[Anonymous]

Hi,

Would like some advice. We purchased a 3 bed apartment in south Costa Blanca in 2005 in an urbanisation called Zeniamar . Very happy with it but our kids are getting older now and instead of being tied to the one place we would like to travel to other destinations. We purchased the property including a garage for E250,000 – I would be grateful for advice regarding what it might sell for in the current climate – is it a 20% reduction at the moment? Or is there anything selling at all?

Many thanks

Angela

[Anonymous]

My guess would be that you would be lucky to get €175000. I am no expert but if you want to sell quickly you have to follow the market. Sorry.

[Anonymous]

Hi Hudson,

No need to apologise – I appreciate your reply and take it on board that’s why I am trying to see it is feasible at all.

Many thanks

Angela

[logan]

In the year 2005 Spanish property was considered to be 40% overpriced. Most investors with the benefit of such advice recognised that fact and sold up whilst the going was good. It was not difficult to spot all the red flags.
I would therefore suggest your property today is worth no more than 150K. However given that it appears the market is falling more than the 40% estimate it could be more.
To take that sort of loss I would imagine is unsustainable given your reason for wanting to sell.
My advice therefore as a professional investor is hold on to your asset until the market returns. Rent it long term if you need to and think at least 5 years before the market stabilises.

[Anonymous]

Hi Logan,

Thanks for the advice. 40% is a bit of a hard pill to swallow. 20% to 30% is even hard to swallow but not as bad as 40%. Might try and do rentals perhaps short term lets rather than long term.

Thanks for taking the time to reply I appreciate it.

Angela

[Anonymous]

@angela wrote:

Hi,

Would like some advice. We purchased a 3 bed apartment in south Costa Blanca in 2005 in an urbanisation called Zeniamar . Very happy with it but our kids are getting older now and instead of being tied to the one place we would like to travel to other destinations. We purchased the property including a garage for E250,000 – I would be grateful for advice regarding what it might sell for in the current climate – is it a 20% reduction at the moment? Or is there anything selling at all?

Many thanks

Angela

Looking at kyero.com, it seems that there are 3 bedroom apartments in Zenia for around E125K.

Considering you purchased Euros at 1.5 Euro/£, i.e. the cost of your apt. was about £166K and that E125K is about £120K, your loss would be around 25|% which is not disastrous considering the current situation.

The main problem is that Torrevieja area is the most overbuilt area and there are hundreds of thousands of apartments for sale/rent.

Good luck!!

[Chris M]

Hi Angela,

I really don’t know if this works for you, but it worked for me.

I took a sterling view.

It sounds as if you are going to convert back to sterling once you have sold. If that is correct, could you not look at this in terms of you receiving back that which you paid in sterling?

What did you pay in 2005 for your €250,00? I don’t actually want to know it is just a view, but if it was perhaps at 1.45 at that time; if you then actually purchased for say £172,00 could you not see yourself selling for far less in euros now but not actually losing too much in sterling terms?

If indeed you are also considering that given all the market conditions, both here in the UK as well as Spain, you would even take a reduction simply to sell and move on, you could perhaps even drop your sterling requirement by say 10%. Creating an even more attractive euro price.

Now I am not advocating this, but if you do simply want to sell up and move on with different objectives and priorities in future, it is perhaps another perspective to take. Now would be the time to do that, I don’t think this issue of parity to the euro will last that long.

It would make your property perhaps far more likely to sell and I am sure open you up to the Spanish market, and saves the whole issue of renting and all the associated hassle and possible costs with that, and free’s up your capital too.

Not that you will get any decent interest on that capital anywhere of course. But at least you will move on far quicker, it is a possible moment in time, if you miss the exchange rate opportunity today, and by the year end the pound moves upward again, this opportunity could be lost to you.

As I say I don’t know if this works for everyone but it did work as a mindset and view for me.

Cheers

Chris

[Anonymous]

Hi Chris,

I’m Irish so purchased in Euro and hoping to sell in Euro. Are you suggesting trying to sell in sterling and then convert back to euro not to take such a hit?

At the moment just trying to free up some capital and have one less mortgage to pay at end of month. Have 2 children and enjoy spain immensly for 3 months of the year – had purchased with the idea of holding on to it until hopefully myself and hubby retire – but we have a while to go yet. We would obvioulsy have to take a hit on price but when you tot up what it costs between flights over keeping the place over in spain etc etc over and the interest on the mortgage – this hit we would be taking – the cost of keeping it for another 3 years would cover it.

I will take on board what you are saying about sterling and do figures. We are in an urbanisation by the name of Zenimar which is quite nice.

Thanks for the advice,

Angela

[Chris M]

Hi Angela,

My mistake, I am sorry, why do English people stupidly never consider that someone could also be Irish, I should know better.

This mindset doesn’t work for you on that basis, I had assumed that you were an English buyer and had originally converted from sterling.

The view might help the odd English person in a similar situation though.

But sadly that activity or view by many people would drive down the market for you Angela, however at least it might create a buying market, which you also need.

I think you should put it on the market regardless, if it isn’t for sale, no one can buy it, and take it from there.

Good luck to you,

Chris

[logan]

Property is the same as any other investment. You buy at one price and hope to sell higher having enjoyed your investment benefits.
In the case of a holiday home its the time you have enjoyed there. In share investment its the dividend. One cancels out the other. By that I mean share dividend can pay for a holiday in just the same way. Shares go up as well as down. Property has never been any different.
In the last 10 years in UK especially there has been a mind set that property investment was a one way street. You cannot lose! I have heard that said so often. It was wrong then, wrong now, wrong always.
Investment is about risk. Your risk. It does not matter if you put your money in a bank, shares, anunities, bonds, shares or property. The risk is the same depending which way the market wind is blowing.
At the moment property is on the floor and heading for the basement. However if you can the best option to to hold on. Hold on to your investment and enjoy whatever benefits you can.
Selling to cut loss is an end game. Stay positive things will get better. They always do.

[logan]

Property is the same as any other investment. You buy at one price and hope to sell higher having enjoyed your investment benefits.
In the case of a holiday home its the time you have enjoyed there. In share investment its the dividend. One cancels out the other. By that I mean share dividend can pay for a holiday in just the same way. Shares go up as well as down. Property has never been any different.
In the last 10 years in UK especially there has been a mind set that property investment was a one way street. You cannot lose! I have heard that said so often. It was wrong then, wrong now, wrong always.
Investment is about risk. Your risk. It does not matter if you put your money in a bank, shares, anunities, bonds, shares or property. The risk is the same depending which way the market wind is blowing.
At the moment property is on the floor and heading for the basement. However if you can the best option to to hold on. Hold on to your investment and enjoy whatever benefits you can.
Selling to cut loss is an end game. Stay positive things will get better. They always do.

[Anonymous]

The difference is that to buy shares your bank will not lend. However for
property it will. A good investment apart from its returns should always be done on borrowed money.

Here lies one of the Spanish problem. To borrow you need to notarise the loan, pay taxes & if you need to revise the terms of the loan you incur this cost again. This discourages the borrower to invest & as a result the economy suffers as wealth does not get created. The banks end up squeezing you for silly charges of €1 here & there.

[Anonymous]

The difference is that to buy shares your bank will not lend. However for
property it will. A good investment apart from its returns should always be done on borrowed money.

Here lies one of the Spanish problem. To borrow you need to notarise the loan, pay taxes & if you need to revise the terms of the loan you incur this cost again. This discourages the borrower to invest & as a result the economy suffers as wealth does not get created. The banks end up squeezing you for silly charges of €1 here & there.

[Anonymous]

Hi Logan and Shakeel,

thanks for taking the time to reply – I appreciate it. We use our place for 3 months of the year – would like to use it more but kids are in school here. We would get more value for it if we were retired. Even using it 3 months of the year – the flights are always expensive as they go up during the kids holidays – so this adds to price of having a home in spain. Don’t fancy the idea of doing long term lets – might think of doing short term lets but I feel there are so many places to rent. We really do like the area and are very lucky with the neighbours. when I sat down and added up all the costs for the amount of usage we get from it!

Anyway thanks for the advice,

Angela 🙂

[Anonymous]

Hi Logan and Shakeel,

thanks for taking the time to reply – I appreciate it. We use our place for 3 months of the year – would like to use it more but kids are in school here. We would get more value for it if we were retired. Even using it 3 months of the year – the flights are always expensive as they go up during the kids holidays – so this adds to price of having a home in spain. Don’t fancy the idea of doing long term lets – might think of doing short term lets but I feel there are so many places to rent. We really do like the area and are very lucky with the neighbours. when I sat down and added up all the costs for the amount of usage we get from it!

Anyway thanks for the advice,

Angela 🙂

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