Buying an Apartment in Lanzarote
Discussion
I’ve recently come back from a holiday in Lanzarote (Puerto Del Carmen) and would be interested in buying a 1 or 2 bedroom apartment there for under £200k with a communal pool.
It would be bought on a mortgage of 40% LTV, and most likely let out as an AirBnb, with the family and I also using it.
What are the things to watch out for when buying there. The returns seem to be really good and I’m just wondering whether it’s all a bit too good to be true.
It would be bought on a mortgage of 40% LTV, and most likely let out as an AirBnb, with the family and I also using it.
What are the things to watch out for when buying there. The returns seem to be really good and I’m just wondering whether it’s all a bit too good to be true.
There's a whole thread on the subject here.....
https://www.pistonheads.com/gassing/topic.asp?h=0&...
https://www.pistonheads.com/gassing/topic.asp?h=0&...
GT03ROB said:
There's a whole thread on the subject here.....
https://www.pistonheads.com/gassing/topic.asp?h=0&...
I have seen this thread. However it’s 60 pages long and after a brief overview, it does go off on a number of tangents. https://www.pistonheads.com/gassing/topic.asp?h=0&...
Rob 131 Sport said:
I’ve recently come back from a holiday in Lanzarote (Puerto Del Carmen) and would be interested in buying a 1 or 2 bedroom apartment there for under £200k with a communal pool.
It would be bought on a mortgage of 40% LTV, and most likely let out as an AirBnb, with the family and I also using it.
What are the things to watch out for when buying there. The returns seem to be really good and I’m just wondering whether it’s all a bit too good to be true.
Why have I got Jasmine Harman's voice in my head reading this It would be bought on a mortgage of 40% LTV, and most likely let out as an AirBnb, with the family and I also using it.
What are the things to watch out for when buying there. The returns seem to be really good and I’m just wondering whether it’s all a bit too good to be true.
I know budgets are budgets but have you looked at villas with private pool? They will be more appealing for holiday rentals.
fourstardan said:
Why have I got Jasmine Harman's voice in my head reading this
I know budgets are budgets but have you looked at villas with private pool? They will be more appealing for holiday rentals.
It's all about the target demographic.I know budgets are budgets but have you looked at villas with private pool? They will be more appealing for holiday rentals.
If I was looking to rent a villa with a private pool in Lanzarote then there is no way I would even being thinking of looking in Puerto Del Carmen
I've thought long and hard about buying somewhere in the alps. Admittedly, that isn't Lanzarote, but I think the same issues/risks will apply. The frustrating answer is that it doesn't make sense. Or at least doesn't make sense in the majority of situations for the majority of people.
Basically, if you have the money, and don't need to rent it out, and you don't mind whether it makes money or not, and you don't mind taking on the risks/hassle of owning a property overseas when you are not present, then go for it.
But as an investment, when you get into the detail, I've found it to be a terrible idea (even though I still want to do it). Much better to invest the savings which you would have otherwise used to buy the property, and just rent the weeks you want.
Basically, if you have the money, and don't need to rent it out, and you don't mind whether it makes money or not, and you don't mind taking on the risks/hassle of owning a property overseas when you are not present, then go for it.
But as an investment, when you get into the detail, I've found it to be a terrible idea (even though I still want to do it). Much better to invest the savings which you would have otherwise used to buy the property, and just rent the weeks you want.
Owned an apartment in Mallorca for over 10 years. Mortgage is easy but the costs in spain are far higher than the UK. They won't account for letting it out so your income needs to cover affordability.
To airbnb it you'll need a licence, that maybe easy or difficult depending on the local process. Sometimes they restrict them, sometimes they put onerous conditions e.g. epc ratings. Plus you need to capture details of renters and upload to spanish authorities. All doable just cost / hassle. You could risk not bothering but if you get found out or get complaints about a noisy renter the fines can be eye watering.
You'll need a gestor / accountant for a tax return. You can't offset many costs so you are paying tax in spain on turnover not profit.
Community will have a say in holiday lets, they may vote against it in the future.
Everytime you go, you'll spend days fixing things, organising for things to be fixed and generally dealing with problems.
Its an island, everything is shipped in so, furniture, bathrooms, tiles, fridges etc all cost a lot more than on the mainland.
I would only buy if you can spend a lot of time there. If you work full-time you'll resent the costs when you only go 3 or 4 times a year. Then you'll resent going back to the same place or you'll resent paying to go somewhere else when yours is empty!
Think long and hard about what you want to achieve is my advice!
To airbnb it you'll need a licence, that maybe easy or difficult depending on the local process. Sometimes they restrict them, sometimes they put onerous conditions e.g. epc ratings. Plus you need to capture details of renters and upload to spanish authorities. All doable just cost / hassle. You could risk not bothering but if you get found out or get complaints about a noisy renter the fines can be eye watering.
You'll need a gestor / accountant for a tax return. You can't offset many costs so you are paying tax in spain on turnover not profit.
Community will have a say in holiday lets, they may vote against it in the future.
Everytime you go, you'll spend days fixing things, organising for things to be fixed and generally dealing with problems.
Its an island, everything is shipped in so, furniture, bathrooms, tiles, fridges etc all cost a lot more than on the mainland.
I would only buy if you can spend a lot of time there. If you work full-time you'll resent the costs when you only go 3 or 4 times a year. Then you'll resent going back to the same place or you'll resent paying to go somewhere else when yours is empty!
Think long and hard about what you want to achieve is my advice!
EddieSteadyGo said:
I've thought long and hard about buying somewhere in the alps. Admittedly, that isn't Lanzarote, but I think the same issues/risks will apply. The frustrating answer is that it doesn't make sense. Or at least doesn't make sense in the majority of situations for the majority of people.
Basically, if you have the money, and don't need to rent it out, and you don't mind whether it makes money or not, and you don't mind taking on the risks/hassle of owning a property overseas when you are not present, then go for it.
But as an investment, when you get into the detail, I've found it to be a terrible idea (even though I still want to do it). Much better to invest the savings which you would have otherwise used to buy the property, and just rent the weeks you want.
There is a lot of truth in this. People will put forward a lot of arguments to justify it in their own minds but ulltimately for most they don't make much sense from a financial perspective. Most people won't get the personal use to justify it. You can't practically just hop down for the weekend the flight schedules don't support it. That leaves you your 4 or 5 weeks annual leave. Basically, if you have the money, and don't need to rent it out, and you don't mind whether it makes money or not, and you don't mind taking on the risks/hassle of owning a property overseas when you are not present, then go for it.
But as an investment, when you get into the detail, I've found it to be a terrible idea (even though I still want to do it). Much better to invest the savings which you would have otherwise used to buy the property, and just rent the weeks you want.
One of the benefits of your own place is precisely that, it's your own place. You leave your stuff there, clothes, bikes, electronics, other sports gear. You put decent stuff in. If you rent it out thats not possible & frankly you are just like another rental guest. So why not just rent rather than tying up capital.
We do have a place in Spain. Renting is not worth it for the loss of flexibility. I get 13 weeks off a year so can make use of it. I'm just back from 2 weeks there. Left my wife there, with the dogs & car. I'll fly back in 4 or 5 weeks pick them all up & drive back to the Uk.. She'll pretty much use up her full 90 in 180 day allowence there. So it makes some sense but not financially..
Several posters here are basing their comments on generalisms and possibly bad personal experience either as a result of poor choices or just bad luck.
My reason for properties away from my main home is that even though it is just a rental in effect, it's a rental that I have some control over.
I don't have to wonder - will it be clean, will the shower work etc - that alone makes it worthwhile.
I also get a lot of pleasure is getting positive feedback from those I rent to.
My reason for properties away from my main home is that even though it is just a rental in effect, it's a rental that I have some control over.
I don't have to wonder - will it be clean, will the shower work etc - that alone makes it worthwhile.
I also get a lot of pleasure is getting positive feedback from those I rent to.
Because of the obnoxious gits that turn up via AirBnB, our community has placed a maximum 20% surcharge on the community charge to those residents who rent out commercially.
It still probably does not cover the cost of damage done to poolside equipment, dog ends in the pool, foul language by the pool, or damage to the communal decoration from their constant scraping of suitcases.
You will probably not be popular with your neighbours when you take your holiday.
It still probably does not cover the cost of damage done to poolside equipment, dog ends in the pool, foul language by the pool, or damage to the communal decoration from their constant scraping of suitcases.
You will probably not be popular with your neighbours when you take your holiday.
Assuming you live in the UK don’t forget the 90/180 rule for starters.
You will have to have someone reliable there for changeover and cleaning and access who you will have to pay.
You will pay tax on your income
Other expenses. Community fees, council tax. Plus utilities
How many weeks a year will it rent…in reality. I know canaries has pretty good weather eve in winter.. but
You don’t hv to use it yourself..I mean do you really want to? Plenty of other places to visit. Not knocking lanzarotte at all, I’ve been several times but I’ve been to many other destinations too.
Yeah in a good year you might make a bit…maybe but is it worth all the hassle for a few grand?
FYI .. I had two foreign properties. One in Sofia (Bulgaria capital) only bought as investment and easily rented to a long term tenant because of its good position. Eventually sold for healthy profit.
Other Portugal. A large working but historical town. Again rented out long term. Same tenant for ten years! Make money on rent? A little but I had a small mortgage on it and because I was a dammed foreigner tax people didn’t take that “expense” into account and taxed me on full rent receipt.
Bulgaria was a investment gamble that paid off well.
Portugal was an investment for a possible future…Brexit arrived. I moved here in 2019.
You will have to have someone reliable there for changeover and cleaning and access who you will have to pay.
You will pay tax on your income
Other expenses. Community fees, council tax. Plus utilities
How many weeks a year will it rent…in reality. I know canaries has pretty good weather eve in winter.. but
You don’t hv to use it yourself..I mean do you really want to? Plenty of other places to visit. Not knocking lanzarotte at all, I’ve been several times but I’ve been to many other destinations too.
Yeah in a good year you might make a bit…maybe but is it worth all the hassle for a few grand?
FYI .. I had two foreign properties. One in Sofia (Bulgaria capital) only bought as investment and easily rented to a long term tenant because of its good position. Eventually sold for healthy profit.
Other Portugal. A large working but historical town. Again rented out long term. Same tenant for ten years! Make money on rent? A little but I had a small mortgage on it and because I was a dammed foreigner tax people didn’t take that “expense” into account and taxed me on full rent receipt.
Bulgaria was a investment gamble that paid off well.
Portugal was an investment for a possible future…Brexit arrived. I moved here in 2019.
Many thanks to all the people who have contributed and it’s certainly given me much to consider.
This isn’t the first time I’ve looked seriously at the overseas property market. In 2009 I looked at buying 2 apartments in Lanzarote that were bank repossessions at £90k each. In the end I bought a house as a BTL in the UK as an alternative.
I also looked at buying a villa in Abu Dhabi the same year as an alternative to paying rent. I didn’t proceed in the end as I didn’t want to live there for 10 years.
This isn’t the first time I’ve looked seriously at the overseas property market. In 2009 I looked at buying 2 apartments in Lanzarote that were bank repossessions at £90k each. In the end I bought a house as a BTL in the UK as an alternative.
I also looked at buying a villa in Abu Dhabi the same year as an alternative to paying rent. I didn’t proceed in the end as I didn’t want to live there for 10 years.
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