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Buying off the plan can seem like an exciting—and convenient—way to secure your next investment property… but is it as safe as it sounds?
In this TPC Gold snippet, Bryce and Ben unpack what every investor really needs to know before signing on the dotted line for off the plan apartments.
Because while not all developments are dodgy, the risks are very real—and the consequences can be financially devastating.
In this episode, you’ll learn:
- Why not all off the plan apartments are equal (and what separates the good from the risky)
- The key questions to ask about developers, builders, and architects
- Why company structures matter (and how they’re used to dodge accountability)
- The hidden costs of ownership—like inflated body corporate fees and low sinking funds
- How to push for buyer protections like price guarantees and valuation clauses
The result? A better understanding of what makes for a sound off the plan investment—and what to avoid at all costs.
Want to Protect Your Next Purchase?
Before you sign anything, do your homework.
Better yet, let us help. Our team at Empower Wealth offers qualified property planning and buyer’s agent services to help you avoid common traps and invest with confidence.
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If You Enjoyed TPC Gold | Buying Off the Plan? What to Know Before You Sign, You Might Also Like:
- Ep 257 | The Exception To The Rule When It Comes To Off The Plan Properties & House And Land Packages
- Ep 311 | The Dummies Guide To Strata Properties & Body Corporates
- Ep 538 | Property Spruikers 2.0: The Latest Tactics Designed to Trap You
Transcript
Bryce Holdaway
Here’s some of the research that people need to be thinking about if they do want to buy some of these buildings. Because I think the important point to consider here… you talked about it (and) you touched on it already, not all buildings are rubbish.
Ben Kingsley
No, the vast majority are fine.
Bryce Holdaway
That’s right. So we’re talking about the outliers, but it’s a confidence issue with these outliers that are coming up. But a couple of things… When you are wanting to buy something like this, you’ve got to investigate the design and the documentation. So the best thing to do is find out who is actually going to build this particular property and not only that, have they got a track record? And have they done anything before and has it stood the test of time? Because the basics of business are that two entities can make decisions; a human being can make a decision. A trust can’t make a decision, but a company can. But what that does is it affords them legal protections that you need to be aware of. Don’t be naive to that. So if you are buying from a company that has a solo company that doesn’t have any trading history and they’ve got a history of jumping… just be aware that there’s very little protection if something happens. You talked about it before. So make sure you know who you’re dealing with and go and have a look at some of the projects they’ve done in the past, and maybe just have a chat to some of the people that have been involved in some of the projects in the past because they should be prepared to tell you.
Ben Kingsley
I agree, Bryce. I mean, the thing for me is like, if I was looking at it, normally if it’s off the plan, they’re going to say “architecturally designed by X”. Right. Well, what’s the first thing I’m going to do? I’m going to go to that architecture (firm). I’m going to go to their website and it should have a series of all of the projects and developments that they’ve done, that they’ve been involved in, some of the awards that they’ve won. If I don’t have any of that and it’s a Legoland building, then I mean, you know what we feel about those buildings. They are shocking investments. They are terrible. It is just mass-produced rubbish. So if you’re ever going to be looking at what makes for a building that could get capital growth… If the architect’s an award-winning architect and it’s quite unique.
Bryce Holdaway
It needs some uniqueness about it.
Ben Kingsley
Yup, owner-occupier appeal built all around that.
Bryce Holdaway
Because we get people writing to us and say, you guys are so anti off-the-plan. Well, because 99% of it we are. And we are the first to admit there are some exceptions. Absolutely there are some exceptions.
Ben Kingsley
So the developer can sometimes be a public company. How are they going? How are their profits? Are they building in that company name or have they set up a silo company in the event of issues? Now we have seen Canberra has also been experiencing some fast builds for profit and the challenge with those guys… one of them made good. So it was a national company and it was an eight-million-dollar remediation work that needed to be done. So the challenge with that was they came good. So that’s what you want. Like, all right, we’ve made a mistake here. Our builders have done it or whatever. That’s the big bit. So remember… you get the architecture, the plans and you look at the builder and you look at the developer. Have they got a proven track record? Is everyone happy with that? You get through that stage and that’s the first thing.
Bryce Holdaway
The second thing, Ben, is to realise that after you’ve moved in… everything’s shiny, the carpet smells great, the taps are looking awesome (but) what are the ongoing costs to live in these properties? Because you can have a fully paid off apartment Ben, and be paying costs that still make you feel like you’ve got a mortgage. Because one of the things as an investor, I always say to people that if you’re buying something that has got a body corporate involved (whether it’s a townhouse or whether it’s an apartment or whatever), always look for the rent return after body corporate spend so that you get some parity of comparison. Because you might have something in the same street around the same price getting the same rent, but the rental yield back to you can be really significantly different because one has got an exorbitant body corporate or on the positive side you might have one of the body corporates that are actually being proactive (and) they’ve thought 10 years in advance. They’ve actually got a capital works program and they’ve put it in place so that they start to build up some of that sinking fund so that they don’t have to go back to the owners later and say: oh look, we need to do some maintenance on the building. So there’s this balancing act too because what happens is if I’m an owner and I’ve been contributing to that sinking fund, as soon as I sell it I’ve got no access to that, it’s an asset of the building. It’s not an asset to you even though you’ve been contributing to it.
Ben Kingsley
Correct.
Bryce Holdaway
So it’s a delicate act of making sure you get the optimum there.
Ben Kingsley
Mate, well summarized. The next one we want to look at is in terms of the guarantees, right? So you mentioned it earlier around what’s involved in that process. And I think it’s when I’m sitting down and if I’m thinking I’m going to buy something off the plan… it’s like what insurance policy are you going to give me? What is the builder’s warranty? Are the developers willing to give me more confidence around that? I’d even be arguing in these current times, you could potentially even get a guarantee in your negotiations for buying… price guarantee. So in other words, if I buy this today and it doesn’t stack up in terms of a bank valuation in 18 months’ time, will I be able to void my contract? If they are supremely confident, then they should do that right? I’ve been advocating that for a long time. I don’t like the idea that someone pays $680,000 for an apartment and then at completion it values up at $600,000. There’s $80,000 in paper losses. I don’t think that’s fair and reasonable. And the buyer at the moment is in a position of strength. There’s a lot of supply of apartments out there. If you want to win my business, then ultimately you know, these are the types of negotiations that we can do.
