Buying in Morocco

[KingPin]

Guys,

Aren’t we talking about the investment potential on this forum? You only have to look at other hotspots, UAE, Brazil, and India. I'm sure we could find a hundred things wrong with each country. However the bottom line is if you can make a profitable long term investment in those countries and be assured that we are not going to get ripped off in the process.

Talking from personal experience, the UK is an established market where 90% of the rules are transparent and we are all so stressed out that we just do our jobs. Morocco on the other hand is an emerging market built on potential and little else.
I and my partners purchased five apartments in the same development based on promises made by the developer's sole agent to my agents. Subsequently we found out these were blatant lies. We have instructed two large lawyer firms so far. Both agree that we have a good case but the first firm and now the second firm cannot be bothered to chase it up. One of my partners went to Morocco and forced a meeting with the developers and our Lawyer did not turn up (twice). He even went to court and was told that we had to sue the agent in the UK and the developers in Spain (their head office). I understand that Spanish firms have exported a lot of their unscrupulous practices to Morocco and unfortunately the Moroccan government do not know how to deal with it or are unwilling to do so.

This has been going on for some years now and the apartments were supposed to be ready at the end of last year. Guess what, the work has been halted due to the recession. In the same period our other investments in India have doubled. So what I'm trying to say is that despite the pros and cons of a country, is the investment viable, is the country going to grow on it's own merits not what the Government tells you is going to happen, can the locals afford to buy your investment if you ever want to sell, and finally are you protected should something go wrong. For me, Morocco was an expensive lesson well learnt.

 

[markwillenbrock]

Any developer who is selling off plan in the current economic climate is going to be unstable. Even if they are solvent, why finish a development where a low percentage of the flats have been sold? These companies are in this for the profit, and will be prepared to engage in court cases if they turn out cheaper than completing an unsaleable project.

The Moroccan legal system doesn't give much hope for those seeking legal redress. Court cases are allegedly 'traded' between avocats, and as a foreigner, unlikely to be retaining your lawyer in future, you are a soft target.

Cases have been won by foreign nationals, but it's only likely with staggering levels of personal effort (ie representing yourself and hiring a translator) or intervention from high level Moroccan officials.

Despite all this, Morocco still has excellent potential. But being a property investor is more complicated than signing a contract for an off plan apartment, and then assuming Western standards, ethics and legal recourse.

After all, if it was that easy, why wouldn't everybody do it?

 

[aicbo]

I am sorry that you got into the wrong hands. If you want to do business in Morocco, it is necessary to have a compatriot as one can rely on and have the right contacts. I myself have gone through a lot but now I have the right people around me ...

 

[striiing]

uh-huh

HI,

I have been in Morocco in and out for 3 Years and can understand how rife the corruption is in the government departments. I had problems with my tenants too. Finally I managed to make a mutual agreement for the tenant to vacate.

As I understand in Morocco is that if you dont make the right tenancy agreement then you have to pay the tenant all the rent back to vacate from your property by the Moroccan Law. Most people prefer to rent appartments through estate agents.

The problem with the people there is that they like to capitalise on every opportunity they can have on a foreign investor. In morocco there is no regard for society and every one there is for themselves. For example when people board the bus in Morocco, everyone tries to push through the que. Why do they do that when everyone will eventually board the bus.

Also if you have a problem with water bills, telephone bills and etc the customer service is just zero.

Finally the moroccan dirham currency is not recognised outside Morocco. There are control restrictions and taxation to convert the currency for exportation. 20% tax to export money from a goods industry and 10% tax to export money from a service industry!

Why do investors bother to bring money in Morocco. Its just a trap! As an investor do you realise that the hospital and medical bills are expensive (I once paid 2000 dirhams in a clinic to have xrays and injection to kill the pain)? Do you realise the Moroccan mobile meditel and Maroc telecom is more expensive in tariff than England? Do you realise you have to pay garbage tax on your property? Do you realise you cant buy a car in Morocco until you have a Moroccan residence card? Do you realise that when you go to shop in the souk there are no set prices displayed and that you have to bargain all the time? Do you realise that to marry a moroccan you need to make a dosier of approx 13 documents of yourself plus your fiancee, and you need to seek approval from the judge for marriage? Do you realise that you cant deposit dirham into your bank account until you have a moroccan residence card? Do you realise that for any minor fault the moroccan police will ask you for bribes? Do you realise that you can go to jail for giving a bank cheque from an account with insufficient funds? Do you realise that Morocco has big problems with prostitution, peadophilia and child labour? Do you realise that the minimum wage in Morocco if you happen to be bankrupt and work is approx 1550 dirhams? Do you realise that in August the temperatures are extreme of approx 45 degrees? Do you realise that electric bills are more expensive in touristic areas than local areas? Do you realise that even to use a public toilet you need to tip the waiter? Do you realise that speaking a foreign language will get you in trouble to buy your produce from the souks as they will inflate the prices? Do you realise that shopping for clothes or food is more expensive on average in Morocco than in England? Do you realise alot of Moroccan migrants make there lives more economical to live in Spain, France, Netherlands, Belgium and etc than in Morocco?

My advice is to invest in England!

Yeah because in England everything is played by the book....

 

[striiing]

Got a apartment due for completion in May 2010 in Bella Vista, Cabo Negro. Has anyone else invested here? also does anyone known the current interest rate for a mortgage in morocco? i heard the longest mortgage you can get in 15 years, is this true?

 

[bess]

look at the bella vista thread, here or on 'eye on eye on worldwide' to compare notes with others. I have a couple fo flats for 2-9 people 'next door' at Miraqdor Golf and give a 10% discount for people buying flats nearby, many people have found it useful, when they go over to sort things out. Google Secret Morocco and you will find my website!

 

[PROPERTY FORWARD]

Just enquiring how off plan property in Tetouan is panning out. With the build of a link to connect to Spain, Tetouan was said to be a potential hot bed for investing in Morocco.

 

[Tangier]

are you wanting to hit the beaches without having to think about furnishing your vacation home? With moroccan living, we can install a furniture package within the month at the lowest price on the market. Contact us at moroccan-living.

there are lots of furnishing shops in morocco and dont cost the earth look around..it's fun looking and buying.

Lots have paid for furniture packs and not had them.
Lots have lost lots of money ....

 

[philamena]

plya vista

Hello, Does anyone have any information on the latest update about Playa Vista development in Morocco? Desperate!

For those people reading this post im assuming you've already purchased in Morocco or are currently carrying out research on the country / developments on offer hence looking at the Morocco Section, I hope this section provides you with all the information you are seeking.

To start with, for those looking into buying in Morocco i'll mention why I currently believe Morocco is such a good country to invest in.

1. Huge investment in Tourism, objective of the "Plan Azue" is to increase visitors to 10 million by the year 2010 & to provide concomitant infrastructure & facilities.
2. Moroccan government has signed "Open Skies" agreement with EU to allow European airlines to operate at Moroccan airports without restrictions.
3. The "Open Skies" agreement has seen the arrival of low cost airlines such as Easyjet, Thomsonfly & Ryanair announcing new routes, more to be added in 2007.
4. Favourable tax laws for foreign investors - no property tax for 5 years & how capital gains tax.
5. Mortgages are available with 60 - 70% the standard amount borrowed.
6. Close to the Costa del Sol - 30 minutes by hydrofoil to Tangiers from Tarifa & Algeciras 7. Year round sunshine - Hot summers, mild winters, an ideal winter sun destination.

There are several resorts being introduced in Morocco, developers from Dubai are also investing Millions, Qatar recently launched Al Houara, Emaar will be launching Tinja, currently most of the focus seems to be on the "Plan Azure" Resorts - Mediterrania Saïdia Resort, this resort is on the first on the "Plan Azure" & has the Kings backing. In brief the resort will have; 9 major hotels, 3 golf courses, 840 berth marina, huge commercial centre, water park, sporting facilities.

I am also happy to advise / assist on developments and have extensive knowledge on most developments, especially those in nothern Morocco.

Feel free to ask questions or if you wish post me a pm

Regards

 

[Tubitha]

Guest Houses

For those people reading this post im assuming you've already purchased in Morocco or are currently carrying out research on the country / developments on offer hence looking at the Morocco Section, I hope this section provides you with all the information you are seeking.

To start with, for those looking into buying in Morocco i'll mention why I currently believe Morocco is such a good country to invest in.

1. Huge investment in Tourism, objective of the "Plan Azue" is to increase visitors to 10 million by the year 2010 & to provide concomitant infrastructure & facilities.
2. Moroccan government has signed "Open Skies" agreement with EU to allow European airlines to operate at Moroccan airports without restrictions.
3. The "Open Skies" agreement has seen the arrival of low cost airlines such as Easyjet, Thomsonfly & Ryanair announcing new routes, more to be added in 2007.
4. Favourable tax laws for foreign investors - no property tax for 5 years & how capital gains tax.
5. Mortgages are available with 60 - 70% the standard amount borrowed.
6. Close to the Costa del Sol - 30 minutes by hydrofoil to Tangiers from Tarifa & Algeciras 7. Year round sunshine - Hot summers, mild winters, an ideal winter sun destination.

There are several resorts being introduced in Morocco, developers from Dubai are also investing Millions, Qatar recently launched Al Houara, Emaar will be launching Tinja, currently most of the focus seems to be on the "Plan Azure" Resorts - Mediterrania Saïdia Resort, this resort is on the first on the "Plan Azure" & has the Kings backing. In brief the resort will have; 9 major hotels, 3 golf courses, 840 berth marina, huge commercial centre, water park, sporting facilities.

I am also happy to advise / assist on developments and have extensive knowledge on most developments, especially those in nothern Morocco.

Feel free to ask questions or if you wish post me a pm

Regards

I would like to understand how the legislation surrounding guest houses in Marrakech works. I have heard a number of things surrounding 3 and 5 bedroom riads which leads me to believe that nothing under 5 bedrooms can be classed as a guest house and that this legislation came into play recently.
As my husband and I are considering buying a riad to renovate in the mdina and then running it as a guest house to cover costs we would like to stay on the right side of the law. Our budget would stretch to a 3/4 bed titled riad but I think a 5 bed is out of our budget right now.
We dont want to make a mistake and buy something costly which we cannot recoup any rental from, in which case we will stick to looking for something of a smaller size for family and friends but again we are unclear if we are outside of the law if we take rental from this on a regular basis.
If anyone can untangle this one I would be grateful is it is holding up our decision making process until we understand this better.

 

[Lee Filkins]

subject

Welcome to marketing yourself. Most of the information you quoted is out of date or has been revised e.g.

1. Huge investment in Tourism, objective of the "Plan Azue"

Agree
is to increase visitors to 10 million by the year 2010

We have passed the date. The target has never been met despite of fiddling the data to please the King.


2. Moroccan government has signed "Open Skies" agreement with EU to allow European airlines to operate at Moroccan airports without restrictions.


Yes, where are the cheap flights.


3. The "Open Skies" agreement has seen the arrival of low cost airlines such as Easyjet, Thomsonfly & Ryanair announcing new routes, more to be added in 2007.

This is 2010, where are they. there is still no flights to Tangiers from UK


4. Favourable tax laws for foreign investors - no property tax for 5 years

not correct

& how capital gains tax.

try & sell & take the money out. the tax man will have his own price & the selling price & will not budge. any payment due if not paid will incur interest on the outstanding alleged tax. the truth is all this is a facade.

5. Mortgages are available with 60 - 70% the standard amount borrowed.

Try & get one. Files gets lost and nobody looks at the files for month the information becomes obselete & the mary go round carries on. Did you know Morocco is the only Country in the world which charges VAT on interest rate of 10% so if the rate is 5% they will charge you 0 .50% as VAT, this means you are paying 5.50%. I have a pretty good idea where this 0.50% goes.

6. Close to the Costa del Sol - 30 minutes by hydrofoil to Tangiers from Tarifa & Algeciras 7. Year round sunshine - Hot summers, mild winters, an ideal winter sun destination.

so, what has this got to do with morocco.

In so far as your diversion for the advertisement is concerned re Riad. dont bother just goive some bakshaish.

 

[Tubitha]

So your suggestion is not to buy there then as things have not lived up to expectations is that right?

Does anyone else have a view on this?

 

[Lee Filkins]

subject

I am not sugguesting to buy or not to buy. I am just stating facts & experience. If people wish to buy its their choice who am I to say they hould & they should not.

I certainly would not buy with all those issues & for the prices demanded. I rather put that money towards buying, in England, Spain, South of Italy, Portugal. Atleast things dont work around the whim of the King.

 

[Tubitha]

Ok thanks for the advice it is useful to have an update on the postion in Morocco and how things have worked out over there

 

[philamena]

playa vista news/

Hello Does anyone have news on the Playa vista development please?

 

[LOUKIC]

In comparaison with other Northern African Countries (like Egypt),Morocco has a well regulated buying process and has several tax advantages such as no income taxes for the first three years from completion if you are purchasing off-plan. There are also tax advantages for new businesses, retirees. It is correct that there are no tax exoneration for the council taxes (unless it is your permanent home) but they are not expensive in comparaison to the UK or Europe.
Mortgages are available on 70% of the property value but it is wise to use an local and experienced mortgage adviser to assist through the whole mortgage application.
Capital gain tax is a bit high: 20% of the net profit (gross profit less mortgage interests and other expenses) with a minimum of 3% of the selling price.

 

[Lee Filkins]

Loukic: Go and update yourself instead of posting incorrect information.

 

[LOUKIC]

Very updated thank you.
Kindest regards,
Loic

 

[goldcoast]

Hi I'm new to this forum but I have a bit of experience in investing in Morocco as I have done that in the city of Fes where I have been following my project for over 5 years now.
I have been reading the different posts describing an investment in Morrocco as an easy and fast way to make good money; whilest I still think Morocco offers great opportunities for investment I think people will have to be prepared to follow a pathway that is not as easy as it is frequently described in the forum. It is important to state few facts:
The first is that Morocco is generally investing a lot of effort and money into developping a good infrastructure to make of tourism one of the most important contributors to the country's economy.
The open skyes policy has really been implemented and over the years there has been an increase in number of direct,low cost flights from Europe. Have a look at ryanair for example flying from Italy to Fes: Currently there's drect flights from Milan,Pisa, Bologna and recently Rome. Ryanair has even opened a Milan/Tanger route and yes it is cheap. I normally get a return flight for around 80 euros.
Off course anyone could decide to invest in other European countries; I doubt it would be cheaper and someties you would fall into the same problems I have encountered in Morocco. The example of Southern Italy could be a good one. I come from the south of Italy and we have seen a lot of British people coming to buy a traditional house in the countryside or in the historical centers of very characteristic small southern Italian villages. At the begining it used to be cheap, especially for those properties in need of restauration but it lasted not even a year until Italians realized that they could make good money out of it. You would also have to face corruption issues just as much as you'd have to face in Morocco ( transparency international ranks Italy very low pretty much the same ranking as Morocco. To my experience, when it comes to corruption the only difference between Italy and Morocco is simply that bribery in Morocco is cheaper). I even sold an old property in the Apulian countryside in need of restauration to an English coupple; the money that I made from the sale I invested in Fes where I bought a XIV century home in the medina and restaured it to be a maison d'hote.

Five years it has taken me to bring it back to its former glory, restauring old zellije, XIV century old carved wooden balconies and plaster arch which I found condamned into a wall. I did not invest in one of the hundred of thousands of new deelopments few kilometers of the coast of Spain. I know nothing about that, apart from seeing that they all look pretty much the same and seem far away from what a lot of the tourists coming to Morocco are looking for. I see more wealthy Moroccans interested in that sort of European style living than foreigners.
On the other hand Fes, like Marrakech is flooded by tourists looking for exoctic, out of time, historical type of holiday and those people who have understood that are actually earning good money and enjoying a good return on investment. I have friends who operate succesful maison d'hotes and charming small hotels with high occupancy rate and an average income of 8000 euros net a month.

What I think needs to be clear is that to take advantage of the good investment opportunities in Morocco people need to know there's a price to pay; you can't just throw some money into a purchase of a property and than step aside and start counting the money coming in. Most people that I know, including myself had to move to Morocco not only to follow the purchasing process, but the restauration, the start up and the consolidation. Even now that they have well established business, if they go on holiday for few days, they close the business and re-open when they're back. If a change of life paired up with a good investment and the chance to live a confortable life is what you're looking for than Morocco is a good country to do that. I would doubt of any investment in Morocco advertised as a self-managing money making deal. It would probably be...just not for you.

 

[goldcoast]

I would like to understand how the legislation surrounding guest houses in Marrakech works. I have heard a number of things surrounding 3 and 5 bedroom riads which leads me to believe that nothing under 5 bedrooms can be classed as a guest house and that this legislation came into play recently.
As my husband and I are considering buying a riad to renovate in the mdina and then running it as a guest house to cover costs we would like to stay on the right side of the law. Our budget would stretch to a 3/4 bed titled riad but I think a 5 bed is out of our budget right now.
We dont want to make a mistake and buy something costly which we cannot recoup any rental from, in which case we will stick to looking for something of a smaller size for family and friends but again we are unclear if we are outside of the law if we take rental from this on a regular basis.
If anyone can untangle this one I would be grateful is it is holding up our decision making process until we understand this better.

The truth is that legislation tends to change all the time and not just in general but from town to town. What has been happening in Marrakesh for example is different than Fes, the city where I decided to invest.
When I bought my house there almost six years ago I looked at properties that could be developed into a 4 bedroom guest house which was the minimum you had to have to be able to hope to get a licence to operate as a business. There were also a lot of other rules such as 70% of the rooms had to have private bathrooms, the need for comunal guest bathroom, the presence of a typical moroccan salon furnished with carpets and original moroccan crafts. It was mandatory to have a dedicated soundproof room for customers to make calls!!!
At the same time in Marakesh foreigners where complying to none of the above and still setting up beautiful businesess. All that has changed now and and I think a lot of those silly restrictions do not apply anymore. Having said that i did strictly followed the rules, I hired an architect and a structural engineer and presented plans that were 100% compliant. By doing so I thought I could overcome the problem of having to constantly bribe people and authorities to go ahead on my project. Did it work? At the end it did but it has taken me 5 years to finish my project and still had to bribe.
You can now have a guest house with as little as 3 guestrooms; you're just classified as a maison pret a louer and not maison d'hote. What you need to be careful with is how you intend to operate. I mean, will you set up a company that will purchase a property and make a business out of it or will you just be a private owner that will want to run his house as a business or set up a separate company that will rent the restored property off you to run it as a business? This option will greatly influence your ability to repatriate some of the money you earn from your business or from its sale should you decide after few years to leave morocco.
I think Fes would present more opportunities than Marrakesh were the prices have gone way up and you face a lot of competition. Fes however is a more complicated place: the quality of the artistic value of the houses in the medina is higher but that makes it more complicated to restaure. One thing for sure is that you must be there all the time to follow things up. People there will tell you how capable they are when it comes to restauring old houses but the truth is they don't really care about doing things right, they will simply want to make money. It's up to you to be there and controll what they're doing and make sure they're doing things right and not just putting make up on. One day you could find wall collapsing in a room full of guests and people dying because instead of fixing the cracks on the walls( what you asked and paid for) they just put a layer of plaster and made it all look nice.
When you look for properties to restore they will tell you that it will cost you about one and half the ammount of mony you paid for the purchase; that's not true but a lot of people find out when they've already spent a lot of money and can't back off anymore.
Having sad all this, once you finish and you're able to run your business, in Fes you could make really good money, more than in Marrakesh. I have friends who run a 5 bedroom maison d'hote and earn an average of 8000 euros net per month.

Let me know if you need more advice. I'd be happy to help.