Due Diligence | Property Investment Research

Whether you buy a property abroad as a holiday home or simply as an investment it is imperative that you research all aspects of the property purchase.

First Choice Spain assists property investors and holiday home buyers with comprehensive research allowing them to make well informed decisions about where and which property to buy.

The two main aspects of due diligence is the property investment as a viable proposal and secondly the reputation and track record of the developer.

Due Diligence - The Property Investment
Always make sure that the property investment itself is in line with your expectations and that you can realistically achieve your goals.

The actual return of investment on the property depends often on the invest risk level. For instance, an early entry into an emerging market offers by far the highest return on a property investment. However, it is also exposes you to a higher risk than when you would invest in an established market place.

Location - Location - Location
Buying investment property near by popular 4 and 5* resorts and or golf courses will provide more often than not good rental returns Of course the proposed investment need to be close to an international airport and preferably one where low cost airlines fly to.

Cost / Value
A property investment will only give you a good return if it is acquired at the right price. Always allow for its value to appreciate and/or generate solid rental returns in proportion to its cost.

Infrastructure
From our experience we know that the best property hotspots are in areas where money is being invested by the local government in creating proper infrastructure.

Tourism
Tourism is one of the major factors that enables most emerging property investment locations to create a lucrative property market and to provide buy to let property investment opportunities

Stability
Global terrorism is a major threat to many countries. The political, but also the economic stability of a country / region must be part of any due diligence research.

Due Diligence on the developer or constructor
Once you have decided on the location you wish to buy your investment property the developer / development due diligence process need to be considered.

Television documentaries have been dedicated to horror stories about property developments abroad where developers or promoters have taken deposits on projects for which they do not even own the land title, or where building permission has not been granted.

In situation like this construction often come to an halt and the investor looses part and sometimes all their money

Unless we at First Choice Spains are totally satisfied that the developer is a bona fide become who has obtained all the necessary licenses and has access to sufficient funds to complete the project we simply do not recommend the development.

Our due diligence always includes the following checks:

  • Bank Guarantees stating that if the developer or constructor runs out of funds prior to the completion of the project, the bank or an insuring party will return funds to the investor.
  • Building Licenses. If a building license has not been granted and we believe that the proposed development as a pre-release is advantageous to property investors we will make sure that deposits are being held in an Escrow account or a client account of a reputable lawyer and only will be released to the developer when all relevant licenses have been granted.
  • The Developer. Previous projects are without any doubt the best point of reference to future projects. We only offer projects from experienced developers who have high standards, and equally important a reputation for completing on time.
  • Land Title Confirmation. Obviously we will make sure that the developer owns the land on which they intend to construct on.
  • Re-Assignable Contracts are important when operating a "buy to flip" strategy. In order to do this the contracts must be re-assignable. Without a re-assignable contract the investment strategy could be rendered useless.
  • Build Quality Guarantees. We always make sure that the builder offers a guarantee on construction and a detailed quality specification.

Although First Choice Spains carefully selects investment property opportunities before offering to clients, we strongly recommend that all investors carry out their own due diligence procedures as well before making any investment.

Residential tourism on the Costa del Sol continues to grow at a healthy rate.
Tel.
0034 952 817 369
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0034 616 249 972
Email:
info@firstchoicespain.com
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