What would you do if you saw a property priced below its going rate? The sensible decision would surely be to open your wallet and snap it up as quickly as possible. Indeed, buying below market value (BMV) property, essentially below the prevailing market value is quite simply the key to any good investment, allowing investors to enjoy instant equity in most cases.
With the global property market having slowed in recent years, buying BMV property can certainly have some fundamental benefits to the investor. For example, if prices within the market become stagnated or even experience a slight dip, buyers will still be able to make money on their investment aided by the safety harness of having built-in profit from the very beginning.
As well as this, purchasing BMV will also make your property easier to sell thanks to capital growth automatically being factored into the property purchase meaning that the investor doesn’t need to obtain the maximum price to make a sufficient gain. Strong rental yields can of course also be achieved as no matter what its sale price the right property in the right location will attain the same rental income as a comparable property which has been purchased at full price.
Many would argue that BMV is a win-win situation for both developers and investors but what questions should you ask when buying BMV?
Nick Stuart, MD of leading Spanish estate agent Spanish Hot Properties, offers these 5 must-ask questions when buying BMV properties:
If you are a small investor who is looking for a bargain or a ‘life style’ purchase these are the questions you should consider:
1. What was the original sales price and what is the discount?
2. If I intend on using the property myself, does it fit my requirements and needs?
3. Can I get a large mortgage?
4. Do I need to invest in the property to bring it up to a usable state?
5. Can I rent the property?
On the other hand, if you are a large professional property investor these are the questions you should consider:
1. What is the market value? (The Spanish valuation system can be unreliable
2. What is the exit strategy?
3. How quickly can I get my money back?
4. What is the threat of the market in terms of the failed sovereign debts and macro economic factors?
5. What is the degree of hands on work required for the investment?”
Now you have an idea of what questions you should ask, why not take a quick look at what BMV properties Spanish Hot Properties have on offer in Spain.
Samara – Set into the hills of Marbella, this is luxury living at its finest. All Samara properties are spacious, light and exquisitely finished, providing everything you need for a luxurious stay. Each property benefits from an open-plan living room which has been carefully designed to maximise the spectacular views whilst still delivering complete privacy.
The attention to detail is clearly evident in the finishing touches. Kitchen furniture is by leading Italian specialists Snaidero, electrical appliances Bosch, and each property has a pre-installed Bang & Olufsen audio system. Bathrooms come with under-floor heating and every room benefits from cold/warm air conditioning. Two bed apartments are available from €206,500, previously priced at €360,000 – a massive decrease of over 48%.
Banus Beach Gardens – An exclusive residential complex of 14 penthouses, 23 garden apartments and 23 first floor terrace apartments situated in over 8.000 square meters of private tropical gardens with lake style swimming pool or relax at your private spa, with its own gymnasium, Jacuzzi, Turkish bath, sauna and fantastic indoor heated swimming pool.
Two bed, two bathroom apartments have been dropped to just €470,000. Previously priced at €950,000 – over 50% decrease.
Marina de la Alcaidesa – A stunning development close to excellent restaurants & bars, miles of beautiful, uncrowded beaches, championship 18 hole golf course, shopping and bustling nightlife and within easy reach of the airport.
Prices for a 2 bed apartment from €240,000 reduced from €720,000 – a staggering 69% discount!
For more information on these BMV properties please contact Spanish Hot Properties on 00 44 207 558 8355 or visit www.spanishhotproperties.com