price differences

[shak]

They already are, with the number of units that are going to bebuilt and the quality. My remarks on Fadesa quality has opened other strings.

Imagine the savings for not providing for 2000+/- units

a) A/c, and its related labour cost.
b) Not providings Fridge/freezer.
c) lift and the space saved fot its shute etc.

[kerry]

First floor two bedroom should be €74,918, who quoted the amount of €85,407 ??????

I think you need to add the 14% VAT to that price, that would give you ROmablade's price

[shak]

Hi Kerry,
Please read my post of 22nd @5.50 and of the 24th @11.25. All the prices that I have stated ALREADY HAVE VAT INCLUDED........................As confirmed by Senior Fadesa staff.

All the onces who are still going to invest please be aware that due to the confusion created.

You might end up paying the 14% twice is whichever guise. PLease also note that when you are going to be applying for the mortgage you cannot raise finance for the VAT element ( wether you buy from Fadesa or not )

[hello]

SHAK you must be a disgruntled ex employee. The agent network at Fadesa released information far too early, allocation has been a mess but I suggest you don't buy (prices are ranging from 75k euros to 113k euros inclusive of VAT) Why don't you take your experience of buying all of those units worldwide with romablade and buy up in Italy, those opportunities are passing you by, I have some land in Brazil you might be interested in, no past history of construct, no bank gurantees, arse end of no where, expecting about 100% capital growth per annum, you interested?
________
Volcano Vaporizer

[mcneilee]

i asked about the price & ashoured me the price i was given was the right one wich is 106000 euros

[shak]

I let you draw your own conclusions.

[romablade1889]

All,
This VAT business has happened before in Morocco. I can't recall which development it was that I was considering reserving on (I think it might have been Paradise Beach) but I remember complaints on that particular forum about the developer adding VAT after deposits had been paid...

That's why, when I reserved at Alkudia, I double checked that VAT was included in any prices I was quoted... If Shak's right, the mystery VAT was added to the prices before I was given my first quote as my price only went up from the indicative £55k to the now quoted £57k and these both include VAT.

Unfortunately, what's happening here is common practice in the building trade, and many other markets where demand outstrips supply... When you come to sell your apartment you'll want to get as much as you can for it (although my personal values would prevent me from increasing my price mid-negotiations!).

Fadesa have been surprised by the level of demand on Alkudia and so are trying to get as much for their initial set of developments as possible. Unfortunately for us, that means we have to pay more. However, if you follow the supply/demand model through, that should mean better returns for us when it comes to renting and/or selling our properties later...

But wait... There is a risk element.. Risk isn't just a negative in financial terms, it's basically a measure of the possible variability of profits or losses. The higher the risk, the more you can win - but also the more you can lose.

You could regard Alkudia as low risk on the negative end of the scale. Property prices are unlikely to drop, Fadesa are unlikely to screw up to the extent that the properties are unsaleable and the bank guarantee protects against bankruptcy etc... However, the returns risk is high.. Returns could be negligible or they could be as much as 60-80% over 5 years.... The things that I think will increase the risk on sufficient returns at Alkudia are:

Buy price is relatively high if you compare to other developments, including Marina Smir where you can buy a 2 bed, fully furnished at £53,000 today.
Low cost airlines have no definite plans to fly into Tangiers at the moment
British rental market is very immature and has an unpredictable future
There are questions about Fadesa's build and finish quality on past developments (doesn't automatically mean this one will be poor)
It's a very large development. For those wanting to sell sooner rather than later, they'll be competing for buyers with the yet to be built, off-plan apartments available
There are few (if any) sea views
Morocco (outside Marakech) is still to prove its potential in terms of property market growth. Look at Bulgaria as an example where returns for all but those who got in really early have been less than expected.

However, factors that might influence a higher end return are:

Demand is obviously high for this development and the region
Although the buy price is higher than hoped, the returns could still be just as high percentage wise
Fadesa have other reputations which suggests quality build
The development will have lots of facilities others don't, like shops, restaurants etc
The area is up and coming in terms of tourism
Low cost airlines are considering flying into Tangiers even if there are no concrete plans
The Spanish rental market opportunity is high
They are very close to the beach compared to properties available in other countries (for much higher prices)
If the Sofitel can charge £220 per night for a room in a hotel just down the road from Alkudia Smir, the area can't be that bad and obviously attracts the right sort of tourist (i.e. one with cash to spend!)

I could go on, but you get the gist. There is risk involved in any investment. In Alkudia I think you've got moderate risk as the risk of losing bucket loads of cash is minimal. However, if you're thinking of using a mortgage to buy here you have to consider the costs of the interest on that and I think that's where the risk of satisfactory returns becomes high... It's down the the individual. There are other investments (Fidelity have a Special Property ISA that could return 30% pa) but the risk usually reflects the levels of reward...

The choice is down to the individual. If you want to play with the property market and maybe make some money, enjoy the challenge of buying overseas (it's great fun!) and marketing a holiday rental property on the internet whilst having a bolt hole for those dull, wet English winter months, then go for it....

Use my Business Case elsewhere on this forum to work out the different scenarios... Basically, you need to know what your break even point is. If you include all your buying costs (including solicitor, taxes, furniture, viewing trips, maintenance costs etc) and your mortgage payments, how much would the property value have to rise to get your cash back... This is the zero risk scenario. Then work out what return you could have got from investing in an alternative zero risk scheme such as a government bond or building society account... The tool does this too. That's the magic number, because any £1 rise in the value of your property above that is pure profit you would not have seen taking a zero risk option...

Personally, I'm waiting for the plans before making a final decision. I'm weel and truly on the fence at the moment...


Sorry for rambling, but hope the above is useful...

[mcneilee]

shak

it would be good if you could show any proof of the prices you where quoted so this could be resolved

still could be something for the solicitor to look into for me if i still go ahead with it .at the moment i still am but make sure no funny stuff giong on. would have been good if the buyers had got together & used one lawyer as it would been easyer & cheaper

[shak]

I do have them in writing in an e.mail form from Fadesa.

[shak]

I do have them in writing in an e.mail form from Fadesa.

[mcneilee]

I do have them in writing in an e.mail form from Fadesa.

so how about seeing the email & the sender

[shak]

I am sorry but for reasons of confidentialty I cannot post it on the Forum.
However they are the same as I stated in my forum earlier. besides it does not say if the price was VAT inclusive or not,

The prices were confirmed to me by Fadesa senior Manager and the local Manager verbally on more than three occassions.

I am happy to show them to who ever wishes to see me personally

[romablade1889]

shak

still could be something for the solicitor to look into for me if i still go ahead with it .at the moment i still am but make sure no funny stuff giong on. would have been good if the buyers had got together & used one lawyer as it would been easyer & cheaper

I'm still up for sharing a solicitor assuming I go ahead with the purchase.

[hello]

shak,

the prices you have been talking about are wrong, stop causing confusion. The prices for 3 beds on ground floors are, approx 113,000 euros INCLUDING VAT. 2 beds on ground approx 88,000 euros INCLUDING VAT. 3 beds on 1st floors approx 109,000 euros INCLUDING VAT. 2 beds approx 87,000 euros INCLUDING VAT. 2 beds on second floor approx 88,000 euros INCLUDING VAT. 2 beds on thrid floor approx 106,000 euros INCLUDING VAT. 1 beds approx 76,000 euros INCLUDING VAT.

THIS HAS ALWAYS BEEN THE CASE.
________
RUDI FISCHER

[azul]

Now I'm a bit confused. I was quoted the following price, for a 1 bedroom, penthouse, 3rd floor; 75,256 Euro.
Are you saying that VAT has been included in that price two times?