre is located, that is being expanded and upgraded, with an exciting range of cafes, ambience areas and specialty shops.

Secondly, make sure the units and development scheme are built by a vendor/developer with a good long-term track record of quality building, quality units, good strata scheme facilities (foyers, lifts, common courtyards, gyms, pools, basement parking etc) and good post-settlement relations with unit owners on defects services. If the vendor/developer has owners of units in other strata complexes across Sydney and other capital cities who are complaining about the poor quality workmanship and shocking defects, these are warning signs "Not to Buy".

Find out from other unit owners in the other strata development projects completed previously by the vendor/developer. What are they saying about the vendor/developer's quality, workmanship and defects service?

Whether residential or commercial, make sure you with your conveyancer/solicitor goes through the contract carefully, checking the details of the unit, the list of inclusions, the sunset date with any extension, as well as the provision of vendor/developer rights to make changes, especially on the reduced size and the changes to fixtures/finishes of the unit, on completion. It's very important that you are clear, comfortable and confident of what the off-the-plan unit you are buying is going to look like upon completion - with the design, details, and finishes - to make sure that your dream becomes a reality.

On completion of construction, it's very important that the vendor/developer has put through the registration at the Land Titles Office, receiving the Occupation Certificate, triggering notice for settlement, that you do your pre-settlement inspection to make sure that unit you bought off the plan is your dream come true, not a nightmare.

Vendor/developers earn a good reputation with unit buyers when they complete projects early or on time, build with quality, with pride in their workmanship and provide great defects service through their project manager and newly appointed strata manager. The vendor/developer's agent should provide good post-settlement service on the handover, providing packs with keys/tags, and details on strata management, the complex facilities, and the 60 to 90-day post-settlement defects reporting period.

If buying off the plan for investment purposes, you should speak to your tax accountant about what's best for you - direct investment with negative gearing tax benefits or investment through your self-managed super fund. Your tax accountant should also advise you on tax depreciation benefits and how to get a tax depreciation schedule/valuation done to claim such benefits.


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