8 Reasons Buyers are Investing in Shell Property over Vacant Land
8 Reasons Buyers are Investing in Shell Property over Vacant Land
When it comes to property investment, one of the key decisions buyers face is whether to purchase vacant land or invest in a partially completed property, such as a shell home. While both options have their merits, buying a shell property offers buyers flexibility and cost control, making it an increasingly popular choice, particularly for those looking to build in secure, well-established estates.
What is a Shell Property?
A shell property is a partially constructed home where the basic structure is complete, but the interior has not yet been finished. This typically includes the external walls, roof, windows, and doors, but excludes internal finishes such as flooring, cabinetry, tiling, fixtures, and final paintwork.
1. Visual Clarity of Design
One major benefit of purchasing a shell home is the buyer’s ability to physically walk through the space and envision how it will look once completed. Unlike raw land, where investors have to imagine the layout and views based on plans, a shell property gives buyers the option of real-time spatial planning and visualisation of the finished design. The shell structure already exists, making it much easier to decide where to place furniture, how to optimise views, and what finishes to apply.
2. Customisation of Design
Shell properties give buyers the freedom to select their own finishes and personalise their home where it matters most. This not only gives buyers exactly what they want in the final look and feel of the home, but also means a quicker timeline for moving in.
3. No Construction Inconvenience
With shell properties, all the major structural work is already done, which reduces the wait and construction inconvenience associated with new builds. Shell structures limit the presence of heavy construction vehicles and the associated noise, dust, and inconvenience that come with large-scale building projects.
4. Avoiding Raw Land Costs
While buying vacant land may seem like a cost-effective option upfront, it often comes with unforeseen expenses. These can include high rates and taxes to be paid on the vacant land, security fencing, ongoing vegetation management, and the risk of illegal dumping or occupation.
5. No Need for Geotechnical Studies
There's also the need for essential studies, like geotechnical investigations, to assess soil conditions - vital information that determines if the land is buildable or requires costly engineering solutions. Spending money on a basic geotechnical investigation and report for raw land is essential to ensure that the land can be built on, without the need for excessive ground improvement or foundation solutions. Shell properties don’t require this as it’s developer’s responsibility.
6. No Zoning Complications
Zoning complications are another common issue with raw land, not experienced by investors of shell properties. Many buyers are unaware that the intended use of the land may not align with its current zoning regulations – and relying solely on an estate agent’s word can lead to disappointment. Additionally, restricted site access from main roads, other planned developments on the perimeter, or the presence of protected vegetation such as Milkwood trees can delay or even prevent development. Investors should always consult the municipality for official Scheme Clauses and Environmental Assessments, and ensure they’re buying from reputable developers.
7. Lower Risk and Financial Limitations
Investing in raw land, especially at the early stages of a new development and in new neighbourhoods, carries risks related to the developer’s financial stability and the future of the area. Without reliable infrastructure or assurances that the development will be completed, buyers could be left with depreciating, un-serviced land. Furthermore, banks are generally hesitant to grant loans using vacant land as security, limiting the financial flexibility.
8. Immediate Returns
A developed or semi-developed property in a well-established estate that has existing utilities such as reliable electricity, water, and sanitation services will protect the buyer from risks and costly oversights. A property investment in a developed estate can also be rented out immediately, offering a revenue stream that may offset bond repayments. Over time, the equity built in a well-located, finished home can also be leveraged for future investments. For those without development experience, buying into a secure, managed estate offers peace of mind, thanks to vetted developers, good infrastructure, and long-term growth potential.
*Information provided by the publicist. Property and Estate Managers looking to advertise are welcome to e-mail howzit@iloveza.com
