Can You Really Make It Rich With Buying Off Plan?

This is where investors purchase a property that doesn't exist.

I'm not referring to buying a make-believe property! I mean one where you're relying on a development company to build the property.

How does the process work?

You may have seen eye-catching brochures for the development of a fancy new luxury resort.

You're invited to invest in this property and receive a discount if you do it early. You're told you can sell during construction or after project completion for a huge profit.

This sounds too good to be true!

Well, let's look at this from the developer's point of view.

The developer has enough money to draft the plans and print enticing advertisements for his proposed development. However, he needs a lot of money for the land, and his bank requires security.

What does he do?

He entices people like you to invest early in his property by offering you a discount. He uses the investors' money to obtain a bank loan for the land.

Administrative staff then begins collecting more money from additional investors. At this point, the developer should have sufficient funds to begin construction and pay the builders. He can start the project without having any money withdrawn from his account!

Now, let's look at the same investment from the investor's perspective.

You invest early in property for a hefty 15% discount. One year later, the price increases by 10%. You wait another year when the price increases by another 10%. If you sell your share in the property, you could end up doubling your money!

So you and the developer both win, right?

WRONG!

Before investing in buying off plan, consider the following:

• You must sell your apartment or property within a tight timeframe which requires many buyers and a liquid market

• You won't receive your money back or a deposit refund if the project fails

• Prices have to rise quickly for you to make a profit - you'll make nothing if they remain static or rise slowly

• The initial valuation of the property must be correct; if it's overvalued by even 10%, you'll lose money

• Investing in foreign tourist markets is risky because locals can't afford the resale property

Now, you have the true facts.

Unless you're a developer, stay away from buying off plans!

About the Author

Surrinder Ahitan offers free property investment advice and tips on how to invest in residential and commercial property for maximum returns.

Visit http://www.best-investment-property-tips.com where he reveals more valuable insider tips and property secrets.

Hinjewadi and Manesar: Promising New Locations For Real Estate Investors

Peripheral Towns such as Hinjewadi near Pune and Manesar on the outskirts of the National Capital Region (NCR) are the new havens for real estate investors, who are trying to strike a balance between creaking infrastructure and rising costs.

GRI(Global Real Estate Institute) India Real Estate Investment Report 2007: India Gaining Momentum declared that 17 new corridors have emerged as strong investment destinations for investors with differing risk appetites. And Hinjewadi and Pune are among the most prominent.These two locations would also receive a boost from the neighbouring mature markets, namely Pune and Gurgaon respectively.

In the words of Cushman and Wakefield- GRI Real Estate Investment Report, "Hinjewadi (near Pune) and Manesar (near Gurgaon) emerge as the highest rankers on all parameters and are poised to be prominent locations with promising prospects due to relatively strengthened real estate dynamicas and favourable policies."

C&W India Deputy Managing Directors Sanjay Dutt and Anurag Mathur said, "Overburdened infrastructure, rising real estate and operational costs, limited availability of large land parcels - all have driven corporates and developers to seek alternate locations within their periphery."

Sanjay Dutt, Deputy Managing Director of Cushman &Wakefield, said that overburdened infrastructure, rising operational costs and limited availability of large land parcels have driven corporates and developers to seek alternate locations. The emerging corridors are extensions of tier I and tier II cities that stand to gain from the existing pool and benefits from pre-planned infrastructure.

These corridors are rated as per three broad parameters - sustainability, momentum and economic environment on the basis of a multi-variable analysis.

Besides Hinjewadi and Manesar, some of the corridors that rank high on the parameters include Sriperumbudur (Tamil Nadu), Shamshabad (Hyderabad), Greater Noida (NCR), Panvel and Virar (in and around Mumbai), Rajarhat, Chakan, Khadadi (Pune), Kokapet (Hyderabad), Bidadi (Karnataka), Thane (Mumbai), Bantala and Tumkur Road. and Devanahalli (Bangalore).

The real estate industry had been pegged at $16 billion in 2006-07. It is likely to reach $60 billion by 2010, growing at a compounded annual growth rate of 30 per cent, according to a report from consultancy firm Ernst & Young. In the last one year, the real estate company has raised more than $4.4 billion through public equity offerings.

"The availability of greater financing options has seen an increase in the scale of development, consolidation of developer balance sheets, greater streaming of the industry and greater emphasis on corporate structure. This, in turn, would help the industry in raising fresh resources" Dutt said.

For more information on Real Estate Agents, MLS visit Propertiesmls.com

Source: IndiaRealEstateblog

Andorra Real Estate Beats 2007 Slow Down

Apartment and house prices in Andorra have risen by an average of ten per cent a year over the last decade, with the last two years showing particularly impressive gains of 19 and 16 per cent.

But 2007 was set to see a freeze in the rises as the traditional ski season sales failed to materialise.

The 2007 ski season was a catstrophe for Andorra, with tourists shunning the country as snow levels were so poor, the worst for twenty years.

But an influx of buyers in the spring months has seen property prices rise again.

Many of the buyers were looking to move to Andorra full time to become resident, and take advantage of Andorra's tax haven status.

Andorra is one of two of Europe's prime tax havens, second only to Monaco.

Fifty years ago Andorra was one of Europe's poorest countries, but now counts among the wealthiest, thanks mainly to her tax haven status, but also her ski industry, which has seen as many as ten millions visitors in a year - pretty impressive for a country with a 70,000 population.

Andorra has very similar fiscal benefits as Monaco, but property prices are around a quarter of Monaco's.

Commenting on the turnaround, an Andorra property specialist says he is not surprised at the turnaround.

'2007 started badly for Andorra. The lack of snow added up to a lack of visitors from companies like Crystal Ski and the Thomson ski holiday companies and this in turn meant less buyers than normal, as some visitors like Andorra enough to buy a ski apartment. The pool of buyers was very limited between January and March, and the traditional good start to the year just didn't happen'.

Andorra property prices are around a quarter of better known tax haven Monaco, attracting many high income earners from the UK and other European countries looking to reduce their tax bills.

Surprisingly perhaps for a tax haven, mortgages for a property are as available as many European countries, with rates around the same level. Up to eighty per cent of a property's value is often agreed by the banks in Andorra.

Buying a property in Andorra is often seen as a route to residency, which entitles people to live in Andorra and benefit from her tax haven status.

To obtain residency in Andorra, applications need to be submitted in Catalan. A notarised copy of the applicants passport, birth certificate and a certificate of good conduct from the home country are submitted at the same time. Residency normally takes between three and six months to be given the stamp of approval by the Andorra government.

About the Author

For real estate and Andorra property for sale visit PropertyAndorra.com

News and details about Andorra, including ski holidays, an Andorra map and a snow report are available at YourAndorra.com