You have been thinking about investing in property development, but you are unsure of what it consists of? Just like any industry, real estate has its own share of real estate terms used frequently by property developers. Knowing them will make you feel more at ease when discussing the development process. Get ahead by learning the basics of property development. We gathered some real estate terms you should know of. Get in touch with us to start your project!
The process of buying off-plan consists of buying a property before the construction has ended or during the process of construction. After the buyer signs the deed of sale, he directly becomes the owner of the property even though it has not been finished yet. If you can’t afford to pay the entire amount of the project, buying off-plan can come in handy as it allows you to pay in several stages. This buying process also permits the buyer to secure the property in the case where the area is in high demand and can participate in the design and build.
As a foreigner, the PDS Scheme is perfect for you if you wish to live, retire or invest in Mauritius. It consists of a real estate investment program that allows the buyer to be the owner of a property on the island. Foreigners who buy a property under the PDS Scheme also get many benefits such as exclusive facilities and get their residence permit when buying a property worth more than USD 375,000.
The Smart City Scheme
The Smart City Scheme was created with the aim to create eco-friendly work, leisure, and living spaces in Mauritius. This includes finding energy and water solutions but also providing modern infrastructures, urban planning, technologies and transportation on the island. Investing in the Smart City Scheme has many benefits both for investors and individuals. Investors get VAT exemptions and an annual allowance for eco-friendly equipment and can also promote their projects with foreigners. As an individual, the scheme provides you with high-quality infrastructures, a greener environment, mobility solutions, and much more.
Home loan & Interest
Taking a home loan allows you to borrow an amount of money that you could use to purchase a property. Home loans include adjustable or fixed rate as well as payment terms. The amount of money should be repaid over time to the bank or the credit union you borrowed it from and will include interest. Meanwhile, the financial institution will be on hold of the title of the property until the full loan is repaid with the interest.
The interest applied on the mortgages you take refers to the cost of the borrowed money for your property development. Interests are perceived as a yearly percentage that is included in your monthly payment of the project.
Return On Investment
If you are wondering how well your investment is doing, the Return On Investment metric can give you a clearer picture. It helps you evaluate the performance of your investment and its profitability. To do so, the ROI analyses the amount of return you get on your investment compared to the cost of the investment. To calculate it, you just have to take the total of benefits and divide it by the actual cost of the investment.
Letter of Intent
A letter of intent is a preliminary purchase agreement between a buyer and a seller. The letter includes the project’s terms that will be discussed and evaluated between both parties. If there is an agreement, an official contract can then be issued for the purchase.
The title deed refers to the document that confirms the ownership of a property after it has been transferred into the owner’s name. The document includes information such as the two parties’ personal information, terms of the sale, promises from the promoters and details of the property.
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