Buying property in Spain...

[Unbelievable Jeff]

So currently we are out in Calpe in the Costa Blanca, which is a lovely part of Spain. However, we are seeing a lot of 'For Sale' (se vendo) signs around and it transpires that property is pretty darn cheap over here.

 

I was wondering if any of the ex pats or owners of property in Spain have any tips, and know what it's like get a mortgage properties over here. For us, due to our age, it will be a long term investment for holidays and for a bit of rental in time it's not being used. Is there anything we should avoid?

 

Ta,

 

Jeff

[Tokyo-Saint]

Read this before and thought it was pretty interesting.

 

http://uk.finance.yahoo.com/news/buying-holiday-home-huge-waste-082409006.html

[Unbelievable Jeff]

That is certainly interesting and it is something I'll look at. Cheers Tokes, you ain't just here for the jokes.

[Tokyo-Saint]

Bear corrupts me. I'm actually a serious poster here to weasel people into bans.

[oracle saint]

I owned a fairly smart garden flat in the south of France for 7 years. I only went there about twice a year and didn't bother to let it out (though tried to initially). The first 2 or three years were quite fun; a great area to explore and good inviting friends down. However the last two years I went down a total of 5 times; I realised it wasn't really a holiday any more after spending the whole of a visit redecorating and fixing some damp. It cost me about £8000 p.a. to run it and pay the various taxes. I also note that the French government has imposed a wealth tax on foreign property owners - an easy target for cash-strapped governments.

 

The main problem though was that you have to keep on going back to the same spot; OK if you're not particularly adventurous but not too great if you want to explore other parts of the world. Given the amount of money the place cost to maintain it would have been less expensive to rent a property in different parts of the world for a few weeks a year.

 

The other problem with Spain is the amount of property available that has been specifically built to cater for the Brits'. property-owning obsession. Don't expect prices to rise and if it's in a holiday complex you've also got the potential problem of the operator going bust - many of them do. However that does also make it cheap to rent. My advice, for what it's worth, is to rent a place for your holidays and let someone else maintain it.

 

I'm not really trying to deter you from buying - just pointing out some potential pitfalls. Ultimately also I did make money when I sold about 3 years ago (due entirely to currency movements) so it is possible to escape with your shirt. I do know a few people though who have lost significant money though!

 

Good luck

[CB Saint]

This.

 

come close a couple of times with a ski chalet, but realised that there's far more places to ski in the world.

[Unbelievable Jeff]

I owned a fairly smart garden flat in the south of France for 7 years. I only went there about twice a year and didn't bother to let it out (though tried to initially). The first 2 or three years were quite fun; a great area to explore and good inviting friends down. However the last two years I went down a total of 5 times; I realised it wasn't really a holiday any more after spending the whole of a visit redecorating and fixing some damp. It cost me about £8000 p.a. to run it and pay the various taxes. I also note that the French government has imposed a wealth tax on foreign property owners - an easy target for cash-strapped governments.

 

The main problem though was that you have to keep on going back to the same spot; OK if you're not particularly adventurous but not too great if you want to explore other parts of the world. Given the amount of money the place cost to maintain it would have been less expensive to rent a property in different parts of the world for a few weeks a year.

 

The other problem with Spain is the amount of property available that has been specifically built to cater for the Brits'. property-owning obsession. Don't expect prices to rise and if it's in a holiday complex you've also got the potential problem of the operator going bust - many of them do. However that does also make it cheap to rent. My advice, for what it's worth, is to rent a place for your holidays and let someone else maintain it.

 

I'm not really trying to deter you from buying - just pointing out some potential pitfalls. Ultimately also I did make money when I sold about 3 years ago (due entirely to currency movements) so it is possible to escape with your shirt. I do know a few people though who have lost significant money though!

 

Good luck

 

Thanks for the in-depth post, it's very useful to hear from someone with direct experience.

[Tokyo-Saint]

For 8k per year to maintain somewhere, you may as well hire someone else's villa on 8 different occasions throughout the year. Or as suggested, even better, go to different places.

[buctootim]

For 8k per year to maintain somewhere, you may as well hire someone else's villa on 8 different occasions throughout the year. Or as suggested, even better, go to different places.

 

Thats the calculation I made. You can have some fabulous holidays anywhere you like for £8,000pa.

 

My ex bought a place in Spain with her financial adviser partner four years ago with a £ denominated mortgage on his expert advice. The hassles, decline in value, increase in mortgage and the fact our kids hate it and don't want to go there has been a wonderful source of schadenfreude.

[Whitey Grandad]

My sister has a flat on the Algarve. It's just about doubled in value and she goes there several times a year. She's happy with it but it's not for me.

[John Boy Saint]

Bricks and Mortar abroad always have an appeal until the operating costs that everyone I know, who has taken the plunge, talks about!!.

Being brought up on camping holidays as a nipper I seemed to have continued the family trait, to the point where our Spanish Villa has 2 wheels and is kept in storage on the Med coast near where Saints played pre season this summer in Palafrugell

We bought a little Caravan here for £750 did a fair amount of work on it ourselves then drove it south. It costs us €200 a year for storage, that includes a wash, towing to the campsite of our choice, and collection at the end of the holiday and returned into storage, the climate is such down there that we should get many years out of it and right now, due to the use we have had, it really doesnt owe us anything. This year our Campsite fee for 3 weeks in July came to just over £600, we can fly from Bournemouth to Girona an hour away, but prefer to drive which is 3 tanks of diesel total. We know that we can go and stay from March until October if we wish, but when we leave after our holidays we know that we can go anywhere we want in the world without feeling obliged to return to our "Villa".

If you have no desire to go Camping what we do would probably leave you cold, all I can say is we have a great time and most evenings normally involves spontaneous evenings drinking and chatting with the neighbours from all over Europe.

[Whitey Grandad]

It's a great area JBS, we know it well. May I ask which site you use?

[John Boy Saint]

Kim's in Llafranc. Don't you go towards Pals?

[Dimond Geezer]

I forwarded your question to a mate of mine who inherited a flat near Torremolinos, his advice was 'Learn the lingo'.

 

The locals don't take kindly to Brits who insist on speaking English & will make little, or no effort to help out (and why should they?). It's taken him 4 years from scratch, but he's just done his A-level in Spanish, but he reckon it's saved him a small fortune, in translation fees alone, he's a lot more confident when dealing with the Authorities, tradesmen etc and they know they can't take advantage of him by exploiting the language barrier.

[Whitey Grandad]

Yes, a bit further north. We've tried most of them over the years, Cala Gogo, Playa Brava, Mas Patoxas, Cypsela, Aquarius in Spain and Le Soleil at Argeles in France. It's a great area but we've only ever been there in July (once in June). I once had a job to do in Perpignan in November so I drove back to Barcelona along the coast. It was shut and tumbleweed was blowing in the streets.

 

I wouldn't mind an apartment near Aiguablava though

 

Edit: I've just had a look at Kim's website. I'm nostalgic already.

Edited 25 September, 2013 by Whitey Grandad

[scotty]

My inlaws had a place in Torrevieja for 15 years. It was in a residencial block of flats as opposed to a specific holiday or expat place, and we got a lot of value from it. Most of the (large, Italian) family went there at least once a year, so it was occupied for longer than it was empty. Maintenance costs were low because it wasnt a tourist place, I think it cost a maximum of £1k a year to maintain including electricity. They bought it for £18k in about 1988, and sold it in 2002 for £55k. If I'd had the money I would have bought it from them.

 

The thing about seeing different places is entirely valid of course, but I loved going there. You're on holiday the moment you land; there's the hire car office, leave the airport knowing the route like the back of your hand, drop off at the supermarket for the essentials, drop your stuff in the flat that you havent spent half the day finding or settling in to, out for a drink in a bar you already know then dinner in a restaurant you know is good. There is a lot to be said for returning to a place you like, and hopefully you can afford another exploring-type holiday in the same year. If not, at least you've had a few weeks well chilled out. Calpe is really nice, go for it.

Edited 25 September, 2013 by scotty

[buctootim]

Stayed here this summer. Good place, handy for Roses.

http://www.ballena-alegre.com/en/

[John Boy Saint]

Yes, a bit further north. We've tried most of them over the years, Cala Gogo, Playa Brava, Mas Patoxas, Cypsela, Aquarius in Spain and Le Soleil at Argeles in France. It's a great area but we've only ever been there in July (once in June). I once had a job to do in Perpignan in November so I drove back to Barcelona along the coast. It was shut and tumbleweed was blowing in the streets.

 

I wouldn't mind an apartment near Aiguablava though

 

Edit: I've just had a look at Kim's website. I'm nostalgic already.

 

Hmmmmm if you like Russians and the price hikes they bring to the restaurants etc, and the largest offering of Puta's I have seen on the Costa Brava. Plus you really need the money pit that is a boat up there.

 

I could happily live on the hill in Llafranc, but with prices €1m + for the nicer small places my 2 wheeled Villa will suffice.

 

if you have done Mas "Paxo" you must have been down to the Dutch magnet that is Chicken & Chips (or Can Padres) on the roundabout to Pals beach?

 

I had to go to La Bisbal this year with work, pretty weird driving down through a town when you are suited and booted then a month later going thru the same town 680 crow miles from home on your holibobs!!

[Goalie66]

I own a Villa in Cumbre Del Sol not far from Calpe. Had it built off plan 9 years ago.Generates six months of rental income. The web site is http://www.casaxenia.com . First buy rather than build as it is now a lot cheaper. In Spain you have this corrupt system where there is a declared value against actual value. When you sell a property you pay capital gains on the difference betwen the declared value against the actual sale price. The reason for the declared value is tax avoidance. At the moment capital gains is 18%.

 

Look around in the more exclusive areas as in all markets views of the sea still have premiums and will hold their prices. Me too properties will be difficult to shift. Also buy where everything is well established and no liklihood of further development that could lower your value. PM if you want more details. Will be at my Villa next week!!

[Whitey Grandad]

Hmmmmm if you like Russians and the price hikes they bring to the restaurants etc, and the largest offering of Puta's I have seen on the Costa Brava. Plus you really need the money pit that is a boat up there.

 

I could happily live on the hill in Llafranc, but with prices €1m + for the nicer small places my 2 wheeled Villa will suffice.

 

if you have done Mas "Paxo" you must have been down to the Dutch magnet that is Chicken & Chips (or Can Padres) on the roundabout to Pals beach?

 

I had to go to La Bisbal this year with work, pretty weird driving down through a town when you are suited and booted then a month later going thru the same town 680 crow miles from home on your holibobs!!

 

Done almost all the restaurants around Pals including Can Padres 1 & 2. The best chicken was at Camping Cypsela but Mas Patoxas has a very good restaurant itself. There's good fish in the small restaurant next to the beach car park next to Playa Brava. The best sardines I ever had were at Aiguablava. We also enjoy the meals at Sant Martí d'Empúries mainly for the atmosphere.

 

I've heard stories about Russians turning up at restaurants with bags of Euros and telling the owners that like it or not they were buying the place.

 

What's the place like out of season?

[John Boy Saint]

Sublime, Llafranc always attracts the rich Barcelonans year round so is very civilised, the last 2 years we have been there at the beginning of July and even that is is very civilised we have been on the small beach there with plenty of space to spread out.

We know folks who have been going for over 30 years, it is definitely not "kiss me quick" as you know, just very relaxed. Blimey just realised my first trip there was in 1988 so despite a few years away I am not far off that clubs membership!! Without doubt it is a Marmite destination if you want fast living head south if you just want to unwind from a year of hard graft head here.

[tony13579]

I had two mates who had time shares. One in Florida one in Lymington. The Florida on was a pain, hard to swap, hard to visit, expensive to visit. The one in Lymington was east to use, cheap to get to, and easy to swap with exotic locations.

 

Spanish properties are very cheap. they could in theory recover but there are so many properties to sell before the price can rise. There is no liquidity in the market. If you needed to sell you could knock 25% off the price and still not get a buyer. You could rent from another desperate Brit trying to return home very cheaply. I know two from a £250k detached house in Rownhams returned with health problems and now have a £140k mid terrace in lordswood!

 

Personally I would not borrow money to buy a Spanish property. Their government has strange attitudes to ripping off property owners and re-selling the land.