A place in the sun

by Readers Question

15:47 PM, 14th May 2015
About 4 years ago

A place in the sun

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A place in the sun

Do any members have advice on buying a property abroad? A place in the sun

I’m interested in Spain – finding a property to let as a holiday home.

Anticipated returns, management options, dealing with banks/buying process etc.

Any advice would be great.

Thanks

Rob



Comments

Mark Alexander

15:51 PM, 14th May 2015
About 4 years ago

Hi Rob

Unless you want to become shark bait, my advice is don't do it.

Stick to good old Blighty where you understand the language and at least have a reasonable chance of comprehending the law.

I purchased an overseas property and rue the day I did so. When I'm told the pool pump is broken and is going to cost a lot of money to replace what can I do about it? Do I fly over there to check and make sure it really is broken?

If you want nice holidays then I'd advise you to rent off some other mug. That way, you can also go where you want when you want. If you want a decent investment property then see our home page >>> http://www.property118.com/
.

Barbara Gwyer

9:39 AM, 15th May 2015
About 4 years ago

I too rue the day I bought in Cyprus. As well as all the issues Mark mentioned, it takes hours to manage holiday bookings. Factor in fees to the holiday rental portals, electric which can run to €100/ week when guests are running the air conditioning, cleaning costs between guests (which are much higher than London), pool maintenance, other utility costs, service charges, local taxes, mortgage payments etc - doesn't leave anything left over even if you are lucky enough to rent it out for most of the year. I could rent the best villa in Cyprus for my holidays cheaper than my modest villa is costing me

Laura Delow

9:41 AM, 15th May 2015
About 4 years ago

Reply to the comment left by "Mark Alexander" at "14/05/2015 - 15:51":

I don't disagree with Mark as I have heard some similar stories but as a homeowner in Spain for the last 9 years with numerous friends who have owned a place there too for even longer, it's not as fraught with problems if you surround yourself with the right people eg if on a development, it is important to find one with an on site managing agent (manages the block(s) & grounds etc) and if in a development or an individual villa, also get friendly with other British expats on the site/neighbours, especially those who carry out handyman work for other Brits, as they know everyone & everything & can't afford to let you down due to their reliance on the income they earn from Brits owning holiday homes, plus they love showing off their knowledge of where best to buy something or the best utility provider etc. It is also vital to have a good lawyer act for you in the purchase & who doesn't charge the earth. We wouldn't swap our Solc for anything. Also a good site to visit is http://www.spainbuyingguide.com In finishing off I must tell you we wouldn't ever sell our place as it's our sanctury & costs us very little to run/maintain. Oh....don't allow friends to use your place in your absence, however good a friend they are. Make it a Golden Rule. You'll get let down or find yourself disappointed by something they've done or not done, even by the most reliable of them. If you're going to let people stay there, only do it for rent & have a local Brit look after it pre/post each letting. We don't let ours out as it is afterall our 2nd "home". Good luck. Laura

Adrian Matthews

10:55 AM, 15th May 2015
About 4 years ago

Unfortunately, most of us have to let out our foreign property, its a lot of money tied up with no return. I've been renting out my Algarve property for 10 years and had very little issue with guests...even family and friends. However, finding a good management company is a nightmare and as Mark has said, being so far away and not able to check on anything....is frustrating at best. I have found that the rental money covers the expenses but little else and that it's only good for capital appreciation. So it's like any other property purchase...buy wisely and at a bargain price.

Annie Landlord

11:45 AM, 15th May 2015
About 4 years ago

I looked at Spain but decided the market was so depressed it would take forever to make any capital return, so I bought in Florida. Its essentially for family holidays but would easily rent out for holiday or long term lets. You have to check the local arrangements as some areas are zoned for holiday lets and some aren't. I have bought in a small town, not the Disney-circus-area and the potential capital return is already looking great. The neighbours are lovely and look after the place when we're not there.
I'm in agreement with other posters that finding a decent management and repairs arrangement can be a real downside, but we have been really lucky in having neighbours (one of whom does all our repairs) who are great.

Alan Loughlin

17:56 PM, 15th May 2015
About 4 years ago

also do you realize it is actually illegal to rent short term in Spain, this law only came in last year, lots of brits ignore it, but they will do so at their peril.

Bill Williams

9:46 AM, 16th May 2015
About 4 years ago

Reply to the comment left by "Barbara " at "15/05/2015 - 09:39":

On top of which the holiday makers or tenants will wreck your property, both my Cyprus properties cost about 10,000 each to put right after damage and missing inventory. The agents do not care so long as they get the commission.

Shakeel Ahmad

10:45 AM, 16th May 2015
About 4 years ago

Hi Rob,
I concur with most that is said.

If you intend to use it as a retirement home than it is fine in so far as buying or not buying.

As an investment there is no place better than within the M25. Let me list the issues,

a) Illegal built.
b) 10-12% buying cost.
c) Council tax & other taxes. You have to pay extra taxes on the basis the you are renting the property even if you are not.
d) Hig service charges & in most cases the president is in cahoot with the managing agents.
e) Courts to do work
f) Corrupt judges & lawyers.
e) Unhelpful Council waiting for you to slip so that they can penalise you.
f) Lack of work ethics from all & sundry.
g) No sense of urgency/responsibility. Work will get done when it will get than.
h) Dishonest agents. They will rent your property & pocket the money.
i ) Rip of telephone, water ,electricity supplier.
j) Cost of rental will normally be not allowed to offset.
h) Poor quality construction.
j) ten year warranty on new built is not worth the paper.
k) If you have a house expect this to be broken every time you visit. TV, fridge, freezer etc gone.

One final Spaniard is never wrong & they never make mistakes. '

The above comes to mind without stressing the brain on a Saturday morning and I am some one who loves Spain & has bothered to learn the language.

Rob Clark

12:42 PM, 16th May 2015
About 4 years ago

Thanks for all the feedback folks, this forum really is proving to be an invaluable resource for me. I've read enough of your thoughts now to tell me- I should stick with what I know- 2 up 2 downs in South yorkshire! I can Use the money they generate to go on nice holidays and let someone else worry about the broken pool filter and dodgy AC unit!

Ernesto Jimenez

20:59 PM, 16th May 2015
About 4 years ago

Hi Rob,

My name is Ernesto and I've been a long time reader of this forum but have never written anything. Just got here thanks to the weekly newletter that I happily receive every Saturday.

I run a holiday letting agency in Málaga (From Marbela to Málaga) and based on my experience (I own a HMO in the UK) if you invest for pure yield it would be better to invest in the UK.

However, holiday rentals yields around here are good too, but not as high as an HMO in England, on top of that is more volatile.

If I was living in the UK I would sacrifice some of the yield % in order to have a holiday home here to come 4-6 weeks and rent it the rest of the time. That way you would have your holiday home, all costs paid through holiday rentals and on top of that a NET 2,5-5% yield.

Those are the yields we are achieving for most of our customers and they dont have to raise a finger. Just pay bills and taxes and notify me when are you coming for your holiday to clock the calendar to avoid other bookings.

Alan mentioned about the law regardng holiday lets in Spain. This depends on which region you are based. In Andalusia, stil there's not any law, so it all goes through the LAU (Ley de Arrendamientos Urbanos). That's the standard law for long term rentals and it's aplyed to short lets too, given that there's no other law for lets of less than a month.

There will be a law for sure in the future in Andalusia but it will not be forbidden, most likely thing will be that a license will be needed or to register it.

Also, now is a good time to buy given the low prices and the pound beeing so strong. There are some very cool 2 bed apartments with garag, swimming pool etc for 60-80 k €, that's a lot less in pounds.

I hope this has helped. In conclusion, for yield, better stick to the UK, for lifestyle + some yield + saving on your holiday accomodation buy in Spain.

If you have any questions regarding holiday rentals please feel free to ask and I will try to help or you can get in touch.

By the way, my holiday letting agency is: **deleted by moderator - see http://www.property118.com/house-rules-business-sponsorship/

Cheers!

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