What are the advantages and the risks involved when buying off plan?
The main advantage of buying off-plan property is the discount you receive in price. The reason developers are giving you a discounted price is for the risk you are taking investing with them. With any investment where you hand over the money before receiving the goods there is always an element of risk.
However, the risk should be negligible when dealing with a reputable developer / company. It is of paramount importance to find out about the developer and their previous projects.
The discounts range from between 10 - 30% for an off-plan property in Spain depending on who you are dealing with. It is important to do your homework first. Your first priority must be to find an English speaking lawyer who has your best interests at heart.
Many people think that by dealing directly with the developers, you will save money on your property purchase. This is not always the case. In fact you could end up spending more time & money following this route.
One major advantage of buying off-plan is that by the time the property has been built you should have 18 - 36 months capital growth on your investment.
Estimated capital growth would be about 10% Per Annum of the total value of the property. A 100 000 property over 36 months would have increased its value to 130 000.
So your property investment has already made 30 000 by the completion date. A smart return for your money, I think you will agree.
Another reason why a new property would be the smarter option is the updating and renewal of building regulations and laws. Thus giving you more protection for your off plan property purchase. You also have the added advantage of having a 10 year guarantee against most serious structural defects under Spanish law.
An off-plan property in Spain is still a smart choice for property investor.
