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We are proud to offer a careful selection of properties throughout the Maltese Islands. Our aim is to present you with the best value quality homes and investments to suit your requirements. We look forward to servicing your needs.
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BUILT ON A TRADITION OF QUALITY SERVICE SINCE 1969
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Buying a smart property - the pros & cons of buying a property on plan or under construction
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Published On: 15-Feb-2010
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It is true that buying a property that as yet does not exist might involve more work and research than buying a readily constructed one, however it also carries many advantages, and many home buyers and investors have reaped the rewards for such endeavour.
The idea of buying a property that is either on-plan or that is still under construction is that of buying at current market prices, and ideally when the development is completed a year or so later, not only will the value of the property be higher, (thus achieving solid capital appreciation) but it allows the buyer to put in their personal touch. Developers also tend to offer attractive payment stage plans when selling on plan as this gives them some much needed cash inflow during the construction stage. It also allows greater room for price negotiation between the buyer and the seller.
When looking at buying such type of property and determining the worth price, one thing of extreme importance is its location. It’s a cliché, but it’s all about ‘location, location, location’. This is a critical factor in understanding the potential of the property and includes factors such as proximity to amenities, transport, parking availability, entertainment and leisure areas, schools, work places, and so on. Location is also extremely vital if you plan to let or sell the property on completion. Your estate agents can be extremely helpful in this, since they will have good insight about the demand for such type of property, how many units in the same development have already been sold, what are the plans for the nearby area, and what are the expected returns from renting out the said property.
One should also try and see what similar properties in the area are being sold or let for. This will give you an indication of the possible return you could expect to see when you possibly come to re-sell or let the property. Your estate agent will once again come in handy as they can guide you as to what is available on the market and what is the common trend. Also, find out if there are likely to be any additional charges associated with the development, such as service charges.
Once you’re satisfied with the development and its prospects, you need to select the unit that is most suitable for your needs. You have to consider whether you wish for an apartment on a higher floor, thus possibly enjoying better views, or whether you prefer a ground floor unit. Also consider the number of bedrooms required. Is this going to be a temporary residence? Will it be hosting children? A family will have slightly different requirements from a single professional, for instance. If you are purchasing it as a rental investment, apartments with how many bedrooms are mostly on demand? Make sure the property is suitable for the market you are hoping to attract, whether buyers or tenants.
Be very thorough about the details, dimensions and specification of the property. This might prove to be somewhat difficult to assess on a property that has yet to be built, however in most cases your estate agent or the developer will have computer generated images and site plans which will make your life much easier. Also do try and visit the actual development plot and familiarise yourself with the surroundings.
Needless to say, try to secure a property with one of the best positions and with unique selling points, such as a nice view, parking, or access to outside space. Such units tend to command higher prices, however they would be more significant to invest in in the long term, particularly if you are buying to resell or to rent out.
The main limitation when buying off-plan or a property that is not complete as yet, is the fact that you are not able to see the finished property before committing to buy. To minimise this risk, developers and estate agents go through great lengths. Very detailed images of the developments exteriors and interiors are drawn using the latest graphic software, and it is today becoming the norm for the developers to have one of the early units constructed designed a show property, this being a typically equipped with the level of specification a buyer would expect. Your estate agent would also be able to provide good insight on the reputation of the developer with regards to trustworthiness, timeliness and so on. Make sure that your promise of sale includes exact details of what is discussed and negotiated, particularly if these differ from the standard units. And get an exact timeline, including handing of keys, date of completion and by when the whole development, including the common areas will be ready.
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Homes of Quality, 201, Tower Road, Sliema SLM1602, Malta
Tel: 00356 2342 0000 UK Tel: 0044 0 871 711 8994 Fax: 00356 2137 4166
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email: info@homesofquality.com.mt
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