Overseas Property World

Tweet

Brazil property has been receiving a lot of negative press in recent weeks, because of Spanish developers being arrested for fraud because they took monies for developments in Brazil that they never really intended to build.

The Times ran a particularly sombre piece on the three family members who had each paid a down-payment of 30,000 Euros, and were now as disappointed by the fact that they will never get the property in Brazil they had dreamed of, and because they are left severley out of pocket.

But all those people who are now very upset and out of pocket could have saved themselves all this misery by carrying out their own lengths of due-diligence before putting their hands in their pockets.

You hear of people all the time putting their money down before they have even been to the country. Most of the time this goes just fine and the people end up with the keys to their new apartment or villa and a smile on their face, but then there are the 1% that don’t and this can give the industry a bad reputation.

I always advise the people with whom we discuss an overseas property purchase off plan to go out and do some research on the development and the developer, here are some of the things you should research:

1. Make sure they have all the necessary titles and planning permissions

   This is a hurdle that often leads to disappointment when planning permission falls through at the last minute, and it is also one of the easiest to research; a trip to the local land registry, or planning office will gain you the relevant information.

2. Check the developers track record and financial status

   Ideally you should be buying from a developer with a proven track record of successful developments. This might seem a little harsh, but it is the best indicator of the developer’s intentions and quality. If it is the developer’s first but you really want to buy that property, then either wait till the development is completed, or make sure you check the developer’s financial status thoroughly; you want to make sure that they have all finance for building work in place, and that they are not reliant in any way on off plan sales to fund work on the development.

3. Make multiple trips to check progress

   After your initial fact-finding trip you should aim to make a trip to the country, before each of the stepped payments

Another key thing to remember when it comes to buying off plan property, is that, to a certain extent you are in the driving seat so negotiate payment terms that are favourable to you, so that you are not paying out a great deal of money until the development can be walked around inside.

Off plan property is potentially one of the most lucrative investments you can make, because you are getting an automatic discount off market value, and when the work is complete it will be a swanky new property with all mod-cons. If you do all these things then you can minimise the risk of an off plan property purchase, and reap maximum reward.

Post written by Liam Bailey for Azure Overseas, specialists in cheap property abroad