Off-plan projects in Spain: choosing the most promising investment

The excavation or “off-plan” stage means that a building’s construction hasn’t started. It’s right after the property developer completes all the required paperwork. At this stage, the workers lay the foundation for the future project. If you want to buy real estate in Spain, whether it’s a finished project or off-plan, then this is quite reasonable. This investment won’t just mean getting a home at a lower price, but also gives choice in some parts of the construction and design. That’s why about 30% of local buildings are sold at this stage.

Content:

• Pros
• Risks
• Rating the best developers in Spain
• The best places in Spain to invest in real estate
• Help to buy property in Spain

Pros

The Spanish property market has been growing since 2012. This has meant more real estate purchases during the initial construction stages. The main advantages of these investments are:

1. Capital growth. Investors purchase properties for sale off-plan in Spain expecting that their prices will increase in the future. These units are more affordable than commissioned ones. It allows buyers to make the most of the income growth when they resell properties immediately after construction is completed.
2. Low initial costs. During the purchase, the investor must pay a certain percentage of the realty price as the contract says. The rest of the amount can be paid later.
3. The right to choose. Off-plan units allow investors to choose the location and floor they want. Also, builders will consider the investor’s opinion in the planning and design.
4. Quick profit. Some developers allow buyers to sell their property before construction is finished. This usually happens when the building has gone up in value and can already make a decent profit.

Risks

Off-plan projects in Spain are considered one of the best investment opportunities on the market. But they come with risks. If the investor doesn’t approach a reputable real estate developer, the following problems can happen:

1. The real estate value will go down. When prices fall, the buyer can pay the rest of the price according to the contract or withdraw from the entire transaction. The investor will suffer losses if they do this.
2. The developer will go bankrupt. In the case of a developer’s bankruptcy, the buyer may lose his initial payment.
3. The property will be sold by the developer after construction is completed. If so, the buyer gets their deposit back. This usually happens when prices rise higher than expected and an unscrupulous developer decides to cancel the deal.

Rating the best developers in Spain

To reduce risks, investors should always choose houses in Spain by developers who have earned their trust with many years of work and high-quality service. The most reliable companies in Spain are:

1. TM Grupo Inmobiliario. The real estate group is based in the province of Alicante. It has more than 20,000 property units sold. Its policy is based on 6 pillars: solvency, innovation, leadership, responsibility, customer orientation, and aspiration to the goal.
2. Alegria Construcciones e Inversiones S.L. is a construction and investment services company based on the Costa Blanca. It gives customers safe homes that meet the highest standards of quality, design and comfort.
3. Construcciones Casiano Tenza S.L is also based on the Costa Blanca. For 40 years, the company has been selling luxury villas in Spain. They use the latest technology and high-quality materials during the construction process.

The best places in Spain to invest in real estate

Location is the most important of all factors that determine an investment’s profitability. In Spain, the price per square meter of housing changes a lot from one region or autonomous community to another. Catalonia, Madrid, and the Basque Country offer the most expensive properties on the market. Buyers on a budget should check on Murcia, La Rioja, the Canary Islands, and Extremadura.

The most cost-effective options can be found in:

1. Madrid. It takes 7th place in Europe with an ROI (return on investments) of 3.9% and high rental income.
2. Alicante. It is in the 2nd place of the same rating in terms of profitability, with an ROI of 4.6%.
3. Barcelona. It takes 11th place in the ranking with an ROI of 2.2%.

Help to buy property in Spain

Many believe that cutting out an intermediary company’s services will help them avoid extra expenses. This is wrong for 2 reasons:

1. Contacting an expert in the Spanish real estate market is the best way to prevent losing money. The agent knows the area and all the pitfalls hidden that foreigners don’t know about. They are ready to explore many options before finding the best one for the client. They also assist the client throughout the transaction.
2. Usually, Spanish sellers pay the commission for intermediary services themselves. Buyers can use these services without spending money from their own pocket.

Contact the experts from Spain-Real.Estate, the largest aggregator, and get the following services:

• consultation on issues about renting and buying Spanish real estate;
• choosing a home that meets the client’s wishes and budget;
• full support during the transaction;
• high-quality after-sales service.