Off-plan investment in Batumi: the time to income, assignment and risks

Off-plan investment in Batumi attracts buyers with an early price and interest-free payment plans. But years pass between the first instalment and the first income: construction, completion, handover, renovation, furniture. We calculate the investment month by month up to the first guest or the sale, and check the developer and the contract before the first payment.

Off-plan investment in Batumi: where the money comes from

There are two routes. The first is price growth by completion: the apartment is sold by assignment before completion or right after it. The second is letting after completion: the apartment is finished and let by the night or long-term. Investors often plan the first route and end up on the second, because selling on time did not work out.

Nobody guarantees price growth by completion. It depends on the market, on the developer and on how many similar apartments come up for sale at the same time as yours. So we calculate both routes in advance.

The early price and payment plans

At an early stage developers sell more cheaply and often offer interest-free payment plans. We compare the payment-plan price with the price for full payment: for an investor with the money in hand the difference can be noticeable, and it is useful to know it before negotiating.

In the usual payment-plan scheme there is no escrow, and payments go straight to the developer. Until full payment the apartment stays with the developer, and title is registered to you under the terms of the contract. How payment plans work and what to check in them is explained on our page about developer payment plans.

How long to wait for the first income

We count it by month: how long until completion under the contract and at the real pace of construction, how long the handover and renovation will take, when the furniture will arrive and the first photo shoot take place. If the apartment is handed over in white frame, a turnkey renovation starts from 570 ₾ per m², and that is a noticeable part of the investment. If you are buying on a payment plan, the payment schedule goes in here too: part of the money goes to the developer before the apartment exists, and the last instalment often falls in the months of completion.

All this time the money works only towards price growth, if there is any. Accepting the apartment from the developer with a defect report starts from 480 ₾, and it is worth doing before signing the handover certificate, not after the first rain. What changes when renovating new-build apartments is explained on our page about renovating a new-build apartment.

Assignment before completion

If the plan is to sell the apartment before completion, we read the assignment terms before the first instalment. Whether the developer's consent is needed, how much the developer charges for it, whether you can sell before full payment. Tax on an assignment may be calculated differently from tax on selling an apartment, and we check it in advance with a tax consultant.

Competition in an assignment is often created by the developer itself: it keeps selling similar apartments in the same building, sometimes at a lower price than yours. The buyer will compare. The buyer also weighs the construction risks, so the assignment price is usually lower than the price of a finished apartment in a completed building nearby.

When the building is completed

In a new building by the sea many apartments were bought by investors, and after completion they come onto the letting and sales markets at the same time. Rents and prices in the first seasons are under pressure until the market absorbs the supply.

So we choose an apartment that will stand out: a rare layout, a good floor, a view that will not be blocked. And we calculate the first season after completion more cautiously than the following ones.

The developer and the contract

We check the developer from the documents and the completed buildings: the company, the plot, the permit, court cases, and how earlier buildings have survived several winters. A developer check starts from 1 200 ₾; more on our page about developer checks.

In the contract we look at the payment schedule, the completion date and the penalty for delay, the condition of the apartment at handover, and the terms of assignment and termination. A payment plan review starts from 660 ₾. Separately we look at what the developer must deliver at completion: entrances, lifts, the courtyard, utility connections. A building without a lift or with an unfinished courtyard puts off both guests and buyers.

If construction is delayed

A delayed completion is the most common construction risk. What happens in that case is decided by the contract: whether there is a penalty, whether the contract can be terminated and the money returned, and within what period. If there are no such clauses, we agree them before signing. What to do if construction stops is explained on our page about off-plan apartments.

How much an off-plan investment calculation costs

An investment calculation with a property shortlist starts from 1 200 ₾: timelines, payments, finishing the apartment and exit scenarios. A developer check starts from 1 200 ₾, a payment plan review from 660 ₾, accepting the apartment from the developer from 480 ₾, and a turnkey renovation from white frame from 570 ₾ per m².

The final price is set after we review the task and agree the scope of work. We do not promise price growth: the calculation shows scenarios and assumptions.