Buying Off-Plan – Inland Developments

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This topic contains 7 replies, has 5 voices, and was last updated by Profile photo of Anonymous Anonymous 11 years, 5 months ago.

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  • #51155
    Profile photo of Anonymous
    Anonymous
    Participant

    I’ve been reading a number of threads on this forum relating to the pitfalls of buying off-plan property but all the threads have been in relation to property on the coast, particularly the Costa Del Sol. I am considering purchasing an off-plan property on an inland development in the Murcia region.

    I am happy to buy off-plan as I can wait 18 months for completion and like the idea of getting a property that is cheaper than the “market value” for a comparable property. However, even though I am buying the property mainly as a holiday home for my own use, I would like the additional comfort of seeing some decent appreciation on the value of the property over the next couple of years as well as feel confident that I could obtain some rental income from it.

    Does anybody have any opinions (or preferably some facts) on buying off-plan and the state of the rental market for an inland location?

    I’m trying to weigh up all the options because I don’t want to be stuck with a property that I can’t sell (should something unforeseen happen) before it is completed.

  • #58459
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi

    Ime afraide you will open up a can of worms asking your question , as all replys will be of various experiences and can be off putting.
    I have , and am still buying two off plan properties at the moment .Although to be honest it has been a nightmare , getting it all sorted . It now seems after 2 years to be falling in place.
    Just go for it , but use a good solicitor , and have a check made of the building company involved .

    Good luck

    Mike

  • #58460
    Profile photo of Anonymous
    Anonymous
    Participant

    Whereabouts in Murcia are you buying?

  • #58463
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi

    If you have read my recent posts you will gather we are having some issues at our off-plan development.
    I agree with others, a good lawyer is absolutely essential, to check over the original contract and to deal with future issues (they WILL arise)
    It seems unlikely in mine and others experiences that the development you buy in will be completed on time, ours has been 2 years now and although a very small development….still not completed.
    Make sure you get an AVAL – bank guarantee from the builders bank in case they go bust, this protects your money paid.
    The wait seems very wothwhile when you sign up….not so great as time goes on and the stresses of problems arise.
    If you wish to send a PM I will give you contact info for our lawyer, he was recommended through this site and has proved an absolute star!

    Good luck if you decide to go ahead

  • #58464
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi there Vroom

    As you can see already buying off plan can be fraught with frustrations, most of thepoints have been mentioned here. One point I owuld make though is that a lot of developers now have cottoned on to the fact that people are buying off plan for investment and so are inflating the prices somewhat.

    Whereas buying off plan was a sure way of increasing your investment now it can leave you with a hite elephant – not in all cases but I would choose your development very wisely I have seen 3 developments locally (North Costa Blanca) go up and the properties are worth less than the buyers paid for them 2 years ago – the prices were jacked up by 25% or so by the agents and the market flattened out about a year ago – some of these people bought with the sole intention of buying to sell before completion – and are stuck with having to find a mortgage.

    It would be wise to check on further developments because if there is another 1000 homes going up for example – you would have 1,000 competitors if you decided to sell.

    You also mention that you will be buying inland and want both rental income and price increase.

    All this depends on many factors. Firstly is the development you are buying into a good investment – read above – and are you buying it at below market price (do your homework or employ a buyers agent to help you – NOTE not an estate Agent and not someone tied to either an agency or a developer)

    Buying off plan is supposed to mean you get a better value house – so you should get a good deal compared to other properties in the area.

    Secondly rental incomes. When people go on hooliday they tend to want to be by the beach – Unless you have a pool. Although the tide is turning for inland rentals it is still difficult to find holidaymakers who will go too far inland (bear in mind the majority of holidaymakers dont even hire a car and expect to be picked up at the airport and dropped off)

    So your market inland is limited to start with – so I wouldnt rely on earning too much to cover much – maybe your running expenses. If you are going to buy to let then you need to consider
    1. Distance to the nearest airport – no more than an hour.
    2. Distance to the beach (even though they probably wont visit the beach in my experience they will still want to be in striking distance – about 30-45 mins is suitable
    3. Distance to main motorways
    4. Distance to nearest towns
    5 Distance to amenities

    What you may want to offer is speciality breaks – get away from it all – then you would have to market your property accordingly. It is not the same as sticking an advert in saying – villa costa blanca sea views, pool etc. You need to place it where those type of people will look – so homework again I am afraid.

    There is also a glut of property on the rental market in Spain so you need to choose your area carefully – ask yourself would you go on holiday here and then ask would you go there if you had a small family?

    Hope this helps and good luck in finding your place.

    Regards and best wishes

    Vince Barnes

  • #58467
    Profile photo of Anonymous
    Anonymous
    Participant

    Thanks Vince, you speak a lot of sense.

    I am aware that the rental market is more limited inland and I agree that a more specialised “get away from it all” approach would work very well. I’m viewing any rental income as a bonus anyway.

    The nagging doubt at the back of my mind is that because of the number of developments being built inland now (PolarisWorld particularly) we may find that inland developments will soon suffer from the same problems of over-supply that is affecting property prices on the coast.

  • #58468
    Profile photo of Anonymous
    Anonymous
    Participant

    Thanks Vince, you speak a lot of sense.

    I am aware that the rental market is more limited inland and I agree that a more specialised “get away from it all” approach would work very well. I’m viewing any rental income as a bonus anyway.

    The nagging doubt at the back of my mind is that because of the number of developments being built inland now (PolarisWorld particularly) we may find that inland developments will soon suffer from the same problems of over-supply that is affecting property prices on the coast.

  • #58469
    Profile photo of Anonymous
    Anonymous
    Participant

    I’m doing a report on Murica at the end of the month. Report available here online in August or September.

    Mark

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