Plots of land – better investment than houses at the moment?

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This topic contains 12 replies, has 7 voices, and was last updated by Profile photo of Chopera Chopera 3 years, 5 months ago.

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  • #57558
    Profile photo of Chopera
    Chopera
    Participant

    OK so we’re aware of the costs of buying and running a property, and how second home owners are sitting ducks for any future taxes (as well as the existing ones).

    However I have been told that there is absolutely no finance available for buying plots of land. Nobody is lending. And I’ve seen prices tumble accordingly.

    So as I have a bit of cash, I’m now thinking of buying a plot and … well, that’s it really. Maybe I’ll build on it in 5, 10, 20 years. Maybe not.

    The downside with plots is that you still have purchase costs and of course they don’t generate income. And of course planning laws can change, turning your fully urbanizable gold mine into a rather expensive vegetable patch. But I’m thinking it might be a better bet than supposedly cheap houses at the moment. Any future upturn in the property market should be reflected in land prices.

    Thoughts anyone?

  • #117325
    Profile photo of The Australian
    The Australian
    Participant

    I am interested, but have not seen cheap prices in the Canaries (which is where I’d like to move…not second home, moving totally for me!).

  • #117327
    Profile photo of Anonymous
    Anonymous
    Participant

    I’ve been thinking about this for a while now. The land market is dead, completely dead. Land prices have collapsed more than house prices is my impression. Land speculation was at the heart of the boom, and many speculators were left holding wildly inflated land banks bought with borrowed money. I guess it’s all gone to the banks now. I know someone in the business in Portugal who says you can buy prime plots for a song, and he reports that some investors are doing it. But I’m not aware of anyone doing it in Spain, most of the investors I know are looking for rental yields, but I think it’s something to keep a close eye on.

  • #117330
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    Isn’t the sticking point getting the necessary permission to build on that land?

  • #117332
    Profile photo of Anonymous
    Anonymous
    Participant

    All the issues that posted are valid. The VAT on the plots of land is much higher. The money spent on a plot is dead money i.e. it has no returns either in cash or in kind.

    The planning regulations and not one authority having a final word plus during the construction phase the problem of theft & vandalism is to be considered,

  • #117333
    Profile photo of Anonymous
    Anonymous
    Participant

    @shakeel wrote:

    All the issues that posted are valid. The VAT on the plots of land is much higher. The money spent on a plot is dead money i.e. it has no returns either in cash or in kind.

    Not necessarily. You could use it as an allotment and grow tomatoes for a few years 😛

  • #117335
    Profile photo of Anonymous
    Anonymous
    Participant

    @mgspain: Pehaps you could explain how I am on the side line ???

  • #117336
    Profile photo of Anonymous
    Anonymous
    Participant

    @mgspain. In that sense yes I am on the side lines. I would love to buy land & build a lovely Moroccan style house in the South of Spain.

    I do not do it for the reasons mentioned above. I can live with the higher VAT, further a lot of land is inherited and there are few legal owners who have rights to that land. As their interest’ had not been noted on the titles etc. There are family disputes (in some case many family members involved. All about being good catholics) the additional legal cost,time taken and not being being blessed with patience. I have not taken this route,

  • #117337
    Profile photo of katy
    katy
    Spectator

    Problem with buying land in Spain is that you need someone to keep any eye on it. A German couple owned some land close to us, they hadn’t visited for years and were just sitting on it. One day they found out a house was being built on it…imagine the time and cost sorting that out. Our golf course was in dispute with a Spanish developer for years after he stole a bit of their land. The fact that you are a foreigner doesn’t help either. Fenced off plots get broken down over time and the fly tipping starts, the Ayuntamiento will bill you to clear it. There is also the possibility the land may be unsuitable to build on which is what happened to a friend when he got a project together, now worthless.

    Beware of the cold calling companies in Spain selling parcels of land. Some have been closed down and the sellers in prison but there are still many around.

    If I were to invest there it would be in locales. I know a Spanish man who bought some 20 years ago when he was paid a redundancy sum. He is now quite rich. Even in a recession there is always some daft punter coming along to open a shop 😆 Every time the lease changes hands the owner gets a cut which can be substantial.

  • #117357
    Profile photo of Anonymous
    Anonymous
    Participant

    I know of a German lady who had a prime plot of land in Marbella stolen from her by a dodgy developer and a bent notary. They transfered the title to the developer then started building on it – might be the same case. It didn’t help that she owned it through a Gibraltarian company.

    Talking of land scams, a new member of the forum has just come forward as a victim of the Lake Argos Murcia scam

  • #117359
    Profile photo of The Australian
    The Australian
    Participant

    @mark wrote:

    I know someone in the business in Portugal who says you can buy prime plots for a song, and he reports that some investors are doing it.

    Spain…Portugal…all the same to me, just give us some more info please 🙂

  • #117385
    Profile photo of angie
    angie
    Spectator

    chopera, I know of a case in question where a huge parcel of land was sold in Casarabonela Andalucia, then sub-divided into very large plots and sold on for 250k euros each with full building permits. A buyer got on with his build and built a lovely cortijo on top of the hill, the rest sat on theirs, shilly shallied for a few years and the planning permission was reversed. I’m not sure of the reason for this but buyers now sit with very expensive pieces of attractive land they can’t build on, meanwhile the man who completed has a fabulous place with no neighbours as was intended. It seems even land is not necessarily a safe bet 🙄

  • #117387
    Profile photo of Chopera
    Chopera
    Participant

    Yes there are always risks, as there are with renting out property. As well as planning reversals the councils can introduce building freezes for whole areas. It is something that needs to be researched thoroughly. In fact I wouldn’t go for a rural or even semi-rural plot – even if it looks fantastic. I was thinking more along the lines of urban areas where there are lots of established houses.

    Katy’s idea of locales is quite interesting – although I wonder where the demand will come from with so much more shopping being done over the internet or in supermarkets these days. In Madrid you see so many locales that have been closed down you’d think they’d be worthless. After all, nearly every block of flats has at least 2 locales and they can’t all become Starbucks surely? (I hope). I’ve wondered about the market for ludotecas, since I imagine it is quite cheap to put a climbing frame and ball pit in a local and charge a bit of money for kids to use them. However I imagine they need to be sound proofed, which might be expensive.

    I have also considered garages, well I still am keeping an eye open, but it’s the same old problem – vendors are asking way too much in relation to the income you can expect.

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