Distressed and repossessed properties for sale on the Costa del Sol
Distressed and repossessed properties for sale on the Costa del Sol
Owing to the steep decline of the property market in Southern Spain and the UK, many owners who have bought off plan properties in Andalucia find themselves in an impossible position.
The situation is confusing for buyers and sellers, and particularly for people looking to move to the Costa del Sol. Conflicting points include:
-People are still making lots of money from off-plan investments on the Costa del Sol.
-People buying off-plan properties are making little or no profit on the Costa del Sol.
-The market on the Costa del Sol is strong and is still increasing by over 10% per year.
-The market on the Costa del Sol is saturated with off-plan investors attempting to sell before completion.
The truth is that all of these statements are true – depending on the location and purchase price of the property.
Five or six years ago, many investors made fantastic profits from buying properties off-plan, before they had even started being built, and then flipping them (selling them on)before completion. This is not always the case and owners are increasingly having their properties repossessed by the developers when they cannot complete on the purchase, or selling on at well below their original purchase price to try and claw some money back.
With increased internet and television publicity, off-plan investment was easy to understand and became easily available to the general public who may have previously never considered buying property in this way.
The off-plan concept was to buy property with developers offering a discounted price if the investor exchanged at planning stage (before being built). Many investors bought with the sole intention of selling 2 years later at an increased price of approximately 20-30%. With investors only paying 30% before completion, returns were very profitable. The benefits of the investors selling before completion were that tax and completion costs, could be avoided.
However, with so many investors trying to sell properties in each development, at the same time, the market became saturated on that particular development. This results adversely on their selling price. Therefore, many investors have now decided to keep their properties and let them out, and gain some income to go towards the mortgage costs. The properties can then be put up for sale when the market picks up and the vendor will achieve a better price.
This means there are a wealth of distressed and repossessed properties for sale on the Costa del Sol.
In many cases, investor´s circumstances may have changed drastically and, in most cases if they cannot complete the payment on their properties, the developer will not only repossess the property but also keep the 30% deposit which the purchasers will have paid at the outset.
As always, there are two sides to every coin, and there are now many bargains to be had in and around Marbella and the Costa del Sol, which is quickly becoming a buyers dream. Often properties are selling for up to 30% less than their market value, and with 80-100% finance available, buyers are starting to flock back to the Costa del Sol.
A distressed sale does not mean there is a problem with the property, but simply that the vendors need to sell quickly for financial or personal reasons. English speaking lawyers are also on hand throughout Marbella and explain all of the ins and outs of buying property in Spain. Many of the distressed properties are now built with occupation licences and can be viewed immediately.
When a developer completes a project, he has no alternative but to foreclose on uncompleted sales. Occasionally, units which have been repossessed by the developer will come back on the market. As the developer will already have retained the original 30% deposit from the buyer who has been unable to complete, he will often let the repossessed units go at the same price as they were 2-3 years previously. These properties, particularly in Marbella, are an investors dream, and usually sell within weeks if not days.
This is the perfect time to invest in Marbella, and there are hundreds, if not thousands of bargains to be had.
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Owing to the steep decline of the property market in Southern Spain and the UK, many owners who have bought off plan properties in Andalucia find themselves in an impossible position.
The situation is confusing for buyers and sellers, and particularly for people looking to move to the Costa del Sol. Conflicting points include:
-People are still making lots of money from off-plan investments on the Costa del Sol.
-People buying off-plan properties are making little or no profit on the Costa del Sol.
-The market on the Costa del Sol is strong and is still increasing by over 10% per year.
-The market on the Costa del Sol is saturated with off-plan investors attempting to sell before completion.
The truth is that all of these statements are true – depending on the location and purchase price of the property.
Five or six years ago, many investors made fantastic profits from buying properties off-plan, before they had even started being built, and then flipping them (selling them on)before completion. This is not always the case and owners are increasingly having their properties repossessed by the developers when they cannot complete on the purchase, or selling on at well below their original purchase price to try and claw some money back.
With increased internet and television publicity, off-plan investment was easy to understand and became easily available to the general public who may have previously never considered buying property in this way.
The off-plan concept was to buy property with developers offering a discounted price if the investor exchanged at planning stage (before being built). Many investors bought with the sole intention of selling 2 years later at an increased price of approximately 20-30%. With investors only paying 30% before completion, returns were very profitable. The benefits of the investors selling before completion were that tax and completion costs, could be avoided.
However, with so many investors trying to sell properties in each development, at the same time, the market became saturated on that particular development. This results adversely on their selling price. Therefore, many investors have now decided to keep their properties and let them out, and gain some income to go towards the mortgage costs. The properties can then be put up for sale when the market picks up and the vendor will achieve a better price.
This means there are a wealth of distressed and repossessed properties for sale on the Costa del Sol.
In many cases, investor´s circumstances may have changed drastically and, in most cases if they cannot complete the payment on their properties, the developer will not only repossess the property but also keep the 30% deposit which the purchasers will have paid at the outset.
As always, there are two sides to every coin, and there are now many bargains to be had in and around Marbella and the Costa del Sol, which is quickly becoming a buyers dream. Often properties are selling for up to 30% less than their market value, and with 80-100% finance available, buyers are starting to flock back to the Costa del Sol.
A distressed sale does not mean there is a problem with the property, but simply that the vendors need to sell quickly for financial or personal reasons. English speaking lawyers are also on hand throughout Marbella and explain all of the ins and outs of buying property in Spain. Many of the distressed properties are now built with occupation licences and can be viewed immediately.
When a developer completes a project, he has no alternative but to foreclose on uncompleted sales. Occasionally, units which have been repossessed by the developer will come back on the market. As the developer will already have retained the original 30% deposit from the buyer who has been unable to complete, he will often let the repossessed units go at the same price as they were 2-3 years previously. These properties, particularly in Marbella, are an investors dream, and usually sell within weeks if not days.
This is the perfect time to invest in Marbella, and there are hundreds, if not thousands of bargains to be had.
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