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Fortune Spa Resort
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At time of selection refundable
reservation fee |
4,500.00 Euros |
| At time of license first stage deposit - expected September 2008 | 10% Of purchase price, minus the reservation
fee |
| Second stage deposit 10 months later - expected July 2009 | 10% |
| Third stage deposit 10 months later - expected May 2010 | 10% |
| Total deposit paid in three stages | 30% |
| Total deposit payable studio type B from | 30,114.93 Inc IVA |
| Total deposit payable one bedroom apartment type A from | 37,825.99 Inc IVA |
| Total deposit payable twin bedroom apartment type C from | 40,821.25 Inc IVA |
The 70% balance of the purchase price is covered by a pre-arranged mortgage that will be provided by the developer’s bankers near to completion, alternative funding will be sourced by IPS. Please read the mortgage notes at the bottom of this page.
All payments must be inclusive of 7% sales tax except the reservation fee and are bank guaranteed.
NB: IPS has negotiated a special rate for our clients and of course ourselves, as illustrated in the table above, the usual system for this project is six thousand reservation, followed by a 35% payment when the license is issued.
Availability
For an up to date availability list please ask
Rental income
Type A apartments and type B studios are suitable for single
occupancy only.
Type C and D apartments are suitable for either single or double use. For these properties it is expected that half of the predicted annual 90% utilization will be double, or 45% per year.
The collaborating companies stipulate specific dimensions and in addition government controls regulating room size and specifications are applicable to this project.
Rentals are paid per person, payments are based on a percentage of the rental charged by the management company for use of the resort and their fees in turn are variable dependent on the level of care and services required by the tenant. Payments should cover the mortgage interest and produce a surplus that increases over the ownership period.
Fees are linked to inflation however and currently would generate a rental income for the owner of between 800 and 500 Euros per person, dependent on the care and services required. These estimates have been supplied by the management company and they have stated that they expect an annual average occupancy of 90%.
We have based our calculations on an average net return of 650 Euros per month, for 90% of the year.
In addition a 20% increase in rental fees is expected by the developer during the build with around 6% increments per annum thereafter.
Table - showing the expected rental income over a 10 year period with an interest only mortgage for a studio apartment type "B". Base price 93,816.00 total inc IVA 100,383 Euros. Deposit 30114 Euros total inc IVA.
Balance paid by pre-arranged mortgage or alternative funding sourced by IPS. Please read the mortgage notes at the bottom of this page.
Table - showing the expected rental income over a 10 year period with a 20 year repayment mortgage for a studio apartment type "B". Base price 93,816.00 total inc IVA 100,383 Euros. Deposit 30114 Euros total inc IVA.
NB: At the start of the rental period in the 3rd year we would only need 7 months rental, or 60% minimum occupancy to cover the mortgage payments.
Balance paid by pre-arranged mortgage or alternative funding sourced by IPS. Please read the mortgage notes at the bottom of this page.
Investment term
This is a long term investment project and your money will be tied
up for a minimum of four years realistically, although we should be
able to find a replacement purchaser for you should your circumstances
change.
In our view however, although the property will be desirable immediately thereafter, we would not recommend selling on your investment at this juncture, as you probably will not be able to replace it.
We currently plan to keep our own unit in the resort for a period of at least ten years, re-mortgaging when there is sufficient headroom in the rental payments to cover the extra mortgage repayment. This will release capital without having to worry about tax on the gain.
Your re-sale market will come from either the growing amount of retirees seeking this type of property in Spain, a market, which although growing rapidly, has very limited availability at present and no properties available currently, offer facilities with anything like Fortune Spa, or by an investor looking for a property with a secure and lucrative rental arrangement attached. Again there are very few prospects of this nature available.
Mortgage calculator
If you would like to calculate mortgage payments you can open our
online mortgage calculator by
clicking here!
Completion costs
When completed you will have to pay Notary fees and land registry
fees. In addition you will have to pay legal fees and we have negotiated
a special rate with a leading Spanish Solicitor.
Section 3 - Other information
Build time
You can expect a minimum of three years for construction, although
this could increase. Currently the delivery date is expected in 2011.
Please note that accommodation cannot be delivered without all major
facilities completed as it is a condition of the rental clients that
all of the services are available immediately, therefore the commercial
construction will be carried out alongside residential.
Our opinion
At IPS we have been looking for a development in Spain that is backed
by a genuine rental scheme ever since we started working in this sector.
Every project we examined that included a scheme failed when we examined
the offer. Rental payments offered would usually be based on a percentage
of the purchase price, with no planned increases and for a fixed period,
usually funded by an inflated selling price.
Well at last we have found one, an unusual project for IPS that on
completion either covers a repayment loan, or alternatively can provide
an income from delivery if the balance is secured by an interest only
mortgage. The mortgage market in Spain is evolving and within this
projects timeframe we will be able to offer interest only products
with terms in excess of 20 years. The resorts internally managed rental
package is backed by heavyweight clients.
The resort appeals to the type of client that it was created for and
I had only to talk to a few friends that easily fulfilled the conditions
of use (over 55) to realize that there is a fast growing demand from
retirees for this kind of facility, although there is nothing even
remotely approaching the quality and level of facilities that Fortune
Spa offers in the rest of Europe.
Another point to consider is that within the European community there
are countless thousands that require regular medical attention, dialysis
for example. Their choice for a holiday is almost non existent and
Fortune Spa covers this market.
The project has been very well received by the local people of Fortuna
and the feeling is very positive within the local government. The
locals are very happy and proud to have such a project come to their
area and many of them have actually purchased there. Additionally
there are 7 other projects planned for Fortuna for the immediate future
which can only have a positive effect on property prices in the area.
The water agreement is in place from the local government to meet
the demands of the water supply to the resort.
As people are living longer and need housing with 24 hour nursing
care available the authorities have a great demand for permanent places
in this type of accommodation. There has been a new legislation passed
in Spain for people who have dependency requirements. Article No:
14: Benefit /Welfare for attention to dependency for people who have
difficulty in carrying out the basic daily activities they will receive
assistance by way of services or economic welfare.
Fortune Spa Resort will meet the necessary requirements and regulations
needed by the Social Services to provide accommodation for the elderly
needing assistance and to people in dependency situations due to different
types of incapacity.
So we do have a demographic to purchase them in the future as retirement
properties, but please do not forget that the rental agreement that
first attracted IPS to this project will be transferable with the
property when you want to re-sell. Would you be interested in this
as a re-sale property with rental included?
We have been extremely impressed by the figures that this resort has
produced and give the project our strongest endorsement by purchasing
in the resort ourselves.
We have selected a larger property, as we prefer the added probability
of double occupancy, there is also the option of privately arranging
rentals to improve returns further in the future and in our view a
larger property will be far more desirable to tenants. You have to
be able to come up with the higher deposit though.
Another important factor to consider is future resale; one bedroom
properties are more popular than studios. Any property with a rental
scheme available to owners however will always be an easy sell.
In conclusion in our opinion, if you have the additional capital required
to purchase a type C or D unit then we would recommend this choice,
if not, then you have to consider the time that you want to invest.
Will the extra appeal as a resale property offer sufficient compensation
for the additional cost of a type A one bedroom over the type B studio?
The income will be the same for both, although the deposit and mortgage
interest or payment will increase. As stated in the investment term
paragraph, we plan to keep our unit for a minimum of ten years.
Conditions of use
As most of our clients purchase solely for investment, full availability
for rental will be handed over to the management company without retaining
any dates for personal use. There are no conditions for purchasers,
although there are controls that govern the use of the property.
What is being created at the residence is a tranquil, peaceful environment with the added peace of mind that professional medical facilities on site provide.
Should you be considering this resort for personal use then you should be aware that at least one of the occupants must be either over 55 years of age, require special needs, have an illness, or be convalescing.
As the project was aimed from the outset at the retired, as well as incorporating facilities for patients both recovering from and waiting for transplants, a degree of control in place has to be expected. This does not imply that your grandchildren will not be welcome as visitors however.
There is a further point worth mentioning regarding private use. Because of the volume of units required by these very large collaborators and the level of services provided, at all times the maximum number of properties available for rental are required.
With this in mind an unoccupied property penalty will be charged to discourage this. This means that if a property is left vacant over a specified period of time a monthly fee will be levied. They want residents using the facilities, or units available for their rental clients; we find it encouraging that they expect this level of demand.
The management company has indicated that the community fees are expected to be in the region of 100 Euros per month.
NB:
To be able to take advantage of the rental scheme offered the properties
will need to be furnished to an exact standard and specification.
A package will be made available from the developer that fulfils all
of the criteria required by the rental clients.
Location
Fortune Spa Resort is situated in the spa town of Fortuna located
northeast of Murcia.
The town of Fortuna is known on a worldwide level as a Roman settlement
and for the healing properties of the natural spring waters that have
run beneath the town for centuries.
The town is very well connected:
San Javier Airport 28 km
Alicante Airport 64 km
Corvera Airport 22 km
Train station 26 km
Beaches 30 minutes
Mar Menor bay 20 minutes
Two golf courses are available locally, Altorreal is within a 15 minute
drive and a new project San Antonio will be within a 5 minute drive
Investing in the Region of Murcia
Now is the time to invest in the region of Murcia and into
one of Europe’s most dynamic economies. With great infrastructure
work underway for the future of the region of Murcia, in the expansion
days of the Spanish economy.
High speed rail link
National Hydrological plan
New and improved airports
New motorways
Major development projects
7th largest city in Spain
Past 8 years has seen the largest increase in economic growth –
reaching a 6% growth rate, which is above national average
9.7% increase in job creation – National institute of Statistics
Intense Agriculture exports with 40% being exported
Diverse industry with 60% exports to foreign sales – exceeding
21,000 million euros
Services sector increased by 4% per year – above the national
average
1995 to 2002 the consumption of cement rose by an annual average of
18% - a key indication of the growth in the area with an annual growth
of 7%, 2 points above national average
Booming tourism with 40,000 tourism places
European Union considers Murcia an objective number 1 area for promotion
and investments. Investment aid of up to 40% and 70% of official credits.
Private industrial investment over the past 5 years has exceeded 1,200
million euros with investments announced in the short and medium term
in excess of 6000 million euros.
Three Universities in the Murcia region with 40,000 students enrolled
over the past academic year.
Superb climate – spring all year round
Guarantees and indemnities
All bank guarantees will be in place
Mortgages
The 70% balance of the purchase price is covered by a pre arranged
mortgage. This will be offered by the developer’s bankers near
to completion. The project is constructed with funding from a leading
Spanish bank and they will be eager to retain the arrangement, reapportioning
the loan between the purchasers.
Alternative arrangements will be offered by IPS, it is a policy of ours to use the weight of our combined business as a lever to obtain a better deal for all our clients, remember we are investors too and benefit alongside our clients.
Spanish mortgages are currently available up to a maximum of 30 years duration or 70 years of age if applicable.
Interest only basis mortgages
Currently mortgages are available on an interest only basis for 2
to 20 years. An interest only mortgage of 10 to 20 years duration
must not exceed 60% of the banks valuation at that time, expected
valuation at completion of an A type is approx 135,000 Euros, 60%
of this is 81,000 Euros, which easily should cover the loan.
All of the above information is of course subject to status and current market trends.
Further information
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Updated
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