To buy or rent

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This topic contains 3 replies, has 3 voices, and was last updated by Profile photo of Anonymous Anonymous 10 years, 1 month ago.

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  • #52393
    Profile photo of Anonymous
    Anonymous
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    We have just sold our townhouse in Calahonda for a reasonable price, it was our intention to buy immediately but after reading some of the comments on this forum would it be advisable to rent rather than buy. We are not buying for investment but to have a property we can enjoy which is approx 6/7 months of the year, but at the same time we do not want to buy and then see prices drop substantially.
    There are many properties on the market at the moment that will not sell because the owners are refusing to accept a price that is below their perceived value, properties that are being sold at the moment are those whose owners accept a reasonable offer.

    I saw that Drakan had recently advised the following.
    The simplest advise investing in property in Spain would be to wait and hold onto your money for 3-5 years. Then buy.

    I don’t intend to “teach” anyone anything MG. I’m not obsessed with banks, it’s just that I happen to be a real estate lawyer and I happen to know that prices are going down no matter what the media hype or the government’s statistics say. I see it every day, it’s no big secret.

    Investing now in -spanish- property is foolish. That’s why I write of banks and other investments.

  • #67055
    Profile photo of Anonymous
    Anonymous
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    @gnik wrote:

    I saw that Drakan had recently advised the following.
    The simplest advise investing in property in Spain would be to wait and hold onto your money for 3-5 years. Then buy.

    I don’t intend to “teach” anyone anything MG. I’m not obsessed with banks, it’s just that I happen to be a real estate lawyer and I happen to know that prices are going down no matter what the media hype or the government’s statistics say. I see it every day, it’s no big secret.

    Investing now in -spanish- property is foolish. That’s why I write of banks and other investments.

    Drakans comments were perfectly valid but I am sure his comments relate to anyone proposing to buy as a pure investment. If as your opening comments suggest you plan to buy purely as a property for your personal use the current market conditions to find a good resale and drive a hard bargain. The vendors least likely to accept offers are those that have bought in the last 2ish years and have therefore seen little or no real growth in their property value, anyone that purchased maybe 5-6 years ago will still have seen quite significant capital growth and are in a position to consider sensible offers.

    If you find the right property, at the right price, in the right location, even if prices continue to fall in the short/med term they will recover in the long term, as long as you dont buy in areas saturated with new build developments where price competition amongst vendors is very high.

    Research the area, research the local prices and markets, dont be afraid to make sensible offers. Above all dont let your heart rule your head.

    Jim

  • #67056
    Profile photo of Anonymous
    Anonymous
    Participant

    @Drakan wrote:

    Investing now in -spanish- property is foolish. That’s why I write of banks and other investments.

    Indeed, my comments were more focused from an investment point of view as that was a thread biased to giving investment advise.

    If you need a house to live in, I advise you rather than buying off-plan propeties to buy resales. There are now plenty of resales available which are trouble-free from the legal point of view (they have LFO, utility connections, no planning problems, Building licences in place, no developers about to go bankrupt as we are seeing already etc…) and many sellers are offering already very attractive discounts because we are in a Buyer’s market, so prices can be negotiated a lot with vendors right now and are willing to accept large discounts. Accept no black money (illegal), just walk away, the vendors will change their minds, believe me. Renting for 3-5 years in Spain when you really want a house to live in and not as an investment would be very foolish and would mean just throwing your money away, at least in Spain. Prices will drop, especially in the costas by perhaps 20-30%, no more than that IMHO. But that’s ok after seeing how prices have soared for the last 10 years tripling some property values which is just crazy.

    Due to the many changes in law that I’m seeing almost every month that will be in effect as from the 1st Juanuary 2007 (i.e. CGT down from 35% to 18%, Mortgage Law changes reducing the expenses of mortgages and Notary fees reducing them by as much as 60% and even 90% in some cases, 5% Tax Authorities retention for non-residents going down to 3%, new mortgage products which were unknown in Spain and are aimed at the elderly segment over 65 years old etc…) I think that it will be an excellent opportunity to wait and buy resales -to live not as an investment- as from the first of January next year 2007 when all these legal changes will be in place saving you a great deal of money.

    If you are only into making money out of property in Spain -investing- forget it. Wait 3-5 years in Spain to buy anything. You will be able to pick up huge bargains as it always happens in Spain in the following years when all this real estate frenzy comes to an end and the prices are once more corrected and adjusted.

    Not only in Spain:

    http://www.nytimes.com/aponline/business/AP-Economy.html?_r=1&ref=business&oref=slogin

    When the US sneazes we Europeans catch the cold ….

  • #67076
    Profile photo of Anonymous
    Anonymous
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    Thanks for the advice

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