Reply To: Buying Off-Plan – Inland Developments

#58464
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