Friday, August 16, 2013
Guaranteed Losses if you pay too much
If you pay too much to a developer when buying off the plan, no matter how good the location, and how good the development, you will loose money. Often, developers will show you beautiful brochures of the facilities in the location (all true) and tell you rents are higher in this location than others (again true) and that it is a popular, closely held area (true again), and then try to sell you an apartment that is 20% above market value. If this happens, you will likely suffer a capital loss. See this story for example about capital losses in a bullet proof area. Investors looking at SouthPoint at SouthBank, which is a brilliant location and looks to be a quality development, should take notice of this warning, particularly when prices are more than $10,000 a square metre.