Shared ownership ?

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This topic contains 25 replies, has 10 voices, and was last updated by Profile photo of Anonymous Anonymous 8 years, 3 months ago.

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  • #54240
    Profile photo of Anonymous
    Anonymous
    Participant

    Have often thought about owning a nice villa in Spain. Problem is that I can’t possibly use it for more than 2 months each year, and that’s stretching it. I would like to own the property but do not necessarily wish to be too bothered with doing all the paperwork locally such as paying local rubbish collection taxes etc. nor do I need to spend a lot of time getting/finding cleaners and everything else that comes with ownership at a distance.

    Now I could just rent the same place every time I go. Or stay in a hotel. But to me that is money I will never see again.

    Now apparently there are difficulties in getting good mortgages at sensible costs on many properties – not sure about this though – must do my homework.

    But I have enough spare money to invest in a small property but actually would prefer a larger one so that my family and friends can stay without feeling cramped. And I read that this is the time to find a BARGAIN. In my eyes this is the time to INVEST.

    So how about sharing the property with A.N.Other ?

    What are the possible pitfalls ?

  • #85703
    Profile photo of Anonymous
    Anonymous
    Participant

    You are too lazy. Want a property without the responsibility that comes with it. You are not clear in your mind and swinging from one end of the spectrum to another. Stay in a Hotel.

  • #85704
    Profile photo of mike
    mike
    Participant

    @costa_light wrote:

    But I have enough spare money to invest in a small property but actually would prefer a larger one so that my family and friends can stay without feeling cramped. And I read that this is the time to find a BARGAIN. In my eyes this is the time to INVEST.

    So how about sharing the property with A.N.Other ?

    What are the possible pitfalls ?

    Well, what makes you feel that now is a time to invest? Do you think prices will be higher come next spring, for example? I think there will be far more distressed sellers in the future and some real bargains.

    I rented a 2 bedroom apartment in a town inland from the costa de la luz at €240 a month, a few years ago so let’s be generous and say that the rent had increased to €260 a month. For that apartment to make sense for an investor the house would have to give a return of 10% given that I can get 6% in a bank, I should expect some voids, and a little bit for the additional risk that I am taking.

    To get a 10% return, that apartment should generate 260*12 = €3,120 income per annum making that apartment worth €31,120 to me as an investor. That’s not a bargain, that’s a reasonable price for a 10% return. To me it would be a bargain if it went down in price to €25,000.

    I know that you are after a bigger, more luxurious property but while apartments like I describe are so expensive I believe that the more expensive properties will be equally over-priced.

  • #85705
    Profile photo of Anonymous
    Anonymous
    Participant

    shakeel – i think you missed the point of my post. 😕 I would love to own a property outright if I had the money which was large enough to be able to have a number of people staying at one time, but which was truly affordable. hence the question about SHARED OWNERSHIP. I really don’t think staying in a hotel will provide an Investment for me or indeed a comfortable holiday residence. Anyway I have explained already that I want to Invest money in bricks and mortar. And I am very busy (not lazy) at other times when I am not enjoying sunshine in sunny Spain.

    mike – i agree about the timing. Of course to purchase property anywhere needs good judgement about value, but methinks even today there are people who may wish to sell at a reduced value ? And of course the mathematics you quote concerning a return on the investment is quite valid but I would not consider myself to be a ‘buy to let’ type investor looking at the returns. More of an investor who wants to use a holiday villa but who can only afford to buy a small apartment, hence the question about SHARED OWNERSHIP . What I am saying is that people who do not need a mortgage to purchase and who do not have quite enough cash to be able to afford their ideal holiday home may find SHARED OWNERSHIP workable.
    I just wonder if anyone has actually achieved this SHARED OWNERSHIP in Spain ? (And I don’t mean time shares either)

  • #85706
    Profile photo of Anonymous
    Anonymous
    Participant

    I am very busy (not lazy).

    I did not mean lazy in the sense of the word. By you being busy or using your time elsewhere. Makes you lazy in focusing/direction in the purchase of a property.

  • #85707
    Profile photo of Anonymous
    Anonymous
    Participant

    Must be a translation problem shakeel. but please read my words about SHARED OWNERSHIP?

  • #85708
    Profile photo of Anonymous
    Anonymous
    Participant

    http://www.yourkeytospain.co.uk

    30/50% discounts on distressed and discounted sales . They sent me 3 emails today!!

    It’s definitely not a recommendation from me though. 😉

  • #85709
    Profile photo of Anonymous
    Anonymous
    Participant

    So this is a good time to invest if you search for the good valued property – so not to wait until next year IF YOU HAVE CASH ! And can make some certain offer that the seller cannot refuse ? but how about SHARED OWNERSHIP ? Anybody have any views ?

  • #85713
    Profile photo of katy
    katy
    Spectator

    Why does SHARED OWNERSHIP always appear in upper case 😕

  • #85716
    Profile photo of Anonymous
    Anonymous
    Participant

    because forum readers so far have not bothered to comment on it ! perhaps if I say that this question was about shared ownership then sensible people like katy may actually contribute an answer rather than commenting on size of font

  • #85717
    Profile photo of Anonymous
    Anonymous
    Participant

    @costa_light wrote:

    because forum readers so far have not bothered to comment on it !

    Maybe they ‘haven’t bothered’ because there are simply no members with experience of shared ownership.

    These people may be able to help?
    http://www.hamiltons-property.com/shared-ownership-properties.asp

  • #85718
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi Claire 🙂

    30/50% discounts on distressed and discounted sales . They sent me 3 emails today!!

    What a disaster ?

    Fabulous 2 bed 2 bath duplex penthouse for sale within the prestigious development of Las Lagos, situated frontline to the fabulous golf course of Santa Maria Golf & Country Club in Elviria, one of Marbella’s very best districts. Elviria is home to some of the finest sandy beaches… Price: €493,700 (£390,517) more info.

    Yep agree if you look carefully enough there are bargains about 😯
    Good site for bargains ( spot the lost leaders,its the oldest trick in the book) 😉

    Just Frank 8)

  • #85719
    Profile photo of Anonymous
    Anonymous
    Participant

    There certainly appeared to be a few “bargains” Frank! Lost leaders I know nothing about I’m afraid. 😕

  • #85721
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi Claire 😆
    As always things may not be as they seem.
    Check out whoes business this is and think you may find the same activities just an up to date mask.

    Just Frank (8)

  • #85722
    Profile photo of Anonymous
    Anonymous
    Participant

    @charlie wrote:

    @costa_light wrote:
    because forum readers so far have not bothered to comment on it !

    Maybe they ‘haven’t bothered’ because there are simply no members with experience of shared ownership.
    These people may be able to help?
    http://www.hamiltons-property.com/shared-ownership-properties.asp

    What you say is perfectly true charlie. But am surprised (a little) that there is zero input. And your link pointed to an outfit called propertypartnership.co.uk and it was broken so I suppose they are no longer interested. (There is an Agent in Gambia selling property in the same name though)

  • #85723
    Profile photo of Anonymous
    Anonymous
    Participant

    Check out whose business this is and think you may find the same activities just an up to date mask.

    Can’t be bothered Frank. We’re not buying anyway. 🙂

  • #85727
    Profile photo of Anonymous
    Anonymous
    Participant

    I have been wondering why this site (which I used to really value) has been very poor of late. I think this thread explains why. There seem to be a handful of people who hijack almost every thread for their own pleasure.
    Now that is off my chest I will give my opinion on shared ownership.

    Over the last few years we came to the CDS on holiday and thought it would be great to have a place there of our own, but the properties we liked were out of our price range. A relation was also thinking along the same lines and in the end we bought one between us about 18 months ago. It is used by family and friends only and we have a calendar for booking dates and all expenses are shared 50/50. For us it has been a good move and it also means that the property is being utilised more than it would have been.

  • #85730
    Profile photo of Fuengi (Andrew)
    Fuengi (Andrew)
    Participant

    Costa_light. the pitfalls of shared ownership are probably the same as other parts of europe.
    What happens if the owners have a falling out?
    one of the owners dies?
    etc…

    For any legal pitfalls you should talk to a lawyer. They all offer free legal advice these days

  • #85731
    Profile photo of Anonymous
    Anonymous
    Participant

    jwc – that is the first glimmer of hope. a sensible reply. thank you.
    in these days of instant communications and all kinds of tools to arrange dates of occupation on the internet, it would be a fairly simple matter to make suitable timetables and allow some flexibility for sharing a property.
    Clearly your arrangement is perfect because perhaps you only have one other ‘partner’ to share your property and it is kept within family.
    I can imagine that each owner could have their own ‘store’ of personal clothes or other items that they can leave without encroaching on others space.

    Fuengi – yes there are pitfalls in any shared ownership. I am thinking also of marriages or partnerships that fall apart. But presume that within the Contract of Sharing there will be rules and requirements. For example offering the share to the others at a fair market price. Lawyers can be useful but only when it comes to deciding on final wordings and forming an agreement.

  • #85732
    Profile photo of Fuengi (Andrew)
    Fuengi (Andrew)
    Participant

    @costa_light wrote:

    Fuengi – yes there are pitfalls in any shared ownership. I am thinking also of marriages or partnerships that fall apart. But presume that within the Contract of Sharing there will be rules and requirements. For example offering the share to the others at a fair market price. Lawyers can be useful but only when it comes to deciding on final wordings and forming an agreement.

    then you need to find out what can be written into the title deeds. these would sepcify that costa_light owns 50% and X owns 50%. Additional clause can be added to the deeds, but to what degree I don’t know.
    If you and X write both sign a contract stating terms and conditions, as long as its in keeping with spanish law, you can include whatever you want. Arbitration in case of disagreements, etc…
    Fair market prices and such are ambiguous. Would this be based on valuations? based on valores catastrales?

    What might be worth looking into is for you and X setting up a company and buying hte property through said company. Again though, i’m not familiar with what costs/issues this would cause.

  • #85735
    Profile photo of Anonymous
    Anonymous
    Participant

    Fuengi – yes I can imagine the complications of owning some real estate in Spain ! It is bad enough contemplating having just one simple single ownership sometimes. And maybe having a Private Company to own the property would be simpler together with a proper framework for change of ownership etc.
    I assume that in jwc ‘s case above, the property was bought on a family basis with a relation and the thought of forming a Private Company was not considered necessary.

  • #85815
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi Costa Light

    I had a property which I sold a year ago but was considering shared ownership – instead of selling it outright because use of a property for a couple of months a year is what a lot of people want and if they could get that for an affordable price then perhaps I could sell most of it and keep a part of it.

    I even had four others interested in buying a share. The idea was that I sell 80% to 4 people and keep a 20% shareholding. That everyone was allotted a number of weeks throughout 5 periods of the year (each period being ten weeks and each person being allotted a 2 week period in that time) each year the periods rotated so that no one person would hog that period (ie peak periods like summer and Xmas)

    However after a lot of thought I came up with the following thoughts

    1. I no longer control what happens to the property – what if it needs to be repainted for example – you then have 5 persons who have an equal say in this – death by committee
    2. What happens if I want to sell and the others do not or they want to sell and I do not.
    3. What happens if someone divorces?
    4. In my case (because I already owned the place) the only way that it could be achieved would be to create a limited company and that company buy the property. however who pays the cost of setting up the limited company, who pays the cost of managing the company, also the government do not like companies owning properties and demand a high tax for doing so (about 1-3% of he value if memory serves me right)
    5. What happens if someone wants to rent out their weeks – lets say the renters trash the place – who will put it right (and believe me renters do trash the place)
    6. Who will be the representative for the community of owners and will they have full voting powers from all other parties concerned
    7. What happens if ONE of the parties cannot afford to pay the mortgage on their share – will the bank repossess the whole house, will the other parties bail out that party, how could that party sell on their share
    8. What happens if one of the parties falls out with the neighbours (and this can be a serious problem) that then affects everyone. You may be highly considerate but one of the others may not be
    9. In the case of renting the property out. What happens if the property is not registered and one of the parties rents out and obtains a fine – who will pay this (this could be severe and in the tens of thousands of euros)

    In the end I decided that in fact it wasn’t a good way to go unless I could sell all five shares – but then that would be like passing the burden onto others which I couldn’t do, so sold it instead

    My own view is that unless there is a specific scheme set up and in place with very well defined criteria (what happens in certain circumstances) with exit routes etc defined and a well written contract, then I would not advise it.

    One other point, the banks do not like providing mortgages to more than one or two individuals on a shared basis (in Spain anyway) especially if those parties are relatively unknown to each other – so getting a mortgage is difficult. The reason being is that you are jointly a severely liable and it would require each individual offering a guarantor to each other. Not something I would want to do – so if one defaults each is responsible for paying that persons obligations. Then you have to ask the question what if that person just decides not to pay – you then get saddled with his/her mortgage payments and maintenance responsibilities etc.

    With regards to paying utilities most of these can be paid by Direct Debit, so you only need to transfer money to your Spanish bank account. You can also instruct a gestor to look after things for you in your absence (but ensure that any powers you give them are VERY specific)

    Anyway at the present time I would say you could put a low ball offer on a property – you may be surprised that it may be accepted – if you don’t try you will never know

    Best of luck

    Vince

  • #85818
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi Vince,
    It’s good to see you posting! 😀
    Hope all is rosy in your garden,
    Regards,
    Claire.

  • #85819
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi Claire

    Yes everything is fine. It has been a while (nearly a year or maybe more) but life has been hectic in that time. I am now re-arranging work so that I actually get time to do things and with great dividends but I will PM you with details as this is not the place

    Probably wont be as regular as I used to be but will try and keep up to date

    Regards and best wishes to all

    Vince

  • #85820
    Profile photo of Anonymous
    Anonymous
    Participant

    Your music was pleasing to my ears. And I do follow all your points on shared ownership especially the hassles involved with getting more than just one party to agree on anything ! I think from what you have said, that sharing for more than a couple others is going to be a pain. And the ownership would be far better if no Mortgage finance was involved. In an ideal world the sharing would be owned & controlled by close family and friends, and not “unknown” owners.
    On the other hand I can think of plenty of Timeshare deals that give you a week or so in a property and that property is well maintained and always kept spic and span. Also the newish fashion of buying Property Bonds is another example of where you could have a place for a fixed period each year and share it with others.
    So I do not believe that shared ownership has to be out of the question but I agree with you that some really careful thought is needed ! And a good contract with perhaps some local on the spot assistance for changeovers / cleaning the pool/ etc etc. I think that allowing any of the owners to sub let to a 3rd party would be a big No No. Unless agreed in advance with all the others and limited to family & friends only on a fee free basis. (After all if you own a property outright, you can still have some troubles with neighbours if you allow your noisy friends to move in !)
    Plenty of food for thought.

  • #85823
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi Costa Light

    thanks fro your comments about my music – very much appreciated.

    With regards to your points about shared ownership, I am not against it myself and would still consider it under different circumstances. If it was a villa I was buying without a community of owners for example then it simplifies things greatly. And as you say you would have to be very careful about who you got involved with.

    On the flip side of family and friends is that anything to do with money can be problematic – even sharing a house. You have to all be in agreement before you go ahead exactly the conditions you will operate under.

    In my own case having thought about it greatly (it was very appealing to still have the house but not have the mortgage to go with it) I went to my solicitor who basically told me that such contracts can cause a lot of problems and you have to be really sure of things.

    Anyway another possibility is an aparthotel. Dont know if they do them here in Spain but if they do it may be the answer to your problems. It is like a one bed apartment in a hotel and the hotel will manage the property for you. You can take as much or as little of the time for yourself and the more that you allow them to rent it out for you the bigger the share of the income you get.

    In this instance you own the apartment but have a hotel partner renting it out as a suite within the hotel. I think Oliva Nova up here do something similar and I am sure there are others (probably on golf courses) that do as well – something you could consider

    If I can help you in anyway then drop me a line. I have been out of the estate agents business for a couple of years but still maintain some contacts and still keep an eye on things

    Best of luck

    Vince

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