Did you know that the Spanish property market is on the up? According to a recent report by the Spanish Official College of Property Registrars, a 14.4% increase in property sales was recorded in Q1 2017. What’s more, the price of land is also increasing, particularly in prime areas such as Marbella on the Costa del Sol.
‘Location, location, location’, as estate agents are fond of saying. With Marbella and environs offering beautiful surroundings, wonderful weather and a glamorous lifestyle, perhaps it’s little wonder that investors from all over the world are flocking again to the area.
Owing to strong local demand for high quality new build homes, new developments are being sold off-plan to satisfy demand in and around Marbella. Rather than being a risky investment, off-plan buying should be seen as an opportunity to get a good deal and potentially make a profit when it comes to selling on.
Of course, no property transaction is entirely risk free, however if you take the time to do your research and proper planning, there’s no reason why any potential drawbacks can’t be averted, leaving you to enjoy your new holiday home in the sun.
Here are 7 reasons why buying off-plan may be the best investment decision.
The earlier you decide to buy, the greater the choice of apartments available to you. Whether you prefer to be poolside or have a sea view, a garden or penthouse, buying off-plan will allow you to reserve a property that fits your criteria exactly. Conversely, if you wait until construction is complete, your first choice of apartment may well have been snapped up by a keener, more nimble investor.
2. Discounted prices
The early bird catches the worm. First phase properties will be most attractively priced for a number of reasons. From the developer’s perspective, the motivation is to sell a certain number of apartments in order to secure construction funding from the banks. With that in mind, a lower initial property price will encourage sales, benefitting you as a buyer. Second and third phase prices can be considerably higher, as the sales momentum builds and the desirability of the property development increases among prospective buyers.
3. Spread the cost
Once you’ve paid the initial reservation fee and deposit, you can break down the payments into regular instalments payable at different stages of construction. What’s more, many developers will add special finance deals as an extra sweetener including lower interest rates on repayments and other tempting discounts that make the purchase Early capital growth
With a typical lead time of 9-18 months and stage payments, buyers are able to benefit from capital growth before they’ve paid the final instalment. That way, you can quickly add to the value of your asset. While it is always recommended to have full financing in place, you can also use early capital appreciation to save up for a bigger deposit when the final payment is due, saving on mortgage costs in the longer term.
4. Input into fixtures and finishes
Purchasing a property still under construction will allow you to have an input into the interior décor and sometimes even the layout of the apartment or villa. With the ability to add your own personal touch to your future holiday home, you can really customise the look so that it will feel like yours the moment you move in. Options include choosing the bathroom suite, kitchen design and finishes, carpets and flooring and much more.
5. Developer’s guarantees
Not only will you be the first person to own and move into your property when it’s finished, with a new property there shouldn’t be any maintenance issues to worry about for several years. Spanish developers also offer ‘snagging’ guarantees, meaning that once the snagging agreement is agreed and signed (ideally before completion), they will come and sort out any issues with the property without delay.
6. New, efficient build
New developments, particularly at the higher end of the property market, tend to be built to higher building specifications than previous builds. While you can, of course, update and improve an older property, you’re unlikely to find all the modern touches and latest innovations that a new build can offer. This includes energy efficiency measures that make your new home effectively cheaper to run.
7. Higher rental yield
Perhaps unsurprisingly, brand new Spanish properties are easiest to market and to rent out. Everything is sparkling clean, attractively styled and unused, without any wear and tear, which is what holiday guests as well as longer term tenants are increasingly looking for. Add to that a modern and super efficient building spec and you can see that your new property will command comparatively higher rents.