In many countries, particularly during the current financial situation that the vast majority of the world is experiencing, developers cannot raise financing, they rely entirely on the funds received by purchasers to pay for the construction of their projects and many use purchaser’s funds to pay for the majority of the land cost. This means that the payment plans that they offer are very limited. The purchasers typically have the construction period to pay 100% of the price (The construction period for most projects is two and a half to three years, thereby equating to a two and a half to three year payment plan).
One of the Major benefits of Brazil’s strong economy is that lending by the major banks to the real estate developers is still available at levels that equate exactly to pre global financial crisis levels. This means that developers have already raised the financing to build their projects before they launch and have bought the land outright.
This enables developers to offer payment plans that stretch beyond completion. The major benefit of these extended payment plans is not only that it makes purchasing more palatable for second homebuyers and end-users, perhaps the biggest benefit is for investors.
If a property is purchased on a payment plan that extends beyond completion the owner may rent the apartment out to tenants and any revenue earnt from these tenants may be used to pay the remaining payments due for the property purchase.
This equates to an opportunity for investors to purchase property with a minimal initial outlay and the potential to own real estate 100% having only paid a percentage of the price with the revenue from tenants paying the remainder.
Areias Coloridas payment plan: