Hi

Not interested in buying anything - I'm just getting going with low cost selling as an agent in Egypt on the Red Sea - no real costs to drag me under.
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As I keep saying - investors should only buy off plan if zero (or minimal) funds required until full handover of fully built property to include all promised infrastructure.

Better still, only buy fully built property and forget offplan all together.

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Been investing abroad a few years. Always amazed people invest in places that produce just a few months rent per year

If everyone followed your advice there would be nothing for anyone to buy.

Every developments needs some cash flow to keep going.

If any developer has so much money to waste he may as well put it in th bank and settle for 7% profit with no risk or employment for any workers.
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This view also will deny potential risk takers from gaining substantial profit from big discounts during building stage of a development.

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Lending is 50% down in the UK.

Only one specialist lender is still actively lending in the UK (GE Money, with rates typically around 9%).
All the dozens of others have either closed or are just managing thier existing mortgage customers. Specialist lenders took about 35% of the market 1 year ago.
Now millions of people cannot access the mortgage market as a result.

Buy to let lending has declined by 85% and rates are around 7% which means the rent will usually only cover the debt on loan to values under 75% now.

Americas 2 largest lenders are on the brink (Fannimay & that other one with an equally odd name)

The crunch is real - 4000 mortgage brokers have left the CML register in the last 12 months and that figure is expected to treble. Industry stats released last week show 4 out 5 mortgages are arranged by brokers, so do not think this statistic is unimportant.

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Been investing abroad a few years. Always amazed people invest in places that produce just a few months rent per year

Everyone wont follow my advice, but smart investors should not get involved with funding developers little money making adventures that may or may not deliver.

Fadesa of Spain for example made all sorts of promises when they sought eagre buyers, but now the products have been delived in a terrible state with showers that go cold if you turn on a kitchen tap.
This is the problem with offplan, you just never know what will be delivered.
Fadesa are struggling financially which is a real example of why one should not part with any cash until the product is delivered. The Banks could pull the plug on them any moment.

One method that to an extent aliviates the going bust worry, is where developers sign over the land plot when the deposit is made. Ive seen this done in the Bahammas and Carribean. At least that way the investor owns something if the developer goes bust.

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Been investing abroad a few years. Always amazed people invest in places that produce just a few months rent per year

It is not that you dont give good advice sometimes, but other times it is, well i fell you forget which Blog you are on

I wholeheartly agree that there are a lot of bad deals out there that give the cutomer limited protection and have limited obligations to the developer, and there are inherant risks in buying off plan. Any developer selling to the UK will be fully aware of all the insurances and protection methods for clients and will accept them as part of the deal if he is a genuine developer. If they dont and the contract is not balanced, then your head should tell you to walk away. Although even then not everyone is a crook and that is what should be remembered!! If you are unhappy with the contract, but like the development ask to speak with the developer directly, or via your lawyer and see what happen, if they value your custom and listen to your requests then....

Anway to your points:


Only buy deals where you pay nothing until all work is completed???

So, reserve a property at todays prices, without putting money down and only pay when the builder, at his own expense and no security builds a property for you and completes it?
Show me where these deals are and i will buy ten.



or 'Dont by off plan property???

A good developer, that offers total protection to a client and builds out in two years will be selling at least 50% more for the same property when it has been built and when it is off plan. Full stop

what so, dont take advantage of the better prices and potential capital gains and developers offer?

Your strap line says something like " i have invested in years and made loads of money"

Obviously very very slowly, if you follow your own advice.

Investy,

As you probably know Fadesa have gone under, leaving half finished projects such as Costa Esuri, planned to have over 2,000 properties in all. Obviously, the promised facilities won't materialise and for those poor unfortunates who have already bought, what chance of resale ?.

Fadesa has gone into administration but that does not mean that they will not finish current developments
Any buyers should of courses take Spanish legal advice to protect their interests straight away and establish the exact position of the development on which they have bought

This is not the first in Spain or other EU countries in the current economic climate and that applies to UK also

But also it does not mean that all developers in EU including Spain & UK will go into administration and provided you do your research, get good advice and a bank guarantee for your money there is no reason why anyone should not buy off plan, if they have decided for life style reasons that time is too short to wait to improve their quality of life or they just need a holiday home in the sun

Whatever anyone may say about Spain , it is easy to get to, lots sun and good food and medium to long term for life style buyers it should turn out to be a good investment

The predictions are for the market to be slow for 18 months or so and start to pick up again circa 2010....next boom circa 10 years....bit like UK.....although if the price of oil keeps falling you never know!!!.......this economic slow down may only be short lived

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Brian Rowlands BSc FRICS
Chartered Surveyor & Overseas Property Agent
www.bbspanishproperties.co.uk