Should you be looking for strong capital growth then investing off plan in suitable properties
in Spain may well be for you.
Most Northern European residents want to purchase a home in the sun and Spain is the obvious choice as it is politically stable, easy to get to and the properties are good value for money. A large number of people have found that their personal wealth has increased through the equity in their own homes or having inherited property and they are using this new found wealth to purchase property in Spain thus ensuring a continued healthy demand for property.
The idea of purchasing off plan is to acquire property at the lowest cost using as little capital as possible therefore achieving a substantial capital gain. To do this you need to know about developments when they are in the planning stage - ideally before even a building licence has been granted. At this stage the developer is keen to sell as many properties as possible but he has nothing to show potential customers except floor plans and artists impressions of the proposed development - therefore he is willing to sell a number of the properties at a very keen rate to get the development going and to show his financiers that it is viable and to negotiate a lower rate for his borrowings.
It is normal for the developer to only release part of the development at this stage as once construction has started and there is something more for people to see then he can realise a much higher price for the other homes on the development. Of course this increases the value of the units already sold.
We identify developments that we consider are very keenly priced and negotiate excellent purchase packages for our investors. We can normally secure homes for a small deposit that fixes the price, then the remaining deposit of 30%, less the payments already made, can be paid during the course of construction and at the end a 70% mortgage is available. Most developers require the full 30% to be paid upfront but because of our track record with off plan developments we can negotiate payment terms to suite the investor. Everything is done through an English speaking solicitor, the developer will have a bank guarantee in place so once the contract is made all payments are secure.
We help a lot of our clients sell on the contract at a considerable profit before completion but you may want to keep your investment, as there is normally a substantial rise in value once the development is finished.
Whilst looking for a home in the in the sun you will need a base and we recommend that you rent a villa or apartment rather than stay in a hotel. You can rent short stay holiday homes at Come2stay and Holiday Home Rentals both of which we can recommend for your stay.
Before visiting Spain we recommend that you have your finance in place or at least know how you are going to fund your purchase.