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Many properties for sale in Spain are bought off
plan. Buying off plan can be an excellent way to purchase
a Spanish Property. Buying Off plan is attractive to people
who want the following –
clients who are looking to make a capital return their main
priority
clients who want to maximise
their investment returns
clients who are interested
in buying a property for themselves but are not worried about
having use of it in the short term
Off-plan purchases have seen some spectacular returns for
hundreds of people over the last couple of years in Spain.
This is especially the case on the Costa del Sol.
Buying your Spanish Property Off-Plan means reserving a property
on a new development before the property is completed. This
is often before construction has started and on some occasions
even before the 'Licencia de obra' (licence to build) has
been granted. The developer is usually keen to sell as many
properties as early as possible. This minimises the risk to
them and can help obtain better interest rates on their development
loans from banks and investors. To help sell the properties
at this early stage the prices are normally extremely competitive.
This is due to the above reasons and because there is nothing
to show potential purchasers except a floor plan and an artists
impressions of the finished development.
The key to buying Off-Plan lies in the fact that normally
you only have to pay approximately 30% of the purchase price
as a deposit. Often nothing else is needed until completion
of the property, when the rest can be financed on a 70% mortgage.
Many people finance the 30% deposit by releasing equity from
their existing UK property and so do not actually have to
have any liquid cash to take advantage of this profitable
investment opportunity. If you would like advice on releasing
equity or have any other finance related questions please
contact us.
The following factors all help increase the value
of a development during construction.
As discussed above, the developer is keen to sell properties
as quickly as possible so prices are normally very competitive.
Normally when a development is released, a pattern emerges.
i.e. penthouses, corner units and ground floor with private
gardens usually sell first which in turn leads to price rises.
As soon as the main structure of the development starts to
take shape and/or a show home is opened prices normally increase
substantially. Prospective purchasers can see much more easily
what the finished development and individual homes will look
like.
As the developer starts to sell more and more properties the
original prices will continue to increase. This means that
if you wish to sell your property it will be worth more.
Once the development is finished you will be the owner of
a brand new apartment/house in a new development with beautiful
gardens and a pool. People who want to buy at this stage are
usually prepared to pay significantly more for a property
they can move into or rent out immediately than they would
have paid for just a plan on an a piece of paper and a plot
of land.
The above explain why prices should normally increase as
a development is built. It is not uncommon for a property
to be bought and sold again before a single brick has been
laid, and even sold again several times before final completion.
If you would like us to find an appropriate off plan
development for you please contact us on:
info@cityinvestments.co.uk
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