I can understand your dilemma, I bought 2 apartments in phase 2. Personally I suspect that if you can afford to hang on to the apartment for say 3 or 4 years after it’s completion, the investment will be a profitable one. In this time the development should be well established and totally complete, making the apartments much more appealing. Also the worse of the property crisis should be well behind us. The number of new developments should also have been reduced improving the supply demand situation. And if Corvera is the quality development that we expect it to be it’s reputation will make it stand out from the rest.
The problem I feel is that until you sell the property, you will be making a significant monthly loss on the running costs, one reason being there is a lot of oversupply in the Spanish rental market. Phase 1 & 2 investors are in a worse situation as our apartments will be completed a year or so before the golf course, and an apartment on a golf course that is not complete (and little or no other facilities) and all the ongoing development onsite will reduce it’s rental appeal considerably. I will be assuming a loss of around £10 K on my 2 apartments in the first year. When you can rent I believe that the Spanish government take 25% gross, and then there are the maintenance, utility, management costs etc. I would be interested in any comments by Roda owners on how the rental side of things are going (and how it was going at the beginning).
Your phase should have the advantage of having the golf course operational (or close to it) and this should significantly reduce the losses and also increase it’s resale value. I would imagine that you would be able to sell it shortly after completion.
Another problem is that Calidona seem to take a long time in completing the developments (I’ve been told for example that Polaris is much quicker, Roda will still take some time to complete), and until it is complete the apartments will not be so appealing to rent or sell. I hope that as Calidona appear to be delaying development 3 that they will focus on the first two and as a result complete them more quickly.
I guess at the end of the day it’s a gamble, but if you do proceed with the development, although there are no guarantees, (who knows what will happen to the exchange rate, the property market etc in two years time). But if I had to guess I think that if you sold your apartment just after completion you probably would not make a loss (or at least not more than 15%). And the longer you held onto it the better the investment.