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The concept of buying off plan (before the property is built) is not new - many investors have done it before in UK and abroad. However, this trend is on the increase as more clients are beginning to realise the benefits of buying overseas property off plan.
Buying off plan means reserving a plot or a specific property abroad at the initial stage when the plans are approved. It the opposite to buying a re-sale or just newly built property. At each stage of the process significant investments are required from the developer. A small percentage of the off plan properties for sale are offered at a discounted price to the investors to secure the bank guarantees or gain the market confidence in the project. Investing in property abroad e.g. up and coming areas of Spain (Costa Calida, Almeria and Costa de la Luz) and in particular Turkey and Bulgaria is becoming increasingly popular as they offer larger financial rewards.
Smart investors are getting to know about the new developments launched at the very early stage and pick and choose the best possible prices and properties. As a general rule the prices are going up during the period of construction by at least 10% when the construction commences, foundations are laid, when the rough works are finished and when the complex is completed.
As many off-plan developments last for a period of 12-24 months, the investor with a little financial outlay secures the price and in most cases enjoys a healthy capital growth if he/she chooses the right development.
A reservation fee is normally required when you buy a property off-plan; it varies from country to country and could be in the region of €1,000 to €6,000 (£700-£4,000). It is deducted from the next instalment to the developer, which normally in 3-4 weeks after the reservation and in the region of 10-30%.
In Spain and the Canary Islands (Tenerife) and Cyprus mortgages can be easily arranged for the outstanding amount on completion. As the property appreciates in value it is often possible to arrange 100% mortgages in these countries and take out the cash invested to enjoy the capital growth. In emerging markets of Turkey and Bulgaria this is not always the case, as finance arrangements are not as flexible and as a general rule the payments are expected during the period of construction in stages.
In some instances the final payments are not required, if the investor decides to sell the property before completion. On a good quality luxury complex the prime location property re-sells to retired people or people looking to permanently relocate to Spain and cannot wait 2 years for the property being built.
Buying a property abroad off-plan does not necessary guarantee a good capital growth, as a lot of overseas property buyers/investors found out the hard way in Costa del Sol. Things to bear in mind are:-the maturity of the market in the specific area you are looking to invest, the prices (how does the development compares with the local market prices), the quality of the development and of course the location and size of a specific project: As we are not tied to any specific developer, not to mention the country, we could give you impartial advice as to where to buy. We are UK agents for selling property abroad (Spain, Turkey, Bulgaria, Cyprus, Tenerife) with UK standards.
Property Gems is an independent property overseas UK agent that offers properties for sale throughout Spain, the Canary Islands (Tenerife), Cyprus, Turkey and Bulgaria.
Buying off-plan takes courage, but is financially rewarding. Prospective purchasers should bear in mind that property with a good investment potential sells extremely quickly (in the emerging markets of Bulgaria and Turkey within days of the new complex releases). Reserving the plot before you travel could be the best way to buy homes abroad. We as your UK overseas property agents will point you in the right direction and assist you to choose an investment project that would provide the best returns. We work hard to only handpick the developments offering high returns and best possible security.
Our off-plan investment property portfolio in Spain, Turkey, Bulgaria, Cyprus and the Canary Islands is constantly changing, in order to keep up to date please subscribe to our newsletter.
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