How to Judge a bargain?

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This topic contains 5 replies, has 4 voices, and was last updated by Profile photo of Anonymous Anonymous 6 years, 6 months ago.

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  • #55641
    Profile photo of katy
    katy
    Spectator

    All the sweeping reduction figures are ok. but quite meaningless. I noticed this one
    http://www.ladehesaproperties.com/index.php?q=details_en&id=63185&rn=1037

    has been on sale for (possibly) 3 years. Not my type but it is a nice property. (have been inside it). Stunning sea views and fairly close to everything. Plot is a bit steep. I noticed this has been reduced by about half a million euro. I really wouldn’t say it is a bargain though…..maybe about 995,000 it would be. What do the experts think?

  • #98760
    Profile photo of Anonymous
    Anonymous
    Participant

    Wow, that seems very expensive for what it offers. That said, I’m no expert, but it doesn’t look like my idea of nearly 2 million euros worth.

  • #98867
    Profile photo of Anonymous
    Anonymous
    Participant

    Let’s see what we’re talking about.

    Can’t link to an image at the website because they don’t seem to work, so here’s a screenshot:

    It doesn’t look particularly expensive for what it is (a Spanish Southfork!), but if it’s not selling at that price, then it’s not worth that price today.

  • #98870
    Profile photo of katy
    katy
    Spectator

    Yes, that is the point I was trying to make, reduced by half a million euro, sounds good but means nothing.

    Think I posted on here before about one being discussed. Hills of marbella, was 1.2 million for around 500,000. I was so fed up of all the guys at the golf club (including my Husband) harping on about it that I arranged a viewing….result, I would have said it was worth 400,000, needed total renovation, possibly even demolition!

    Thanks for putting the webpage on Mark. BTW Alicia who is showing this property is known personally to me…absolutely straight on. Well as straight as an agent can be 😆

  • #98984
    Profile photo of Anonymous
    Anonymous
    Participant

    @katy wrote:

    All the sweeping reduction figures are ok. but quite meaningless. I noticed this one
    ?

    Sorry, but coming back to the topic,

    how can a potential buyer identify a real bargain ?

    I ask this because i even saw the same property on different websites at different prices – is the cheapest one – 10 % a real bargain ?????

  • #98985
    Profile photo of Anonymous
    Anonymous
    Participant

    Objective criteria:

    1. Relative to market comparables
    If comparable properties are on the market for 2 million, and you find one for 1 million, then it’s a good sign it’s a bargain, relative to the market at least.

    The problem is, if the market is over-priced, then it might not be a bargain, just less over-priced than the rest.

    2. Rental yields
    When it comes to second homes, this is probably the best yard-stick for judging how well a property is valued. What kind of rental yield does it give you? What kind of a hurdle rate do we consider a bargain? 5% gross rental yield? 10%? Personally I think at 10% you are getting a bargain. Show me another asset class today that is yielding 10% gross?

    Subjective criteria
    If you love it, can afford it, and think you are getting a good price, then it’s a bargain for you, whatever anyone else says.

    Mark

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