Introduction
There are few places left in Morocco – indeed, in the world – where ordinary investors can afford to buy quality villas right on the beachfront, so when we heard the deal details and saw the waves lapping at the edge of this lovely site near Mirleft, on Morocco’s picturesque Atlantic coast, we knew we’d found what we were looking for.
Where else in the world can you own a beautiful beachside villa that pays for itself? These properties, which are a very healthy 27% under market value, require only 30% down, have AXA-backed security, and 70% LTV mortgages are available through an established Moroccan bank. Each comes with a 7% net rental guarantee that should cover your repayments for nine years; owning one of these villas should pretty much fund itself, while you sit back and enjoy the capital growth – and the sunshine.
Our previous Moroccan developments have been near thriving city locations, bustling Marrakech and historic Fez, but this one is quite a different prospect. Nearby Mirleft is a charming and relaxed fishing village. Its unique microclimate – protected from the desert heat by mountains to one side and cooled by ocean breezes from the other – makes it an exceptionally pleasant place to reside and gives year-round rental potential. Wonderful as it is just to kick back and relax here, there are a number of nearby attractions and it also offers activities including surfing, diving and deep-sea fishing. A gorgeous place to visit or to live, and a beautiful investment in more ways than one.
Already popular with local and foreign visitors, improving infrastructure means this delightful part of Morocco, which is just three-and-a-half hours fly-time from London, is attracting ever increasing international appeal, boosting capital growth, promising great returns, and making this the optimum time in the area’s economic cycle to be getting in.
This is a Gardens of Fedala development, and enjoys their unique benefits of an AXA-backed rental guarantee, making it a safe and highly attractive investment; the last such deal we offered, in Fez, was snapped up in weeks, and we’re sure this one will be just as popular. As well as being a great investment buy, you can stay at your villa for a fortnight’s holiday a year. Properties here have optional private pools and all the usual Gardens of Fedala extras such as an on-site health centre, bar and restaurant, and you even get free return flights for the first three years.
We have secured 80 of the 120 units on this site for exclusive sale to the UK market. They’re being sold on the French market as well, and we expect this great deal sell out very quickly, so get in quick – when they’re gone, they’re gone! So if you’d like to take advantage of this cracking deal and grab an under-market-value beachside villa, in a beautiful, sun-kissed, economically burgeoning corner of Morocco, read on.
Warm regards,
Alise and Jonty Crossick
Investment scenario
This scenario highlights the potential returns available to you. It assumes that the property market will carry on growing at a steady rate of between 5-15% over the next few years. Of course, rates will vary during the course of your investment.
The scenario assumes a purchase of a €179,000 villa bought with a 27% discount to market value. The mortgage calculations assume a repayment mortgage with borrowings of a 70% loan-to-value and a fixed rate of 5.5% over 20 years. Please note that mortgages are status-based and the products available to you will depend on your own personal circumstances.
Exit strategy
When the time comes to sell, your onward sales market will primarily be second homeowners and investors. Holidaymakers, especially the French and Spanish, have already discovered this little corner of Morocco, but word is spreading and tourist numbers from all over Europe are set to boom. In fact, as stated in the Observer, lastminute.com’s bookings to local airport Agadir rose by a whopping 700% last year – a very strong sign that the market cycle is really starting to heat up. Indeed, the French have bought 40 of these Mirleft units already; we advise you to get in fast.
Flourishing local investment
This touristic influx brings with it money and jobs and attracts further investment. More developments are built and more amenities provided, in turn attracting further tourism and property buyers. The lucrative business of surfing is already well established in the area and diving, deep-sea fishing and many other activities are being introduced. This increased demand helps raise the value of your unit as buyers and developers fight for prime real estate.
Prime location
And frontline property like Gardens of Fedala is considered prime real estate – quite simply because beachside property tends to be more attractive to property buyers/owners than anything else in a market. It appreciates faster, it sells faster and it commands higher rental occupancy and income than inland developments. The unwavering global demand for beachside property is the undoubted strength of your resale when you do decide to pass on your Fedala property.
Perfect timing
Mirleft has all the qualities to become an outstanding resort. Getting in early in the property cycle and at a great under-market-value price means a chance to benefit from instant equity, ride the market through its growth cycle and maximise your returns.
Mortgages
The mortgage market in Morocco is in its infancy – indeed, we are actually in a fortunate and unusual position to be able to offer financing with this deal. 10% of your purchase amount is due on contract and a further 20% at foundation stage (this is expected around Jan ’08). The remaining 70% is due upon completion (expected June ’09) and this can be paid as cash or via a mortgage.
We have negotiated with leading Moroccan bank BMCE to provide mortgages for this development. However your borrowing ability will depend on your personal circumstances so please contact BMCE on the number provided above to find out what mortgage options will be available to you.
Should you qualify for a mortgage then it is possible to get up to 70% loan-to-value borrowings on a repayment mortgage of up to a 25 years (although a 20-year term is more common) interest rates are pegged to the Euribor rate and are currently circa 5.5%. Please speak directly to BMCE to find out the exact rate payable as this may vary according to associated costs.
Please be advised this is a full status mortgage and, as with any status mortgage taken out in the UK, you are required to provide proof of your property deposit as well as various documents upon application.
Required documentation includes:
Copy of unexpired passport
Last three months’ pay slips/proof of income
Last three months’ bank statements
Experian credit check
P60 document
As a rough guide, to qualify for a mortgage you will need to
meet the following criteria. Please contact the bank for more
specific information.
GUIDE Criteria:
Age limit at final expiry: 70 years (73 years is possible but extra
time is needed to deal with insurance company).
Debt rate: Maximum of 40% for non-residents and expat
Moroccans abroad (e.g. if you earn £100,000 a year and pay
out over 40% to service debt (over £40,000) then you would be
unlikely to qualify for a mortgage).
Maximum borrowed amount as multiple of income: 4-5 times.
BMCE Bank
English contact:
Abdallah Alaoui
26 Upper Brook Street,
London W1K 7QE
Tel: +44 (0)207 518 8252
Fax: +44 (0)207 629 0596
Email: abdallah.alaoui@bmcebank.co.uk
Technical specifications
Masonry
Inside partition walls separating the living quarters have a double thickness of bricks. Exterior facade is lined with thermally insulated brick, also double thickness. Inside partition walls are brick. Levelled areas waterproofed to avoid damp.
Woodwork
Solid wood front door is in traditional beldi style, or is a three-point prefabricated door. Wood-framed French windows open out, with shade provided by internal wooden shutters. They have bolts fitted and an ‘espagnolette’ locking system.
Flooring
Flooring is traditional Moroccan glazed tiles, 10cm x 10cm with matching skirting. The patio flooring is in natural-coloured matt and glazed decorative tiles.
Wet-room walls
Shower and bath surrounds are tiled in glazed tiles, two metres up the wall from the floor. The walls of the rest of the room are in traditional style.
Kitchen inside walls
Glazed tiles 60cm above the work surfaces and kitchen sink.
Internal walls
All walls are finished in traditional style.
Ceilings
In the living area there is a lowered or plasterboard ceiling to allow air conditioning conduits to be inserted. Plaster cornices can be found throughout the living area. Roughcast plaster or matt paint on all other ceilings.
Fireplace
Lined with heat-resistant bricks with a clay chimney stack.
Kitchen equipment
Four gas burners (bottled gas) plus oven and hood, washing machine and dishwasher, fridge and freezer, stainless steel sink with draining board and mixer tap, kitchen cabinets and cupboards. The cupboards have Mamoun wooden doors. Granite or traditional stone work surfaces.
Electrical installation
All sockets are earthed. Each house has its own standard electrical panel with trip switch and appropriate fuses. Installation is a Legrand or equivalent.
Air conditioning/heating
Reception area on the ground floor has a reversible control panel, providing air-conditioning/heating in the rooms. The bathroom has a convector.
Television and telephone
A communal aerial gives access to national and the main international TV stations at no extra cost. There is one TV aerial socket per room including all bedrooms, and a phone socket in the living room and all bedrooms. To connect to the internet an internal socket (paid for separately) may be used.
Plumbing
Cold water pipes are embedded under the floor tiles. Hot water is provided by accumulated electric heating; capacity is dependant on the type of villa. English-style bathroom suite in white enamel, with a white porcelain cistern flush system.
Outside facilities
Roads and pavements are made of brushed cement, or smooth flattened earth with limited parking facilities. There are ‘golf buggies’ to transport residents around the site. The garden will have palm trees and assorted foliage. They and the entire site are illuminated at night.
Furniture
Living room/dining room
Plain wooden dining table with six chairs, a double-seated sofa with two armchairs, a plain wooden coffee table, a two-door, single drawer cabinet, Moroccan mirror, wall-lights, other lighting and pictures.
Bedrooms
Double bed, bedside cabinets, lighting, a mirror, with wardrobe and cupboards either fitted or as furniture.
Kitchen
Crockery, cutlery and kitchen utensils for six people.
Miscellaneous
Gardening tools, barbecue, broom and vacuum cleaner.
N.B. These details are taken from other Gardens of Fedala resorts. The architect reserves the right to alter details where appropriate for technical reasons or as an improvement.
Lawyers
When buying property in any foreign country, it is imperative to have a good English-speaking lawyer that will guide you through the process step by step.
Lawyers representing our clients must be able to accomplish
the following:
Act with power-of-attorney for the investor.
Guide through the conveyancing process until completion.
Provide a good level of service especially around busy times, such as completion, keeping the investor up to date with what stage they are at.
Provide an English-speaking key contact who can respond to enquiries within 48 hours by email or phone.
Provide receipts for all disbursements or out-of-hand expenses.
Include within fees the cost of all notarisation, apostils, postage, tax registration and other legal paperwork that will need to be done in Morocco.
With these points in mind we have instructed a UK legal firm, Live Overseas, to liaise between a legal firm in Morocco and you, our investors and to guide you through all the legal aspects of buying an apartment in this development
in Morocco.
The charge for legal services is €1,400 for the purchase of a unit of any size in the Gardens of Fedala, Mirleft and will be payable 70% in advance and 30% at completion. In order for the lawyer to work on your behalf and sign documents in your absence you will need to assign them power of attorney.
The estimated cost of this is a one-off payment of around £150. Total disbursements, which will include stamp duty, taxes, licences, notary fees etc, will be in the region of 5% of your purchase price. Live Overseas will provide more information relating to this closer to completion.
Live Overseas
Academy House, 403 London Road,
Camberley, Surrey, GU15 3HL
Phone: 0870 191 3099 Fax: 0870 191 3002
email: info@live-overseas.co.uk
www.live-overseas.co.uk
Currency
Currency Exchange
Small differences in exchange rates make a big difference to the end amount you pay, and specialist companies compare extremely favourably to the high street banks. Ready2invest currently works with Moneycorp and Currency Solutions, currency conversion companies in London that offer an extremely personal service and excellent rates.
Tax in Morocco
As with all tax systems, the rules in Morocco are complex and you are strongly advised to seek professional advice from a tax specialist. However, here is a guide as to what you can expect as a UK investor purchasing a property for investment purposes. Due to the nature of this deal, most costs are covered by the management company.
Property Tax
Similar to UK council tax, property owners in Morocco are required to pay an annual property tax. However, the management company of Mirleft bears all of these costs for the duration of the rental guarantee and the buyback guarantee.
Property Rental Tax
If you don’t live in your property, tax due on rental monies is
set at 13.5%. This is payable from purchase. However, this tax has already been deducted from the guaranteed net rental income at Mirleft.
Capital Gains Tax
If the property is sold within 5 years from purchase then the capital gains tax is set at 20% of profit, subject to minimum of 3% of the sales price of the property.
If the property is sold between 5 and 10 years from purchase then capital gains is charged at 10%.
If the property is held for over 10 years then no capital gains
tax is due.
Dual Tax Treaty
A dual tax treaty exists between the UK and Morocco which means that you do not have to pay capital gains twice.
Currency stability
The price of a Mirleft property is fixed in euros and payment is also due in this currency. As the euro is currently very stable, your exposure to currency fluctuation risk is minimised.
Due to the structure of the deal, the rental income is paid in dirhams. The income from an average-priced property in this development will therefore be 114,800 dirhams (currently €12,528) a year. Although the dirham is a stable currency, as with any exchange rates, its value could rise or fall against the euro over time, so it is advisable to monitor the rate as your investment continues.
When you come to sell your property, you will most likely sell in euros, especially if you are selling to other overseas investors.
If you sell to the local market, you will have the choice of selling in either dirhams or euros.
The Ready2invest fee
The Ready2invest fee for a villa in Mirleft is £2,500 payable for every individual reservation made.
What our fee covers:
FINDING THE DEAL
Finding the deals through our network
of international finders.
Personally visiting all developments for
face-to-face meetings with key personnel and viewing the sites.
Negotiating the discount using R2i reputation and buying power.
Financially structuring the deal for maximum returns.
Completing extensive research and due diligence on:
• Title
• Planning
• Legals
• Country and town
• The development
• The developer
Securing protection for your investment.
Sourcing reputable local English-speaking lawyers in every country wherever possible.
Negotiating favourable fee structure
with lawyers.
Service
Our Investor Relations staff help you through your entire investing process.
Their roles incorporate:
Answering any questions you may have during your investment process.
Guiding you through the contract and payment process.
Helping arrange a Power of Attorney if necessary.
Help organise and liaise with mortgage companies where necessary.
Arranging site visits (1 week’s notice needed).
Help source and organise furniture packs where appropriate.
Help source local letting agents
where appropriate.
Update you on the progress of
your investment.
Provide a friendly ear for any worries
or queries you may have regarding
your investment.
What we don’t do:
We don’t arrange mortgages
We don’t convert currency
We don’t manage finished property
We don’t advise on tax
About Ready2invest
When Jonty and Alise Crossick sold their retail business and moved into property in August 2003, they invested just £300,000. Twelve months later they were sitting on a property portfolio worth over
£7 million with equity of over £3.5 million.
In October 2003, Jonty and Alise set up Ready2invest Limited to share their property strategy with others and deliver a professional investment brokering solution in a fragmented market. The company has become well known for its thorough research and due diligence, and for negotiating and engineering exceptional deals in the marketplace.
“We think like investors, we behave like investors and we personally invest in the developments we launch. Ready2invest grew out of a need to group together with other like minded investors in order to create the buying power to get great deals.”
Over the past two years, the company has built up a customer base of over 20,000 investors, and has achieved over €300 million of off-plan sales in many countries across Europe, each with its own administrative and legal procedures.
“Our job is to build trust with the developer and trust with you. If you know that the properties we offer are well researched, superbly priced, judiciously selected and located in prime spots, then we believe you will buy through us. If the developer is confident that we can sell a lot of properties quickly and efficiently, thereby taking some of the pain out of his transaction process, we can negotiate unbeatable deals with him. The result? You, the investor, wins. The developer wins. And we win.”
Next step
To reserve a villa in Mirleft without delay, please complete and sign the Reservation Form and return it to us with a reservation cheque or bank transfer (details below) for £2,500.
If you are as excited as we are about investing in Morocco, then call us now on
+44 (0)1273 627 900 and speak to one of our property consultants.
Bank transfer details
Barclays Bank PLC
United Kingdom House
7th Floor
180 Oxford Street
London
W1D 1EA
Ready2invest Ltd Deposit Account (Sterling)
Bank Account Name: Ready 2 Invest Ltd
Bank Account Number: 40559725
Bank Sort Code: 20.03.53
IBAN Number: GB35 BARC 2003 5340 5597 25
SWIFT Code: BARCGB22
For full registration and a list of Reservation Terms and Conditions, please download PDF.