Five reasons to buy overseas property under construction

Buying property at an early stage of construction (or off plan) can become a very profitable investment. “Tranio” talks about five advantages of purchasing property off-plan.

A long-term investment

The main advantage of buying a house or apartment at an early stage of construction is the difference between the contract price and the market price to the point of entering the house in operation. In locations with a quickly growing real estate market price will always exceed that which was previously agreed between the buyer and the developer. Besides, usually the developer raises prices as the progress of construction.

Residential complex The Mile in Berlin, consisting of 260 apartments cost from 399 thousand euros, will be completed in 2016

For example, customer “Tranio” bought an apartment in Berlin at The Mile at an early stage (mid-2014) for 336 thousand Euro. By the time construction is completed in 2016 while maintaining the growth rate of prices in Berlin and given the increase in the price of the offer of the developer the cost of the apartment can reach 437 thousand euros. That is, for three years, projected growth rates may reach 30 %.

Progress payment

Depending on the local legislation for the purchase of the object under construction payment according to the agreed schedule with the developer. This scheme is additional protection for the buyer, and also eases the burden of an expensive purchase, which is converted in installments. If the apartment is purchased in a country with a high rate of growth in real estate prices and market value has increased, the contract can be profitable to sell until the end of construction.

In newly built residential complex Wardian in Central London apartments are sold in installments

Thus, the project of the apartment complex Wardian, being constructed near the one Canada square-the Wharf (Canary Wharf) in London, suggests such a scheme of phased payments: 21 days after reservation is paid 5% of the value of the apartment in six months — another 5% after 18 months 10 %, and the final payment (80 % of) takes place after commissioning.

Large selection

In popular, especially the Central areas of large cities are sometimes hard to find comfortable and modern accommodation in view of the fact that the proposals on the secondary market here appear infrequently. In this case, buying real estate at an early stage of construction allows you to choose the most suitable object: the best view from the window, floor, area, etc.

New building in a Central area of Munich Schwabing-Freimann(Schwabing-Freimann) will be commissioned in 2016

This advantage is important not only for the usual buyer but also for the investor who can pre-select the most promising objects with respect to their subsequent delivery in rent. For example, in Central European capitals is very difficult to find a Studio apartment, which later became popular with the tenants.

Change of plan

In the early stages of construction you can negotiate a change plan and interior finishes of the flat that will cost less than the demolition of walls and replacement of communications already built house. This way you can save money on future repairs and to get the most satisfactory from the point of view of the preference of the buyer object.

Residential complex in Döbling (Döbling), Vienna, consists of 35 apartments, the layout of which you can change before completion

“The possibility of redevelopment project is particularly relevant to buyers of real estate in Austria– says Elena Milashenkova, Manager of “Tranio” in sales of real estate in Austria. — Often Austrian apartments — small-sized: one room can be an area of 35-40 m2 and two — bedroom- 55-60 m2. Russian buyers with families of four or more people the footage seems too small. Helps remodeling, agree that in the early stages even without additional charges”.

Advanced technology

Purchasing a new property, the buyer in some way makes investment in technology: today, with the construction of housing in most countries of the world used energy efficiency standards, and in some European countries, such as France, without appropriate certification, the object may not be offered for sale.

Apartment in Charlottenburg-Wilmersdorf with are equipped with “smart home” apartments will be commissioned in 2016

Alone energy-saving lamps reduce electricity costs by 75% compared with conventional filament lamps and modern systems of water and heat supply and save significant amounts on maintenance of new housing. For example, apartments in Berlin apartments in Charlottenburg-Wilmersdorf (Charlottenburg-Wilmersdorf) is equipped with “smart house” that allows you to control the flow of resources in real-time.

In the end

Benefits of the acquisition of property off-plan do not supersede the risks associated with investing in an apartment or a house that exists only on paper or in the form of the pit. At the same time in Europe the buyer is protected from unscrupulous real estate developers and economic shocks special mechanisms.

In Austria, there is an Institute Trustees who receive full amount from buyer and gradually transfer them to the developer, checking the readiness of the object at each stage of construction. In the event of bankruptcy or unsatisfactory performance of duties, the Trustee is looking for another developer. In Germany a guarantor of the construction is, as a rule, the Bank, because most objects are built with the assistance of loan, and in France the interests of the buyer are protected by the state.

Thus, when buying a property off-plan in Europe, you can be sure that this investment will be very profitable.

Ivan Chepizhko, “Tranio”