“Off-the-plan” purchase is made by an investor for a purpose, the following are some of the reasons :

1. the investor has a plan to own a number of investment properties in a future time line. The plan may be to generate capital growth and passive income over time from these properties. For example, the investor may need to increase one more property in his/her portfolio in 24 months time. The investor would then contract into an “off-the-plan” property now to settle in 24 months time. The alternative is to wait till 24 months and go to the market at that time to purchase a property which may be priced higher. The investor may understand that buying “off-the-plan” now provides certain advantages such as “better price” and “a more powerful choice”.
2. “better price” – often developers price their “off-the-plan” sales benchmarked to prices competitive at the time of release of the “off-the-plan” sales, as they desire to reach determined target sales to propagate funding and market support for the project. However, with annual rising construction and labour cost and inflation, property tends to be more costly in future. The “off-the-plan” price may have risen at the time of completion.
3. “a more powerful choice” – the development that is selling “off-the-plan” now, especially in the initial release period may have the best choices for floor plans, and aspects which may be sold out at completion. For the investors, the best entry price or affordability range may be obtained at this time and not later on.
4. Be ahead. For example the property settles in 24 months time. The investor has done his/her Investment Analysis. He/ she ascertains that with 90% funding from the bank and tax savings, $200 a week is required to hold the property. The investor is now 2 years ahead of settlement and starts to save $200 a week now for the property. When the investor obtains title to the property in 24 months time he/ she has a 2 year headstart of personal savings to fund the investment. The investor creates a 24 months working capital / safety buffer.
5. Using existing equity. Investors often have their jobs or business and at the same time invest in residential properties. While they work hard on their business and job, they engage their equity (in properties they already own) to also work hard for them. Investors could extract funds or finance from their existing property to place a deposit to secure an “off-the-plan” property. They created a new property from their equity.