Off plan investors are getting in BEFORE the ground floor is even built. It is early stage investing — the kind traditionally only available to insiders and institutions. When the project is still in the early stages and developers are working “off the plan” instead of with completed model units, you have an unparalleled opportunity to score significant gains. Proper due diligence and risk management – and careful selection of the right partners and consultants — maximize potential ROI.
Why is this kind of investing so interesting to so many people? For comfortable earners who have already covered the basics, property is the next logical step to a diversified portfolio.
How do you judge the merits of a project? Make sure to ask questions about these factors:
Diversification. Off-plan investing is a great way to diversify your holdings in terms of asset class AND geographic risk. But don’t make any assumptions. Be sure that the project you’re looking at isn’t just putting some of your eggs on the other side of the same basket.• Risk vs. Profit opportunity. Off plan investing makes you an insider – but it exposes you to new types of problems. You shouldn’t expect to earn outsized gains without additional risk.
Tax efficiency. Making money is one thing – holding on to it is even harder. People promise you the world when they are trying to sell you an off-shore investment, but the fact is that laws and regulations are in constant flux. Make sure to investigate all of your options in advance. Once you’ve sold, it’s too late to start planning a tax strategy.
Currency. International investment means a wide range of currency options – and the headaches that go with it. Many international investments require you invest in a currency you don’t plan on ever using. Make sure you understand the ins and outs of currency and exchange rates.
Bangkok Asset works with property developers and property investors to provide professional management and due diligence. You need to do both top-down and bottom-up analysis of your project – and your team. Bottom-up means starting at the very basic level and moving up to the general. You’ll want to know about the local economy, the rental and resale markets – and at the quality of the people doing the actual building and management. Once you’re satisfied, move up to the next link in the business model and find out everything you need to know. Top-down analysis starts by looking at the most general assumptions possible and then getting more and more specific. We start by looking at the broad economic, political and financial environments, and then gradually becoming more focused on the nuts and bolts of our project.