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Real Estate / Analytics / Bulgaria / Real Estate Bulgaria / Georgia / Real Estate Georgia / Italy / Real Estate Italy / Montenegro / Real Estate Montenegro 23.12.2017
How to build a villa on the sea and not go bankrupt?
When is the game worth the candle? Buy or build - we understand what is more profitable.
Search for real estate - as a search for your soulmate, everyone does it differently. This analogy is appropriate when it comes to realizing your dream - at home by the sea (houses in the mountains, etc.). Someone has this love at the first sight, someone has a long search for "the right one".
Sometimes, "the right one" can not be found. This is not a rare story when looking for a villa. Then there is an idea to buy land and build a house on your own. Often such a solution is offered by a realtor. Let's try to understand the pros and cons of this option.
Benefits of building a house
1. You will receive the house exactly according to the project chosen by you, with a deliberately appropriate layout, location, exterior, and interior. In general, it will be such a house that you like;
2. Quality of construction, if you are competent in these matters, you will be able to control directly during the construction process;
3. The price for 1 m2 of construction, called a realtor, in total with the value of the land, sounds more tempting than the price of real estate for a quality built villa in the same area.
Risks that need to be considered before starting construction
A realtor is not a builder. If a realtor offers you construction services, then most likely a realtor will be an intermediary between you and the construction company or a realtor will experiment himself. The latest version is the riskiest. Since professionals who are able to perform qualitatively construction work are always in demand and do not need to work as realtors, which are certainly less profitable. It is possible that the realtor is a conscientious person and just trying to help you by picking up a builder with a good reputation. This is a valuable help. But, unfortunately, this happens less often.
You need to get into the procedure for obtaining a building permit and then putting the house into operation. Often it happens that the purchased land is not suitable for local regulations, unfortunately, it can be found out after construction. For example, in the market of Montenegro, many villas whose owners have never managed to legalize them. In Bulgaria, it is not uncommon for a builder, often even experienced local construction companies, to obtain a document called "act 16" - an act of commissioning. Moreover, the previous acts were often obtained without any problems. The assurance of the seller of the land or realtor in the well-being of the object is a good thing. Especially if you are promised assistance with subsequent processing of documents. But it is still worth paying up to 500 EUR and ordering from the unincorporated with the seller and/or realtor of the legal company the verification of the land and the prospect of issuing all the permits.
Terms of registration of documents for construction are different. In aforementioned Bulgaria, as well as Russia or Ukraine, the timing of the approval of the architectural design and permits can stretch for a year or even several years. Not knowing the local legislation and practice of work of local officials, to carry out this process itself is often very troublesome. It is easier to use the services of qualified specialists.
In addition to the legal part of the issue related to the choice of land, there is still a question of geology. With today's technology, you can build on almost any land. Even in the swamp. There are building technologies even in the sea or in the middle of the rivers. Therefore, if, for example, you have land on an unsuitable soil or a high level of groundwater - it is still possible to build it. But the more problems, the more money will be spent on their solution. For example, your house will need only a strip foundation if it is hard ground but it will be necessary to strengthen it with soft soil, which can lead to additional costs. The same can be said about construction in areas with the hilly or mountainous terrain. Differences in the level of relief in the building site or directly next to it may require the construction of retaining walls and earthworks, the cost of which you will not be happy. Therefore, we advise you in advance, prior to the purchase of land, to make a geological study of the ground with pits and consult with the architect. This, of course, as in the case of lawyers, additional costs. But they can save you from huge unforeseen expenses if you make the wrong choice of land.
Test construction: how to build a house and not go bankrupt
If you managed to buy a suitable land for construction, make an architectural project, together with its constructive part, coordinate it and get a building permit, then you will have to build the house itself. This issue requires a separate discussion of risks.
There is no price without a project
Let's start with the choice of the builder. Any price that you will hear without a project and its constructive part is a fiction. If you were told, for example, that the square meter of the constructed area will cost 600 EUR and this is exactly the same figure that was called the author in Montenegro, then do not rush to believe. To name the price for construction without a project is not serious at all. So how should you estimate the cost of construction? If you do not know the price, it is difficult to understand whether it is worth to take it.
You can understand the price only by getting a project. A project, in turn, is difficult to do without a specific plot of land. So what is the solution? We recommend you to pick up your favorite project on the Internet. If an architectural project can be downloaded today from the Internet, then its constructive part will have to be paid. This will allow you to talk with developers by having all technical documentation on hand.
However, the project purchased on the Internet will not replace the work of the local architect. When agreeing with him, you can ask him not to do the project from scratch but to adapt to the local norms the project that you have already found and bought.
Do not forget about what is called "technical supervision". Start with the constructive part of your project. Even if it was done by an experienced specialist, it is worth asking another experienced specialist to check it and find mistakes. Any engineer is not God and therefore can make mistakes. It is cheaper to make sure beforehand that they really do not exist than to detect them during construction. Avoid the amateur - all documentation, including the verification of the project, must be certified by officially working enterprises in this area so that in case of problems, you know where and whom to address the claims.
Cost of construction
When agreeing with the developer, do not forget that you are a foreigner. So, in his eyes, you are an easy prey. In our practice, there were cases when the declared price exceeded the present price several times. Sometimes the bargain is like shopping in the eastern bazaar. If you feel sorry for your money, then do not be lazy and go through a dozen potential contractors that get all the versions of the price for building your facility.
It is worth noting not only high prices but too low. A very low price of the property can mean that the contractor is just trying to get your order, and then, already during construction, the price will rise, you will be told about the fact that certain types of work have risen or not been taken into account in the initial arrangement. We recommend you to have an official agreement with the contractor, compiled by competent lawyers, in which the volumes of work, their quality, terms of implementation and cost will be accurately recorded. Also, the contractor's responsibility for each of these positions should be mentioned. We do not advise you to choose a contractor whose previous work cannot be looked at and convinced of their quality, and also proved that those are really his works.
Do not be tempted by the offer of payment "in black." It is accepted to pay taxes honestly all over the world, which means that you might get a proposal "to make cheaper" but not for a licensed firm and bypassing a formal contract with official payments. We advise you not to be tempted at a more attractive price if in return you lose the opportunity to recover from the contractor the damage caused to you. For the safety of your investment in real estate, you need a formal contract and the guarantees and responsibility of the contractor prescribed in it, even if it is a very nice person, even if it is well-spoken about and even if you are told that "it is not accepted here".
Also, avoid prepayment. It is best to agree on the stages of work and pay for them as they are completed. Even if you have to make a deposit, then do not pay more money than the materials needed for the next stage cost.
Underwater stones from the contractor
What kind of dirty trick can you expect from a contractor in the process of work? The first one is a blatant violation of the deadlines. Especially if you made a deposit. It should be borne in mind that in the southern countries, as a rule, the leisure rhythm of life is welcome, and German punctuality is not widespread.
Attempts to save on the quality of materials and work by recruiting an unskilled labor for those jobs that require the qualitative implementation by specialists is the second issue.
The construction of a private house or a villa is not the construction of a multi-apartment complex, which means that if you hired a construction superintendent, then it is not his only job. Probably, he will be involved in other, more profitable objects for him. If he is not involved anywhere, there is a reason to doubt his competence. Demand his daily presence during work. He is not needed for the whole working day but at least on the benchmarks. Lack of control is one of the main reasons for poor quality.
Use the services of an independent construction engineer for technical supervision of the construction site. He should help you to notice the mistakes and shortcomings of the foreman on time.
When buying building materials together with the builder, bargain in respect of discounts. Often superintendents have a discount in certain stores and firms and therefore, take customers there.
Please note that a construction specialist will not necessarily be a specialist in facade work, interior design, or communication. The temptation to pass everything in one hand can turn into unpleasant surprises.
In our experience and experience of our acquaintances there are very unpleasant stories. For example, in Montenegro, a Russian customer bought an old house and ordered the construction company to demolish it and build a large villa in its place. As a result, he invested several hundred thousand EUR in the construction and equipment of a magnificent mansion on the mountainside overlooking the sea. A couple of years later, the happy owner tried to sell his offspring for at least 50,000 EUR. It turned out that the developer built a new house on the foundation of the old one, which was not designed for such loads, and the villa began to slip off the slope. Another unpleasant story that we know happened in Turkey, where a quality built house received a number of problems due to poor-quality facade works. The customer mistakenly decided that once the contractor normally poured reinforced concrete, he could make a facade and a roof. As a result, the facade was covered with cracks, and the flow of water through the roof was ruined by expensive repairs. Such stories are not uncommon.
Buy or build?
If you have experience in building houses and you are well versed in the nuances of building materials and the quality of the works themselves, then the construction can save you considerable money. Also, do not forget that any process requires personal control and presence. If you are well versed in the local market situation of construction services and can choose a contractor who you can trust, then this is a worthy alternative to your own competence and personal control. In all other cases, you go out onto the field of something like "Russian roulette": the cartridge is only in one nest of six, but the result can be regrettable. To risk or not is only your choice.
How not to get a headache instead of a dream house?
The most reliable way to buy a property is to buy a house in a complex of villas, the so-called cottage complexes, followed by servicing the house by a management company. And, that is obligatory, with the condition of guarantee of the seller of quality of construction works stipulated in the contract of purchase and sale. Problems happen with any construction but it is important that they are solved not by you but by people who received your money.
If you decide to buy a house by the sea, first study what real estate prices are on the coast, and which ones are just a marketing move or an object with a dirty trick.