PROPERTY DEVELOPMENT – Tips on how to start

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Gibraltar is an attractive jurisdiction where to establish a property business. The main reasons for this include:

Low corporation tax (Together with Bulgaria, Hungary and The Republic of Ireland, Gibraltar has a similar low corporation tax which makes it attractive.)

No Capital gains tax

No Inheritance tax

It also has a system which is very user friendly, an excellent infrastructure together with a handy international airport. All these reasons plus a balmy Mediterranean climate more than justify the investment; here are several options that could be considered.

The first and simplest is buying old property to restore and sell on. This is by no means easy but it is always a winner of business provided you know what you are doing. Basically, you should buy a well-located property in serious need of restoration work. Make sure the location has a decent access and the building looks acceptable and is in good condition. Hire a well-established surveyor to run a thorough check of both the property itself and its main building. This could save you thousands of pounds and headaches in the long run. Once you know about the condition of the building, then you should get different estimates from a number of builders who will eventually carry out the work for you. This stage is the most complex as there are some expensive builders about. It’s advisable to get a local business advisor who can check this out for you and look after your interests so you do not overpay. The idea of having at least three estimates will help you to get a real feeling of the prices. Another option is to employ a builder from across the border which could sometimes be cheaper but you should be able to speak the language or have your consultant do that for you. A local architect is of invaluable help but merely for the technical side of things.

Once all these figures have been worked out and you have signed a contract with the builder of your choice, you should as soon as you can find the best estate agents to start marketing the product for you. Efficient marketing does produce, in most cases, good dividends and there is nothing more positive than having sold your project or future product to be restored to a client who starts paying you from day one. Some good marketing skills will work wonders: get an artist impression of how it is going to look like once completed. Get your architect to do a well described list of finishes and create a simple, neat website. This will look highly professional and will get your prospects very keen. You must do a first class job. Nowadays nobody settles for second rate anything. Even if you are in the lower side of the market, every client wants clean, chic and neat products. This is quintessential if you are looking for results. An important factor to consider is the price bracket of your area. You should always try to offer value for money and never overprice your property. Once your property is sold, you will just have to follow the normal procedure. Ideally, in this effortless society of ours, you want to give your prospect a completed product with finance as an inclusive option. Remember, people simply love to make money without having to put all their savings into the pot. This is the crucial point when the bank or building society comes into the scene. And it will ease the sales transaction. Bear in mind that the last recession or credit crunch of 2008 was primarily a banking and financial crisis and the credit squeeze put a massive amount of people out of business as the banks were not lending. So get the finance sorted for future buyers.

Gibraltar is a small market, composed by several markets, which gives it a privileged situation even in troubled times. But property choice is limited. Do not be taken apart because of this fact, au contraire, this could benefit you if you play your cards right and are patient.

Find yourself an efficient estate agent whom you can trust and with whom you can build a long-lasting relationship. They will be responsible for finding you the best and freshest deals so make sure not only to pay them properly but to compensate them when they bring you the best deals. Whatever you do, make sure you are always top on their customer list. The backup of an efficient business consultant is crucial. Not only can they guide you in your new venture from A to Z but also can help you manage your project keeping an eye on the builder and the architect alike as well as making sure it all runs smoothly like a well-oiled engine. This will help make your venture successful.

Jorge v.Rein Parlade MBA
Business Consultant
Tel: +350 54045282
Email: jorgeparlade@icloud.com

All this takes time, effort and many commitments but what business does not take all those ingredients? The first time is always more challenging but good fun as well and a brilliant antidote against inactivity and boredom. I can still recall an old times Greek client who started out doing small deals here and there in London and Barcelona using savings from his restaurant business. Now, he runs a multimillion fund with prime property in the top UK cities as well as in Spain and Portugal where he carefully chose the best pickings at low prices. And he made vast profits subsequently. The bottom line is there is always a starting point so make sure you are productive from day one. Thereafter, you can choose your next path to follow.