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Commercial Property 

For a fixed profit for your investments it is profitable to invest in retail, restaurants or bars.  Tenerife is an all year round season and this influences in demand and profitability. Investment in commercial property can provide you with a pretty fast profitability if you take the advice of our specialists when choosing this type of property.

Many investors together with the short-term investments are more and more interested in the long term investment. The best way for this type of investment is to invest in the construction of residential property and commercial property.

 

Construction of Residential Properties and resale.

As it is known, the demand for housing grows each year. But for now it is not possible to satisfy despite annual increase in floor area. And we must bear in mind that in recent years the construction has almost been paralyzed.

As a result, prices for new housing will increase each year.

The most demanded in the new housing market are small apartments with one or two bedrooms. Most of them are sold in the construction process before the completion. Prices are cheaper compared to the three and four bedrooms. Based on this example we can ensure that investors prefer the apartments that are not too large.

 

Construction for commercial reasons.

With the growth of tourist flow and the reduction in the cost of construction because of the economic crisis, the profitability of investments in the construction of large shopping centers in the main tourist areas became apparent. And steady growth of tourism raises the level of interest in investing in hotels, health and wellness centers.

 

 

 

The commercial Director of our company Mrs. Svetlana Efremova answers some questions in reference to the possibility of getting a bank loan for commercial constructions:

 - Tell us please, the possibilities of getting a loan to build a commercial property, and also about the benefits you could get from the investment in residential property.

- To acquire a building plot the investor has to have his/her own funds, but you can ask the bank for a loan to build. The same plot and the building to be built, will serve as a guarantee to the bank. The loan can be up to 60% of the overall price of both real estate of the land and building. The overall construction costs are almost completely covered.

For such loans the following documents must be submitted to the bank:

  • - Initial project approved by the corresponding College of architects;
  • - Greater license (and if necessary planning permission) work, granted by the Municipality concerned;
  • - Valuation of land and future building, issued by a company approved by the Government;
  • - The budget or contract;
  • - Title to the land and information report from land Registry;
  • - Information report from the builder;
  • - Information report of the technical team of the construction (architect, lawyer, manager etc.);
  • - Study on the prospects of development;
  • - Result of geodetic survey;
  • - Construction risk insurance;
  • - Decennial risk Insurance of possible defects in the construction (given to the buyers);
  • - Contract of laboratory tests (quality of concrete, steel etc.);
  • - Contract with the Control Department accredited by the Administration for control of materials, building standards etc.).

For the bank to accept the project, following negotiations need to be carried out:

  • - Within the grace period (during the mentioned period only interest is returned);
  • - Interest (fixed or variable) and amended conditions of high or low;
  • - Time the loan is fully repaid;
  • - Conditions charged by the bank to study the project and open the credit line;
  • - Other details.

After confirmation by the bank granting the loan, the deeds of new construction are signed, if the construction belongs to several owners and have public areas; also the deeds of Horizontal Division are signed. After, the mortgage is formalized. The amount of the loan is reserved in the bank. From this amount the registration costs (taxes, registration, notary etc.) are deducted and first payment of 20% is paid to the builder.

The rest is paid direct to the construction company through certificates that confirm each stage of the work. The certificate indicates the construction work carried out and its price. The certificates must be verified and approved by the site manager, architect, technical architect on behalf of the builder, and then by the Control Department and an expert from the bank. So 60-70% of the loan is paid. What remains is released by the bank only when the certificate of completion of works is issued. It is absolutely guaranteed that the money grated is invested exclusively on the building works.

If the intention is to sale the property built, then we can start its promotion from the time of obtaining the building permit. After returning to the bank the amount corresponding to the loan, the remaining from the sale will be profit for the investor. In our web page you can see some examples of investments. We can also show several buildings built by us.