The Property Banks Buying Pre Construction Properties
Buying a house pre-construction?
Not as crazy as it may sound. “Pre-construction” purchase is
becoming more and more popular as investors seek to maximise their
returns.
This method of buying has seen phenomenal profits for the purchasers
over the past few years in many major European Countries. So what
does it mean and how does it work?
Fundamentally, buying “pre-construction” means just that. You
reserve the property of your choice on a new development before the
construction is completed, often before it has begun, and in some
cases before the developer has been granted the licence to build.
So what is in it for me?
Rock bottom prices! Because you are being asked to purchases an
architect’s drawing and an empty plot of land the, the prices are
meted accordingly. In addition, normally you would have to pay 30%
of the purchase price as a deposit and then nothing more until
completion which can then be financed by a 70% mortgage, if you have
purchased the property as an investment, prior to the completion of
the property, Property Link Direct Ltd or the Builder / Developer
will have resold the property, therefore enabling you to have made a
very handsome profit on your original investment
Pick of the crop
Buying pre-construction, gives the purchaser, first choice of
individual properties on the development. Usually when a development
is sold, the penthouses, corner units and ground floor apartments
with private gardens are the first to go.
Up, up and away
As construction begins and the development takes shape, or perhaps a
show home is completed, the purchase price
is increased substantially as other prospective buyers with less
imagination than your selves can see what the properties look like.
Gift wrapped
Once the development has been completely finished, other interested
parties are naturally willing to pay more for the completed
property, with their gardens, pool, and decoration rather than an
empty piece of land with cement and rubble. A question springs to
mind. Would you buy a property that couldn’t be used for 18 months?
The answer to that being, YES, because you’re a wise investor with
hindsight and imagination.
Be gone Mr Taxman
An added bonus is that if you sell the property before or on
completion, i.e. Before you take possession of the title deeds there
is no Capitol Gains Tax to be paid no matter how much profit you
have made. Some of our recent purchasers have made almost 200%
profits on their original investment.
What’s in it for the developer?
At the time of pre-construction the developer is enthusiastic to
sell as many properties as possible to minimise his risk and
negotiate lower interest rates from their investors. This being the
case the properties are all priced notably competitively at this
time.
Just remember that a 30% deposits is often all you need to invest in
pre-construction. Many release this by releasing the equity in their
own property by re-mortgaging. One borrows the money at a relatively
low interest rate and accredits it to an investment paying a
considerable higher rate. You do the maths!
Buying a house pre-construction?
Buying “Off Plan” property in the the European Communities can be a
great investment with outstanding returns in a considerably short
period of time.
Purchasing a property 'Off Plan' does not means just reserving a
property on a new development before the property is completed or
even in some cases before construction has started. It means that
the buyer becomes the actual owner of a future property by investing
approximately only 30% of the property value at the present time.
It has been seen that this value may increase by at least 25% by the
time the development is completed, thus becoming a much better
investment than dealing with an already finished property. On the
other hand, if you are not looking for a property as an investment
but rather as a holiday or permanent home an “Off Plan” property has
its advantages as well:
Firstly, when a new development is released the prices are generally
much more competitive than market prices, as the developer are very
keen to sell as soon as possible, in order to obtain better interest
rates from banks for their development loans. Secondly, when people
begin buying from a development, usually the best properties are
sold first, i.e. penthouses or corner units, these are the ones that
increase their value much more.
Finally, when final completion is achieved, you will be the owner of
a brand new property.
Obviously there are some issues regarding buying a property “Off
Plan”. It is possible for up to a two year construction period can
elapse before the completion of your property, also the intangible
aspect of the investment, as you will only see your future property
through Architect drawings and plans.
Many governments enacted a law whereby, all down payments made
before the completion of the property/development have to be secured
either by bank guarantees or insurance policies. It is important to
check with your solicitor to ensure that these assurances have been
provided for.
Developers are restricted by several laws; what, when and how the
offer of their product is conveyed to the prospective purchaser.
The Property Link Direct Ltd Guarantee has been developed to make
purchasing off plan safer, and more transparent for you the
purchasing Member.
We feel that in a world wide market place such as this, where almost
no industry standards or expectable normal behaviour exist. We can
make a difference, if not for everyone, we can certainly change
things for our members when entering into the uncertain but exciting
world of off plan investment where you need as much protection as
possible. This we aim to provide, our Guarantee also insures that
you receive the correct level of service and attention from your
Property Link Direct Ltd Membership.
1. All the points laid out in the Property Link Direct Ltd seal of
approval should be adhered to at all times.
2. Our level of service to you the member will reflect the level of
service you would expect from a company of our stature.
3. We will protect our members rights and financial situation to the
best of our ability at all times.
4. Payments made through Property Link Direct Ltd via our online
payment facility will be protected and our online payment rules will
be observed at all times.
5. We promise to inform our members immediately of any changes to
the offered product, price or development that we feel will effect
the member in any way.
6. All contracts offered to Property Link Direct Ltd members will be
agreed first by Property Link Direct Ltd any obvious defects or
discrepancies will removed before publication on the site.
7. All descriptions and illustrations of developments offered by
Property Link Direct Ltd will be clear and correct our members will
be informed immediately of any changes or delays to any Property
Link Direct Ltd development.
8. We undertake to maximize our members investment to the best of
our ability at all times.
9. We supply any relevant brochures and information that is
available on any of our developments on request at all times.
10. Property Link Direct Ltd will never charge its members for any
of its services Property Link Direct Ltd will receive a commission
from the developer this commission will never be added to the
purchase price by us but will be a integral part of the purchase
price.