Buy to Let in Spain, madness or not?
Discussion
Grahamdub said:
My in laws have just moved back from Spain. It has taken them well over 12 months to sell their house and then they had to take a huge loss just to get rid of it. From what they were saying, the housing market is pretty dead anyway, but not being helped by all the older ex-pats looking at moving back to the UK with all the Brexit fears over healthcare, pensions etc.
My grandmother moved back a couple of years ago. Her and her partner both sold their houses in the UK before the crash, bought a large ~€500k villa, beautiful place. The arse fell out of the market and all their ex pat neighbours bailed, it was like a ghost town. They came back having lost a couple of hundred thousand € and now live in a small bungalow in the UK.If the agent has 'promised' a 20% return then simply ask them what personal assets they are putting up to underwrite that 'promise'. They will soon stop calling or answering calls. 
It's total cowboy country. f
k all regulation and riddled with utterly dishonest spankers running on comm deals and back handers.
All you'd be doing is bailing out the last mugged punter with huge losses and waiting for the next one to bail you out at a huge loss.
Even without the dishonesty it's a seasonal market with near endless supply. That alone means that you have about a 4 month window to earn a years worth of debt and maintenance coverage but in a market where you have to undercut/discount neighbours to get a client or over spend on 'dressing'.
I've just spent a weak renting a villa up the coast from Barcelona. I paid the UK owner £4K. He has still lost money that week but the place is his wife and children's passion and by renting it out when they aren't there he mitigates a chunk of the enormous cost.
It's total cowboy country. f
k all regulation and riddled with utterly dishonest spankers running on comm deals and back handers. All you'd be doing is bailing out the last mugged punter with huge losses and waiting for the next one to bail you out at a huge loss.
Even without the dishonesty it's a seasonal market with near endless supply. That alone means that you have about a 4 month window to earn a years worth of debt and maintenance coverage but in a market where you have to undercut/discount neighbours to get a client or over spend on 'dressing'.
I've just spent a weak renting a villa up the coast from Barcelona. I paid the UK owner £4K. He has still lost money that week but the place is his wife and children's passion and by renting it out when they aren't there he mitigates a chunk of the enormous cost.
DonkeyApple said:
If the agent has 'promised' a 20% return then simply ask them what personal assets they are putting up to underwrite that 'promise'. They will soon stop calling or answering calls.
It's total cowboy country. fk all regulation and riddled with utterly dishonest spankers running on comm deals and back handers.
All you'd be doing is bailing out the last mugged punter with huge losses and waiting for the next one to bail you out at a huge loss.
Even without the dishonesty it's a seasonal market with near endless supply. That alone means that you have about a 4 month window to earn a years worth of debt and maintenance coverage but in a market where you have to undercut/discount neighbours to get a client or over spend on 'dressing'.
I've just spent a weak renting a villa up the coast from Barcelona. I paid the UK owner £4K. He has still lost money that week but the place is his wife and children's passion and by renting it out when they aren't there he mitigates a chunk of the enormous cost.
You paid £4000 for a week in Spain? It's total cowboy country. f
k all regulation and riddled with utterly dishonest spankers running on comm deals and back handers. All you'd be doing is bailing out the last mugged punter with huge losses and waiting for the next one to bail you out at a huge loss.
Even without the dishonesty it's a seasonal market with near endless supply. That alone means that you have about a 4 month window to earn a years worth of debt and maintenance coverage but in a market where you have to undercut/discount neighbours to get a client or over spend on 'dressing'.
I've just spent a weak renting a villa up the coast from Barcelona. I paid the UK owner £4K. He has still lost money that week but the place is his wife and children's passion and by renting it out when they aren't there he mitigates a chunk of the enormous cost.
Saleen836 said:
You paid £4000 for a week in Spain?
LOL! The dear ones are twice that...a night.https://www.luxuryretreats.com/vacation-rentals/sp...
....and then there's the REALLY dear ones....
https://www.luxuryretreats.com/vacation-rentals/sp...
Edited by drainbrain on Wednesday 13th September 16:40
drainbrain said:
LOL! The dear ones are twice that...a night.
https://www.luxuryretreats.com/vacation-rentals/sp...
....and then there's the REALLY dear ones....
https://www.luxuryretreats.com/vacation-rentals/sp...
The first link is a 5 bed so if you pal up with 4 other couples that week in what looks very very nice pad it's only £1,600 per couple. Plus flights cheap. https://www.luxuryretreats.com/vacation-rentals/sp...
....and then there's the REALLY dear ones....
https://www.luxuryretreats.com/vacation-rentals/sp...
Edited by drainbrain on Wednesday 13th September 16:40
That second one - that's really beyond a low lotto win lifestyle that is for properly wealthy people.
Welshbeef said:
The first link is a 5 bed so if you pal up with 4 other couples that week in what looks very very nice pad it's only £1,600 per couple. Plus flights cheap.
Eh? Get a calculator.In season it's $84000 a week. (plus another $25000 at least for the return 10 seat jet). So roughly 10 times what you said per couple for the week and that's before any spending money. That's a £20k week per couple, tho' it's a lot more likely to be mum, dad, 2 or 3 kids and a nanny having a £100k week.
And if you think the Barcelona one's dear, google "Villa Titanium".
Edited by drainbrain on Wednesday 13th September 23:11
drainbrain said:
Eh? Get a calculator.
In season it's $84000 a week. (plus another $25000 at least for the return 10 seat jet). So roughly 10 times what you said per couple for the week and that's before any spending money. That's a £20k week per couple, tho' it's a lot more likely to be mum, dad, 2 or 3 kids and a nanny having a £100k week.
And if you think the Barcelona one's dear, google "Villa Titanium".
He's a finance director, he did the sums in his head. In season it's $84000 a week. (plus another $25000 at least for the return 10 seat jet). So roughly 10 times what you said per couple for the week and that's before any spending money. That's a £20k week per couple, tho' it's a lot more likely to be mum, dad, 2 or 3 kids and a nanny having a £100k week.
And if you think the Barcelona one's dear, google "Villa Titanium".
Welshbeef said:
Hi sweetheart.
No I glanced at the pics more and simply saw €8k didn't realise his was a nightly cost simply assumed weekly.
Now how's that fantasy Bristol you have
I don't own the Bristol Fighter any more. I have, however, owned 2 in the past so no fantasy.No I glanced at the pics more and simply saw €8k didn't realise his was a nightly cost simply assumed weekly.
Now how's that fantasy Bristol you have
Accusations of fantasy from you are a bit rich, are they not?
desolate said:
Welshbeef said:
Hi sweetheart.
No I glanced at the pics more and simply saw €8k didn't realise his was a nightly cost simply assumed weekly.
Now how's that fantasy Bristol you have
I don't own the Bristol Fighter any more. I have, however, owned 2 in the past so no fantasy.No I glanced at the pics more and simply saw €8k didn't realise his was a nightly cost simply assumed weekly.
Now how's that fantasy Bristol you have
Accusations of fantasy from you are a bit rich, are they not?
cashmax said:
Thanks for all the replies. I pointed the friend in question at this thread so they can see for themselves. The problem is that there is so much propaganda on the web from the involved parties, to the untrained eye, a quick Google tells you it's a good thing.
Why don't they take a 6 month lease and live down there for a while, at the end of that period they will be in a much better position to make an informed decision. everything else is 2nd hand information.Anyway if they intend spending most of their time in the UK, that's where they should buy.
On the subject of apartments (and I realise the OP just said 'property', didn't specify apartment or something else) isn't there a legal issue with private owners renting out their apartments in Spain now? I have vague recollections of news reports in the summer about Mallorca in particular clamping down on it, with talk of tenants being held at the airport and owners being find £36k. Or have I misread something?
droopsnoot said:
On the subject of apartments (and I realise the OP just said 'property', didn't specify apartment or something else) isn't there a legal issue with private owners renting out their apartments in Spain now? I have vague recollections of news reports in the summer about Mallorca in particular clamping down on it, with talk of tenants being held at the airport and owners being find £36k. Or have I misread something?
I don't think this is just restricted to Spain.In many countries you need a specific permission to operate short term rentals. This includes the UK. It's also the same for Portugal.
That's before you get into any mortgage issues.
I've owned a small 3 bed apartment for about 14 years, bought it just as it was being completed. Have a small mortgage on it so the total running costs for local taxes, Mortgage, water and electricity plus community charge runs around €8,000 a year. I would guess that on average, I get back about €8-10,000 a year from rentals so anything from 0 to 20% over running costs.
Right now, I expect the property value to be about 60-75% of what I paid for it. Had I bailed out around 2006 probably would have doubled my money because there was a real hot period.
If you really want to buy a place, 2 good options, 1, buy from someone that wants to bail out and you can get a place at a good price or 2, buy a property from the bank. They will haggle on price and will offer tempting mortgage rates, circa 1% to get stuff off their books.
The bad option it would seem is to buy a new off plan or not quite completed place unless you like a real gamble!
Right now, I expect the property value to be about 60-75% of what I paid for it. Had I bailed out around 2006 probably would have doubled my money because there was a real hot period.
If you really want to buy a place, 2 good options, 1, buy from someone that wants to bail out and you can get a place at a good price or 2, buy a property from the bank. They will haggle on price and will offer tempting mortgage rates, circa 1% to get stuff off their books.
The bad option it would seem is to buy a new off plan or not quite completed place unless you like a real gamble!
rdjohn said:
The exchange rate is not really favourable either. I would be inclined to buy in the UK and rent in Spain - €1000/month can get you are pretty smart long-term rental. Their leases usually allow you to sub-let.
Interesting what you say re the sub-letting, One prohibitive cost I have encountered with renting in Spain are the fees up front for 6 month rents. My plan was to rent in Spain over winter until I am comfortable enough to buy. Typing this from a hotel in Marbella as once again its cheaper for me to be here for winter than a rental - but its not a home...
€800 - €1200 PCM is a happy balance but I do have to pay UK rent/mortgages and looking at deposits etc as well as other up front costs I have spent the last 2 winters focusing on hotel deals rather than homely lets - the latter of which I would far prefer.
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