Off the Plan vs. Existing Property Investment: Which is Better?

When investing in property in Australia, deciding between an off the plan property and an existing property is a critical choice. Each option comes with unique benefits and challenges, and the right choice depends on your investment goals, financial situation, and risk tolerance.

In this article, we’ll explore the pros and cons of both investment options, helping you determine which is better for your property portfolio.

What is Off the Plan Property Investment?

Off the plan properties are purchased before they are built, often directly from a developer. Buyers rely on architectural plans and renders to make their decisions, with the property being delivered upon construction completion.

ERA Newcastle | Off the plan Newcastle | Secure with $20k and $387 x 146 weeks

Benefits of Off the Plan Investments

1. Potential Capital Growth: By the time construction is complete, the property’s value may increase, delivering immediate equity.
2. Stamp Duty Savings: In some Australian states, buyers can save on stamp duty for off the plan purchases.
3. Customisation Options: Buyers may have the opportunity to personalise aspects of the property, such as finishes and layouts.
4. Brand-New Appeal: Newly constructed properties are more appealing to tenants, often commanding higher rents and reducing maintenance costs.

Rhodes Bay | Off the plan Sydney | Secure with $10k and $528 x 146 weeks

Challenges to Consider

• Market Volatility: Property values may fluctuate during the construction phase.
• Construction Delays: Unforeseen delays can impact your investment timeline.
• Final Outcome Variance: The delivered property may differ slightly from the original plans.

What is Existing Property Investment?

Existing properties are fully constructed homes or apartments that are immediately available for purchase. This includes houses in established suburbs and apartments in built-up areas.

Benefits of Existing Properties

• Immediate Returns: Existing properties can be rented out straight away, generating instant cash flow.
• Established Market Data: Investors have access to detailed information about market trends, historical growth, and rental yields.
• Flexible Negotiation: There is often room to negotiate on the purchase price and terms.
• Prime Locations: Existing properties in well-established areas often benefit from superior amenities and infrastructure.

Challenges to Consider

• Higher Upfront Costs: Full stamp duty and other fees apply to existing properties.
• Maintenance Expenses: Older homes may require costly repairs or renovations.
• Limited Customisation: You’ll have to work with the property as-is, with little scope for alteration.

Key Considerations for Property Investors

1. Investment Goals

• For long-term growth and equity building, off the plan is a great choice.
• If you’re seeking immediate rental income, existing properties are better suited.

1. Budget

• Off the plan often requires a smaller initial outlay, with staged payments over time.
• Existing properties demand higher upfront costs but provide instant returns.

1. Risk Tolerance

• Off the plan properties carry potential risks, such as construction delays or market changes.
• Existing properties are generally more predictable, with fewer unknowns.

1. Location

Both investment types benefit from a strategic location. Growth areas may offer better opportunities for off the plan projects, while established suburbs can ensure steady appreciation for existing properties.

How Coposit Makes Off the Plan Investment Easier

For Australians leaning towards off the plan investments, Coposit provides an innovative solution. With Coposit, you can secure a property with just a $10,000 deposit and pay the remaining balance through weekly interest-free instalments.

This unique approach lowers financial barriers, making off the plan properties more accessible for first-time and seasoned investors alike.

The Residences at Wahroonga Estate | Off the plan Sydney | Secure with $10k and $849 x 102 weeks

Off the Plan or Existing Property?

The decision between off the plan and existing property investment depends on your personal goals, financial readiness, and appetite for risk.

The Edmondson Collection | Off the plan Sydney | Secure with $10k and $390 x 50 weeks

Choose off the plan if you’re focused on capital growth, modern amenities, and potential tax benefits. Opt for existing properties if you prioritise immediate rental income, established market stability, and proven returns. No matter which option you choose, Coposit can help make your investment journey smoother and more affordable.