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Invest in Spanish Property

Although the property market in Spain has slowed down it can still be a very profitable long term investment to buy Spanish Property.

The difference is that no longer is it a short term investment where you can buy off plan and be assured to sell it before completion. However for long term investment (min 5 years) off plan property in Spain is still a very attractive option and can leave you with the benefit of having a nice property at your disposal or getting an extra income for renting it out. Prices of off plan property are still significantly lower than the market values, because developers are still looking to attract capital at the initial stage and therefore sell a number of units at very attractive prices (see also the section Off Plan Property for more information).

It is still possible to re-sale before completion and earn a very profitable return on the investment but a safer way of investing in off plan property is to think long-term.
Due to the slow down in the market it now takes longer to sell a property and some private investors have had difficulties getting their investments sold at the right moment. We therefore recommend only investing in off plan property if you are able or willing to go through with the full purchase of the property in case you are not able to sell before the completion.

Although it is today recommended as a more long term investment it is still important to take into consideration who will be interested in buying the property when you want to sell it again (taking into consideration the price, qualities and location, views and utilities available).
There is also room for speculations like, buying in up-coming areas where there is not much infrastructure at the moment but which will probably change within the next 5-10 years which again will leave an even higher return on investment.

Price

The cheapest price possible is not always the best option. An investor has to think about the potential client when making a decision to invest in an off plan property. The future buyer will normally be someone buying a holiday home or to settle down and they will normally be looking for a two or three bedroom apartment, two bathrooms, good quality, nice views and utilities close by. The price will therefore have to reflect this and it is always better to be able to sell the property rather than buying a very cheap apartment that no one is interested to buy.

Qualities

Because the qualities are important for most people who are looking for a property to settle down in or as a holiday home it should therefore also be important to the investor. It is often difficult to be assured the qualities as the property has not been built before the investor buys it, however, the developer will have a list of qualities, but this does not always tell us what the finished property will be. To make sure you do not get a surprise, it is recommended to purchase from a reliable developer who has done other similar projects where you can see the finished result.

When to purchase a new property

The whole idea behind purchasing off plan is being able to buy as early as possible when the initial prices are still below market value. Although there are still a number of practical and legal matters to take into consideration like making sure the developer have a license to construct, the history of the developer and information about the builders who will construct the property.

Location, Views and Utilities nearby

Although you will have to buy as early as possible and in many cases before the construction has even started, you will still have to take into consideration how the area is going to look when you are ready to sell. Many developments are constructed in new and up-coming areas with an undeveloped infrastructure and no utilities nearby for the first years. Such a development could be a very attractive long term investment as the price of the property could easily double when the infrastructure has been improved.
Another thing the investors have to take into consideration is that there will most likely be other resale properties available in the area. When competing against other resale properties within a new development it is always easier to sell a standard property with good views but it is also important that it is neither the most expensive nor cheapest property.

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