The pure investor is an unemotional investment property buyer who is purely seeking maximum short term return on capital within the safest investment market in history. Their investment vehicle is the purchase price but the investment involvement is only 10 - 30% of the purchase price.
During the development period the developer is likely to increase the development units sale price several times typically from 8-10% three to four times in phases. These price increases inversely mirror the developers risk, as the development matures the developer's exposure diminishes and so they can charge more for their product with each passing stage. Also for the buyer they can see physical progress, get a feel for the property and rely less and less on architect drawings and graphical impressions when making the decision to purchase the property - but pay extra for this luxury.
To the "Pure" Investor this creates an excellent investment opportunity. When buying into the development at the earliest stage possible the Investor can benefit from each of the phased price increases showing a profit gain of 30% - 40% (assuming 3-4 phase price increases each of 8% - 10%).
The pure Investor then seeks to re-sell his investment bought early at the best possible price just prior to completion to a secondary buyer who typically wants to live in or rent the property.
John decides to purchase an Investment Property and he decides that it is purely a wealth building exercise and that the "Pure" Investment strategy is for him.
John decides in conjunction with our advisors taking into account his personal criteria to purchase a unit on the development "X" at €630,000.
John pays 30% deposit (including his initial reservation fee) which totals €189,000 and signs a re-assignable contract allowing him to sell prior to the completion of the development units.
The project matures and after several phased stages John negotiates the sale of his purchased unit for €925,000 to a secondary home buyer.
To John the "Pure" investor this represents a huge profit gained on invested capital of 156% (IVA and agents fees have not been included in this example calculation) as he has only ever invested the initial 30% deposit into the property.
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