We introduce a new business model in a very conservative real estate market in Marbella. It's amazing how much the market lives on stereotypes. The imposed fashion for so-called architecture "boxes": contemporary houses made of glass and concrete, has led to the fall of such a concept as individuality. It is becoming a lost past. Is it possible to turn the situation around, at least for such a niche as the luxury real estate sector? The value of such properties is so that the concept of individuality and selectivity shouldn't just disappear. And it is not important that the market classifies almost all properties, worth over a million Euros, as luxury. What is required for that? How to be sure that the concept of exclusivity would not be just memory.
CONTENT:
Villa Construction in Marbella
Those customers coming to this world' s resort and thinking of staying here and buying property as a holiday home on the sea in the summertime always ask themselves the same question: to buy or to build. Most believe that it is much easier, cheaper and faster to buy ready-made property. Who really thinks about building?
As a rule, those who have already bought property in Marbella, plunged into the local flavor of life and service, have learned from their painful experience how far from the quality of purchased property is, in which all the time they have to repair something. Ads, describing the charms of Marbella real estate ended, realtors have received their commission. They are no longer interested in the client. We would not go into detail about the quality of building on the market, but say that it is generally far from being perfect. One of the reasons is the stereotypes of thinking.
They build in their old ways, as they got used to, the competition is large, They have to think about the costs, otherwise they will not get a deal, developers require compliance with deadlines, the margin in the construction business is relatively small.
As a rule, for these customers there is a question of building a house for themselves, and originally purchased housing is temporary.
The second category is that of more affluent clients. They are thinking about a different kind of property that meets their standard of living and quality criteria.
Finally, the third category is entrepreneurs who purchase the property for resale. They are of interest to us under the heading of the article.
In any case, the construction, in the concept of any client is a choice of an architect. There are many of them on the market and you could take your time talking and getting to know each one, especially when it concerns expensive real estate. This is where we first meet with disappointment and bewilderment: it is almost impossible to choose. All architects have experience, have built many buildings, all are worthy to be partners for the client.
The architects, understanding that the process of making a decision and selecting a plot for construction is labor-intensive and time-consuming, are actively working with the developers. The developers have alternative tasks. They have an idea of the type of the land to offer, they get and supervise all the permits for construction, they order architectural projects, and then they suggest a ready variant of the decision to the client.
The architect has to wait for the client to visit him anyway. If the client doesn't select the prepared option, then he has to work even longer.
The mentality of clients is so that they think of the architect as their principal contractor. These professionals know everything and fulfill all the tasks for the client. This is partially true and most architects offer turnkey services.
A conflict of interest happens when the building of a new villa is required for resale with the highest rate of return. Stereotypes work in a way that makes it impossible to change the average margin in a competitive market such as the real estate. The only solution for the investor is to build a unique property, so unique that a higher-than-market price can be asked for it. And that is why, when visiting an architect, those investors look at what is on offer. But is it only the architect who is so important for that? They do their own great piece of work in the project. The process of designing something unique and outside of the traditional stereotypes requires a lot of time and a lot of resources. They just don’t have that time, and clients, with rare exceptions, have no desire to overpay them for the unique design. Unfortunately, the mentality always prevails and everyone thinks the design cannot cost too much. In fact, it is the design that costs money. Only design generates the value.
Turnkey Projects
America was the very first to practice a different way of working, by promoting turnkey service in the development of private villas and other properties. This task was taken up by architects, who have to combine both functions as an architect and a developer in more and more ways. This is the only chance to profit more. In Spain, for the first time they took a different way. Realizing that the main issue is design, the quality of which ensures the value of the property at the end of the process, on one hand, and the well-established mentality of the consumer not to overpay for design, On the other hand, the Investment Club project was founded. This project is directed by individuals who have spent more than 25 years in luxury industry. Also, the team of the club shares a different vision on design and understands how important it is to create unique property. It takes talent to design uniqueness; it is extremely rare to have the talent. In the luxury industry, in parallel with talent, you need both experience and expertise. It is impossible to step into this niche without being prepared. It is impossible with no understanding of what luxury is.
The talent has to give birth to ideas that are not available on the market. And then, these ideas could bring about a small revolution in the industry. There is no profession like "Designer of Ideas" in fact, but it is fundamentally necessary to achieve the new heights in the industry. These are talented and creatively minded people who are capable of coming up with out-of-the-box ideas. Sure, they're gems, but the ideas are what bring uniqueness.
The business model Investment Club in Spain is the quintessential specialists, who are able to generate this uniqueness. The most important thing in this business model is to combine into a team specialists like idea designers, architects, interior designers, decorators and a developer to be business partners, not contractors, each of them doing their part of the work. But that is just a part of the concept.
The second part of it is the capabilities in production and the cost of production itself, allowing us to implement projects for any complexity and, at the same time, do not go over the budget and do not reduce the profit rate.
That means we have to have our own factories and deliver everything we need for the decoration without any trade markups. I anticipate the question of how this is possible. In fact, the answer is simple. It's not the number of those factories, but the essential products that they can produce.
These are the key products for the projects: woodworking, including furniture production, marble and stone work and carpets. Ironically, these are the products we are choosing as foundational. It seems, why should it refer to carpets? We certainly can do without this utilitarian thing, especially as there is a great number of carpets in the world and it is possible to select them both in design and in price. It's all very true. But do you remember what we were talking about in the beginning? Design can work wonders and increase the value of a property.
In this article "Build a Villa in Marbella" there is a detailed description of how and why the design works that way. Read it in full, and much will be clear and understandable.
It sounds like a simple as a carpet, but what can you do with it? Very many things.
The final cost of the property is always the client's perception. If we ask for too much, and the client feels the price is not justified, he can refuse to buy. But if he finds that the impact of the property is that it looks more expensive than it is being asked for, that's where that magic comes to play.
Going back to area rugs, here's a prime example. A rug is not the same as a rug. We are talking about rugs like these to change the mood and to bring a unique character to the interior. We have this kind of a factory.
Let's take the rug away and see what happens with the interior. It would just fall apart. No, it would not be worse, but we lose the atmosphere, and that means that we lose one of the key parts of our uniqueness - the WOW effect. It is the most important thing that affects the sale price.
The same happens with marble mosaics, marble inlay and in general with the use of marble and onyx in the interiors.
Cost to Build a Luxury Villa in Marbella
After reading all the above, the next question is the construction cost, with all the conditions and opportunities offered by the unique team of the Investment Club.
Construction ranges from 1,400 to 2,500 Euro on a turnkey basis. And then the magic of transforming the property into a unique art object starts.
We have devoted this article to it.
Without going into detail and without disclosing all the secrets of craftsmanship, we only give some figures related to the benefits of these projects. Minimum margin is about 50%, maximum 300-400%! It all depends on the level of design, the conceptual idea, location and our Know-how to transform the property into a unique phenomenon in the market. In order to really get 300-400% profit, it is necessary to have extraordinary ideas. Then, in the implementation of these ideas there is no point in thinking about the budget. At such approach the main task - to ensure such rate of return comes to the fore. It is precisely this problem is solved by the Investment Club in Spain, and it is precisely this that distinguishes us from investment funds and developers on the market.
In order to implement projects of this level it requires too many things. Therefore, there is no competition for this business model, and Investment Club has a very narrow niche in real estate market. TURNKEY SERVICE FOR VILLA CONSTRUCTION & INTERIORS