23rd March 2010: Marrakech Property News
Marrakech has always been a popular destination for discerning tourists - with 333 days of sunshine per year and very easy access from northern Europe it offers something for everyone. It is already competing alongside main stay European cities in the high earning sector of weekend breaks and high occupancy levels in an already established market are attractive from an investment perspective. The year round sunshine, amazing culture, fantastic nightlife, golf, Atlas Mountains and beautiful gardens also make the lifestyle opportunity to good to miss. With arrivals currently increasing 9% per annum it is easy to see why the riad market is booming. The Moroccan government expects to receive over 3 million international visitors to Marrakech by the end of 2010 – over 30% of the total number of visitors to Morocco.
Riads are urban houses situated in the Marrakech medina (old city). With traditional Moroccan architecture and furnishings, combined with beautiful private courtyards and terraces a riad offers the combination of urban living and a peaceful, engaging environment away from the hustle and bustle of the city. Moroccan artisans are often employed to hand make intricate mosaics (zellige), woodcarvings and ironmongery that combine to make riad interiors truly unique and special places.
Morocco means Marrakech and Marrakech means Riads. Due to the captivating style and appeal of these properties, occupancy rates in guesthouses can reach as high as 90% per annum and with some of the best charging over €500 per night, the renovation and rental of riad property is now an extremely attractive investment opportunity. Once a riad guesthouse has an established client base, the property and business can be sold for many times their original value.
One of the most important things to remember when buying a riad is to ensure that the title is clearly recognised. Morocco modernised its land registry in 2000 and many riad owners have not yet had the original title documents (called “Melkia”) updated. These old documents are not recognised by the new system so make sure you use a reputable international estate agent like Elite Morocco. To have the old title updated can take a long time (few months to a year) so if you want to move quickly make sure that the riad you are buying has a modern title. However, if you are prepared to wait, then a local Notary will charge a small fee to do the necessary work.
If you are considering buying a riad in Marrakech, here are some useful tips:
1. We have over 100 riads on our books in Marrakech and are the market leader. 2. Moroccan finance is NOT available for riads. This is a cash market only. 3. Owners always expect some undeclared monies to be involved in a transaction for tax reasons (i.e. the final title will declare a lower price than agreed with the balance paid directly to the owner). This is usually unavoidable and often about 30%. 4. A way to calculate a riad's approximate overall size is to take the ground floor / footprint area, less the size of the patio, multiply by 3 then re-add the patio size. This will give you the total living area including the roof terrace on the 2nd floor. For example: · Ground floor/footprint = 200m2 · Internal patio = 50m2 · First floor = 150m2 · Roof terrace = 150m2 · Total internal = 300m2 (ground floor less patio + first floor) · Total living area = 500m2 (including patio and roof terrace) 5. Visit for an extended period (long weekend at least) and be prepared to re-visit. 6. As the Medina is large and confusing, you are best advised to select the area in which you would like to purchase before you visit. Elite Morocco Properties can help you with this. 7. Make sure that you take a camera with you! 8. If you find what you are looking for, 10% will normally be required to completely secure the property. 9. An independent Notary will hold this deposit in a secure client escrow account while the sales particulars are substantiated and exchange / completion are organised (called the Compromis De Vente and Acte De Vente). 10. Elite Morocco Properties can recommend a good local notary. 11. Fees to be expected during the buying process amount to approx. 7% and include: a. Notary – 1% b. Stamp duty – 2.5% c. Miscellaneous – 1% d. Agent fees – 2.5% (5% shared 50/50 by the buyer and seller) 12. The final price will be in Moroccan Dirhams. As the sale may have been agreed in Euros for simplicity (common) you may need to agree the exchange rate before completion. 13. Exchange and completion can be arranged and concluded at the same time in Marrakech in the presence of the buyer, seller and the notary. All monies need to be available in the Notary's account in advance of this meeting along with all costs. 14. If you are restoring a very old riad you can assume the costs will be around the same price as you pay for the property (to cover a comprehensive rebuild and refit of property / utilities). Alternatively, for a younger property, assume €500 - €750 per m2 for a high quality renovation. Elite Morocco Properties can help you with this.