An off-plan property signifies the buying of a property that is not yet complete. The construction may be at any stage – even at the pre-licensing stage, if you are buying a property that has not yet fully completed in all regards, then it is said to be an off plan property. The demand for pre-construction overseas property, or off-plan property, has seen a steady rise over the past decade as more investors turn to the overseas property market for bigger capital growths. On the face of it, investing in property abroad seems a good proposition, but it’s always advisable to acquaint yourself, as far as possible, about the pros and cons of an unfinished property.

Advantages Of Investing In Off Plan Property Abroad

An off-plan property investment abroad entails a whole lot of advantages to the investor. Some of these include -

The foremost advantage is the price factor. You can avail strikingly lower prices for the undeveloped property. The builders offer these discounts because they need to raise immediate capital for construction purposes. Moreover, it’s always the endeavour of a builder to sell the property during construction to offset any probability of failure to gain from selling it in future. Another reason for builders to offer off-plan property at discounted rates is to obtain better interest rates on their development loans from banks and investors. The price obviously has to be on a lower side for an unfinished construction as the builders have hardly anything to show except for a floor plan and an artist’s impressions of the finished development.

Moreover, even this discounted price is not paid immediately. Normally, the builders ask for 20%-30% deposit at the time of the Sale Agreement, and the balance normally becomes payable on completion of the property. You can easily finance the balance on a 70% mortgage in most countries.

Investment in an off-plan property overseas will, most certainly and drastically, mitigate your capital gains tax liability.

If all the payments you make to a builder are covered by a bank guarantee, it means that anything paid is returned to you should the builder defaults. So, your investment is largely secured by a bank guarantee.

An off-plan property investment gives you a chance to supervise your returns on the property during the construction period as well, which is generally 1-3 years. This way you can realize the profit during the construction period as well, should you require immediate money. This benefit is particularly significant if one considers the small amount invested in the form of deposit at the time of Agreement.

The overseas property should be alluring enough to invest. In other words, the builder must, at least, promise to employ state-of-the-art construction materials and install modern gadgetry to make the finished product an exciting proposition to reap maximum rewards, if resold. Some builders also allow the investor to choose the fixtures and fittings to be installed during the construction.

Disadvantages Of Investing In Off Plan Property Abroad

Though off-plan property investment abroad may seem quite a cheap proposition, it has some pitfalls too. Here are some of the disadvantages you might face in an off-plan investment -

The apparent negative feature of off-plan property investment is the chances of the developer disappearing or going bust. Therefore, it’s extremely vital that you do your homework and research thoroughly the credentials of the developer. If the developer is a well known entity in that particular region, chances are that the deal will be good, but if he is a new entrant in the business, you must be extra vigilant in ensuring that your money won’t go down the drain.

Another risk you will be undertaking by investing in off-plan property is its possible sudden fall in value within the real estate sector. You can never predict the tilt of market forces, and can incur losses if the demand for that kind of property has hit a low during construction.

There is a wide gulf between the projected and the actual product. The overseas builder can easily take you for a ride if he uses inferior or different materials during construction than promised. However, if the developer has a good reputation, chances are that such cheap tricks won’t see the light of the day.

If you are planning to move into your newly acquired possession, then ensure you are flexible with your moving dates. You can never be sure about the precise date by which the construction will be completed. There may be any number of hurdles in the construction process, and during this period, you just cannot pack your bags and hop in your dream home or apartment.

Legally speaking, you are not the actual owner of the off-plan property until it is completed. So, you don’t enjoy all the rights against the property as enjoyed by an owner. Without ownership, the banks may not lend against the property, and therefore, any money required before completion may have to be raised from personal resources. However, these cases are few and far between, most banks will lend the remaining monies in the form of a mortgage secured on the finnished product.

After getting yourself acquainted with the ins and outs of off plan property investment, it’s time to make a decision on investment. If you’ve decided to invest in an off-plan overseas property in Europe, then check out our off plan developments in Spain, Bulgaria, Turkey, Portugal, and Italy. Visit our Off Plan Developments page for a full list of current off plan properties for sale abroad.

When a property is bought before the completion of its building area, it is known as an off plan property. The term “off plan property” is used because the property is bought only by looking at its structural drawings and the plans. The trend of buying off plan properties has become popular over the years. The prime reason behind this is that the purchase generally involves hassle free procedures. As they are newly built, investors are sure that their maintenance requirement will be minimal. UK property investors see off plan property as a potential lucrative part of the property market. In fact, investors are benefiting by buying off plan properties over the years. Important points to consider are; 1) Certainly there are advantages as well as disadvantages of buying off plan properties. The first and the foremost of the advantages is that one can secure a property worth a good fortune with very little investment. Sometimes the layout may be just a few hundred pounds. It is one of the best ways to make use of every penny that one has saved over the years. 2) By buying off plan property one can purchase a property that can have great potential in the future at today’s property prices. You can take the advantage of the capital growth potential if you are careful about the forward pricing. The property can even be sold before its completion for a profit making thousands of pounds. 3) Another advantage of buying an off plan property is that you can make changes in it that meet your own requirements. Though the amounts of changes that can be made depend on the development and the developer, it surely makes the property different from the others in the same development. 4) Before buying an off plan property one should also be aware of its disadvantages as well. As the prices of properties tend to fluctuate the prices of the property may go down. 5) One should also be aware of the fact that the new builds are often overpriced. There are very few real comparisons to ascertain the real price to the property. The mortgage may not be the worth it is believed to be. 6) It is extremely important to make sure that the developer you are dealing with is reputable and financially sound. The most important of all is to make sure there are plenty of owner / occupiers in the development. Otherwise buying in a development where everyone wants to sell or rent out the property saturates the situation that may lead to a status quo. The only way out of this quagmire is to lower the asking price or the rental price, which is a potential loss. 7) There are number of ads on the radio saying that how people who bought off plan property and now are owner of a property, which is worth a million pounds. Be careful, the companies offer 15-20% discount because they get special discount from the developers for bulk purchase. If all the properties in a development are completed at the same time, the buyer can pick and choose and you have to compete with the others to get through the situation. Even if you try to rent the property, which is identical to the other properties, the rent goes notoriously low. Good research is needed before buying an off plan property. Don’t skip this step!

If you are seeking Mallorca property for sale to invest in Spain then beautiful Mallorca properties are best place! There are many good Spanish property firms where you can find suitable Mallorca property for sales that can help you in smooth purchasing. Online Mallorca property for sale in Mallorca, offers the most professional, helpful, friendly and no-pressure Spanish property service to assist you in finding your perfect property in Mallorca. On the internet, you will find a huge collection of Mallorca property for sale, and an equally impressive collection of other Spanish property for sale, in Spain. If you are looking for a Spanish villa, town-house, penthouse, apartment, finca, commercial property or a plot then Mallorca properties are the best option for you. While buying property in Mallorca great care should be taken. If you buy Spanish property from a person you met in a hotel you are asking for trouble, but by some simple common sense rules it is a very straight forward and safe process. Investors should take care that they do not buy a vastly over priced or over valued Mallorca property by studying the local markets before hand, comparing not just the actual price but the location as well. Always, take care that it is easy to get carried away when you are looking Mallorca properties for sale with a fist full of money seeking for that dream Spanish property, so check before you sign anything. Most of the true property in Mallorca is with or without an agent. With the help of a good Spanish real estate agency, the transaction can be completed fastly and with little fuss. Mallorca property is still selling if the rate is right, although it can said that there are not the number of Mallorca property purchasers around as there was a few years ago. Spanish properties are the most demanding place for investing in real estate by the whole world. Before buying property in Spain you should have a sound knowledge of the Spanish property market. The simplest option to find suitable Mallorca property, is to start the process of finding your ideal Mallorca property for sale, and means that within a very short period of time you will receive online portfolios of fantastic Mallorca hot properties for sale, tailored to your own specific necessities. You will easily get a large network of real estate agents in the internet. The majority of Mallorca property agents offer a very good service, but their job is simply to sell you a property in Mallorca. But they doesn’t listen to what you really want and send you only Mallorca properties for sale that match your criteria. They will not work with you throughout the entire Spanish property purchase process and beyond!