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Hi,
im looking at buying a house over in spain near the mojacar area as an investment but still not sure whether it is the right thing to do.
It would be used as a holiday home but in the long term would be used as a potential retirement home, i don’t have a pension or anything so it could be a good investment.
Does anybody know what sort of mortgages banks are willing to lend non spanish citizens and just peoples general thoughts?
I look forward to hearing any feedback 😀 -
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OK I can only answer the “what are people’s general thoughts?” part of your post. And my general thoughts are you need to spend one or two years researching your target area, working out exactly what the costs of buying and maintaining a property are, what the rental income will be and which part of the year it will let and, perhaps most important of all, what the market value of properties are (it will be a lot less than what people are asking)
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OK I can only answer the “what are people’s general thoughts?” part of your post. And my general thoughts are you need to spend one or two years researching your target area, working out exactly what the costs of buying and maintaining a property are, what the rental income will be and which part of the year it will let and, perhaps most important of all, what the market value of properties are (it will be a lot less than what people are asking)
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DO NOT RELY ON RENTING TO PAY YOUR MORTGAGE !!!! . Murcia & Valencia has the highest number of empty properties. You will be competing with them. Besides the usual cost of running & maintaining the property and as you can read from other thread that the regions are bringing in their own rules in so far renting holiday homes are concerned.
Besides the death duty taxes are hjgh and any gain you would have made will be wiped out
If you have money to invest I should not look further than UK.
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DO NOT RELY ON RENTING TO PAY YOUR MORTGAGE !!!! . Murcia & Valencia has the highest number of empty properties. You will be competing with them. Besides the usual cost of running & maintaining the property and as you can read from other thread that the regions are bringing in their own rules in so far renting holiday homes are concerned.
Besides the death duty taxes are hjgh and any gain you would have made will be wiped out
If you have money to invest I should not look further than UK.
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Oh no don’t get me wrong i would be able to afford the house if it were rented out or not, that would just be an added bonus if it was.
I have been to the area on and off for around 4years now but i do need to do alot more research, the main reason behind looking at this was because im not in a pension at the minute and saw it as an opportunity.
Im just struggling with high mortgage deposits at the minute over in the uk. So i need to find out really what deposits non spanish citizens need to put down. It does seem more complex in spain than the uk though! -
Oh no don’t get me wrong i would be able to afford the house if it were rented out or not, that would just be an added bonus if it was.
I have been to the area on and off for around 4years now but i do need to do alot more research, the main reason behind looking at this was because im not in a pension at the minute and saw it as an opportunity.
Im just struggling with high mortgage deposits at the minute over in the uk. So i need to find out really what deposits non spanish citizens need to put down. It does seem more complex in spain than the uk though! -
Mojacar is a fabulous area!!! 😀 😀 😀 😀 😀 with every amenity imaginable, and now with all the bank repos it just couldn’t be a better time to buy. You’ll get up to 70% off original prices in areas like Mojacar, Roquetas, Agua Dulce – the best beaches in Spain not to mention the climate.
Research?? well, obviously – check out this website for buying costs and advise and then you’re ready to roll; oh, and get an independent lawyer; ie not connected to the local agent 😉 😉 😉 😉
Check out the bank websites on idealist.com (right hand side on main page) for a start; great flats for €60,000 and the banks will lend you up to 50%; a bit more if you are spick and span!!
Or you could wait for the best to sell and the prices to rise or even worse waste five more valuable years as we hurtle inexorably to the grave 😐 😐 Enjoy life to the full!!!!
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Mojacar is a fabulous area!!! 😀 😀 😀 😀 😀 with every amenity imaginable, and now with all the bank repos it just couldn’t be a better time to buy. You’ll get up to 70% off original prices in areas like Mojacar, Roquetas, Agua Dulce – the best beaches in Spain not to mention the climate.
Research?? well, obviously – check out this website for buying costs and advise and then you’re ready to roll; oh, and get an independent lawyer; ie not connected to the local agent 😉 😉 😉 😉
Check out the bank websites on idealist.com (right hand side on main page) for a start; great flats for €60,000 and the banks will lend you up to 50%; a bit more if you are spick and span!!
Or you could wait for the best to sell and the prices to rise or even worse waste five more valuable years as we hurtle inexorably to the grave 😐 😐 Enjoy life to the full!!!!
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@Joe sheeran wrote:
Oh no don’t get me wrong i would be able to afford the house if it were rented out or not, that would just be an added bonus if it was.
I have been to the area on and off for around 4years now but i do need to do alot more research, the main reason behind looking at this was because im not in a pension at the minute and saw it as an opportunity.
Im just struggling with high mortgage deposits at the minute over in the uk. So i need to find out really what deposits non spanish citizens need to put down. It does seem more complex in spain than the uk though!I thought the UK governmnet was going to introduce a new “Help To Buy” scheme to help subsidise deposits next January. For Spanish residents the banks ask at least 20% deposit so I expect it is more for non-residents.
I’m not sure about your thinking behind buying a Spanish property as an investment. The idea behind an investment is that you get more money out of it than you put into it. If you buy a property in Spain you will pay at least 10% up front on purchase costs and then maybe a few hundred euros a month keeping the place going. That’s a lot of money to make up through either rental income or price increases. OK you might recuperate a bit if you decide to live there through retirement, but I suspect you’ll be better off buying somewhere in the UK. Then when it comes to retirement and you decide to move to Spain you have the option of selling the UK property and buying one in Spain or you can rent out the UK property and have some kind of income that way.
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@Joe sheeran wrote:
Oh no don’t get me wrong i would be able to afford the house if it were rented out or not, that would just be an added bonus if it was.
I have been to the area on and off for around 4years now but i do need to do alot more research, the main reason behind looking at this was because im not in a pension at the minute and saw it as an opportunity.
Im just struggling with high mortgage deposits at the minute over in the uk. So i need to find out really what deposits non spanish citizens need to put down. It does seem more complex in spain than the uk though!I thought the UK governmnet was going to introduce a new “Help To Buy” scheme to help subsidise deposits next January. For Spanish residents the banks ask at least 20% deposit so I expect it is more for non-residents.
I’m not sure about your thinking behind buying a Spanish property as an investment. The idea behind an investment is that you get more money out of it than you put into it. If you buy a property in Spain you will pay at least 10% up front on purchase costs and then maybe a few hundred euros a month keeping the place going. That’s a lot of money to make up through either rental income or price increases. OK you might recuperate a bit if you decide to live there through retirement, but I suspect you’ll be better off buying somewhere in the UK. Then when it comes to retirement and you decide to move to Spain you have the option of selling the UK property and buying one in Spain or you can rent out the UK property and have some kind of income that way.
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As someone who owns near Mojacar I can state what it is like. It’s a nice beachy town, very British but also with a good mix of Spanish.
It has the playa beach and then the small whitewashed pueblo up the hill. There are hotels, restaurants, bars etc. and it is a very popular area. Traffic movement is tricky during the summer months.
My Dad looked at a place there and decided against it. It was one of those little ‘villas’ up away from the beach but there are so many there that it would be impossible to park a hirecar anywhere near.
Would I buy there? Probably not actually to be right in the middle of Mojacar but in a town or the countryside closeby?
I know a lady who does rentals, Wendy, so you’d be wise to check out the competition?
http://www.spanishpropertychoice.com/
Banks would sell properties for much less but there are few horrible white modern things which must have lots of repos. Yes right on the beachfront but I would hazard a guess that they are really badly built (?)
Spectrum Radio is in Mojacar as well. There are various topics currently such as the lady Mayor which hardly anyone likes who banned dominoes etc. in her quest against noise! http://www.costaalmeria.spectrumfm.net/
Aren’t banks now only giving 80% mortgages? If you buy a repo from them they’re sure to bite your hand off aren’t they? You’ll be on 5 or 6% interest rate though….?
Personally I’d say DON’T DO IT.
Why don’t you just enjoy renting or staying in a hotel whilst visiting the area… so many Brits would tell you that they wish they weren’t tied down to their spanish property!!!
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As someone who owns near Mojacar I can state what it is like. It’s a nice beachy town, very British but also with a good mix of Spanish.
It has the playa beach and then the small whitewashed pueblo up the hill. There are hotels, restaurants, bars etc. and it is a very popular area. Traffic movement is tricky during the summer months.
My Dad looked at a place there and decided against it. It was one of those little ‘villas’ up away from the beach but there are so many there that it would be impossible to park a hirecar anywhere near.
Would I buy there? Probably not actually to be right in the middle of Mojacar but in a town or the countryside closeby?
I know a lady who does rentals, Wendy, so you’d be wise to check out the competition?
http://www.spanishpropertychoice.com/
Banks would sell properties for much less but there are few horrible white modern things which must have lots of repos. Yes right on the beachfront but I would hazard a guess that they are really badly built (?)
Spectrum Radio is in Mojacar as well. There are various topics currently such as the lady Mayor which hardly anyone likes who banned dominoes etc. in her quest against noise! http://www.costaalmeria.spectrumfm.net/
Aren’t banks now only giving 80% mortgages? If you buy a repo from them they’re sure to bite your hand off aren’t they? You’ll be on 5 or 6% interest rate though….?
Personally I’d say DON’T DO IT.
Why don’t you just enjoy renting or staying in a hotel whilst visiting the area… so many Brits would tell you that they wish they weren’t tied down to their spanish property!!!
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I just wouldn’t do it. I still don’t think prices have hit the bottom yet. If you want an investment that you can access in the long term (future sale of the property) and in the meantime have access to income from rental, then I recommend you buy in the UK, for the following reasons:
1. You’re more likely to pay a realistic price in the first place
2. Less risk of devaluation
3. No costs of international money transfers, either UK to Spain should you not rent and need to pay maintenance fees, or Spain to UK should you be transferring income rental to your own country (although a spread of GBP and Euro is not a bad strategy)
4. Easier to manage your property if it’s close to homeIf you want to holiday in Spain, rent for a week.
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I just wouldn’t do it. I still don’t think prices have hit the bottom yet. If you want an investment that you can access in the long term (future sale of the property) and in the meantime have access to income from rental, then I recommend you buy in the UK, for the following reasons:
1. You’re more likely to pay a realistic price in the first place
2. Less risk of devaluation
3. No costs of international money transfers, either UK to Spain should you not rent and need to pay maintenance fees, or Spain to UK should you be transferring income rental to your own country (although a spread of GBP and Euro is not a bad strategy)
4. Easier to manage your property if it’s close to homeIf you want to holiday in Spain, rent for a week.
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Sound advice Horlics.
1. Spanish banks are only lending on properties they own and ask for a 40% deposit from foreigners.
2. If you buy a repossessed property on a mortgage you will pay substantially more for it.
3. The government in Spain is cracking down on renting by foreigners.
4. Any property you buy will have overheads, community charges, council tax.
5. You will have to pay income tax on the rental income or risk fines from HMRC.As for investment because of the huge over supply of property in Spain and the state of their economy any decent capital value rise will be a long way off. 10 years in my view.
Remember any costs you sustain during that ten years needs to be added to the purchase price. Those costs will increase year on year. So if inflation is say 3% you will need an annual 5% value increase just to stay even.
Interest rates in EMU will also rise at some point adding to your costs.
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Sound advice Horlics.
1. Spanish banks are only lending on properties they own and ask for a 40% deposit from foreigners.
2. If you buy a repossessed property on a mortgage you will pay substantially more for it.
3. The government in Spain is cracking down on renting by foreigners.
4. Any property you buy will have overheads, community charges, council tax.
5. You will have to pay income tax on the rental income or risk fines from HMRC.As for investment because of the huge over supply of property in Spain and the state of their economy any decent capital value rise will be a long way off. 10 years in my view.
Remember any costs you sustain during that ten years needs to be added to the purchase price. Those costs will increase year on year. So if inflation is say 3% you will need an annual 5% value increase just to stay even.
Interest rates in EMU will also rise at some point adding to your costs.
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Blimey, doesn’t this forum look a bit strange. Anyway, about buying a house in Spain at this time. All you need to do is to look at the TINSA index, probably the most reliable source of official statistics.
If you still want to buy in Spain after looking at those numbers, you’re a gambler. I would advise a holiday in Las Vegas, take your house-buying, stake money with you, and if you don’t want to fluff about too long, put the lot of on either black, red, odds or evens.
The odds of winning are much better than buying in Spain at this time.
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Blimey, doesn’t this forum look a bit strange. Anyway, about buying a house in Spain at this time. All you need to do is to look at the TINSA index, probably the most reliable source of official statistics.
If you still want to buy in Spain after looking at those numbers, you’re a gambler. I would advise a holiday in Las Vegas, take your house-buying, stake money with you, and if you don’t want to fluff about too long, put the lot of on either black, red, odds or evens.
The odds of winning are much better than buying in Spain at this time.
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You know the old saying-
http://www.greendoorenterprises.com/content/a-145/When-There-Is-Blood-In-The-Streets-Buy-Property
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You know the old saying-
http://www.greendoorenterprises.com/content/a-145/When-There-Is-Blood-In-The-Streets-Buy-Property
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That link describes historically that gambling when markets are down sometimes brings rewards. What is does not say is the thousands of times the contrary has happened and people lost their shirts.
There are no rules to investing otherwise we would all be billionaires just a great deal of luck and high risk reward.
Investing and gambling are the same sides of a coin. Never invest what you cannot afford to lose.
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That link describes historically that gambling when markets are down sometimes brings rewards. What is does not say is the thousands of times the contrary has happened and people lost their shirts.
There are no rules to investing otherwise we would all be billionaires just a great deal of luck and high risk reward.
Investing and gambling are the same sides of a coin. Never invest what you cannot afford to lose.
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@logan wrote:
That link describes historically that gambling when markets are down sometimes brings rewards. What is does not say is the thousands of times the contrary has happened and people lost their shirts.
There are no rules to investing otherwise we would all be billionaires just a great deal of luck and high risk reward.
Investing and gambling are the same sides of a coin. Never invest what you cannot afford to lose.
I saw a report a while back which showed that funds which had bought after recent share price gains tended to outperform funds that bought after recent share price falls. It’s annoying because I can’t find it, but I found it interestingly counterintuitive. I don’t think it was recommending that people buy after recent gains, it was just trying to point out that trying to pick the peaks and the troughs is pretty futile.
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@logan wrote:
That link describes historically that gambling when markets are down sometimes brings rewards. What is does not say is the thousands of times the contrary has happened and people lost their shirts.
There are no rules to investing otherwise we would all be billionaires just a great deal of luck and high risk reward.
Investing and gambling are the same sides of a coin. Never invest what you cannot afford to lose.
I saw a report a while back which showed that funds which had bought after recent share price gains tended to outperform funds that bought after recent share price falls. It’s annoying because I can’t find it, but I found it interestingly counterintuitive. I don’t think it was recommending that people buy after recent gains, it was just trying to point out that trying to pick the peaks and the troughs is pretty futile.
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certainly blood on the streets right now
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certainly blood on the streets right now
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@Pizzacheaze.Who says money is not important. It is as important as lots of cheese on a Pizza !!!
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@Pizzacheaze.Who says money is not important. It is as important as lots of cheese on a Pizza !!!
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My experience (bought 10 years ago) is that while purchase costs are high (c10%) running costs are low.
For my 2 bed apartment in a small community of 17, with swimming pool my community fees are €600 a year, IBI tax €120 a year and imputed rental tax about €70 a year. (Before buying in a community i would check debtors and financial situation. No more than 10% long term debtors and a healthy surplus in the bank).
Based on the neighbour’s price achieved in a sale last month the apartment has decreased in value 10% in the 10 years in €s and just about maintained its value in £s, because of exchange rate changes.
Annual rent i get off holiday makers varies between £5,000 and £7,000 and we use it 2 or 3 months a year. Costs associated with rentals (electricity, laundry, cleaning, repairs etc) and Spanish tax mean we end up with £2,500 to £3,500 a year. Easily enough to pay for the annual costs, our flights over and car hire while we holiday.
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Ashtondav -Buying 10 years or more ago for cash was the time to do it. I did the same but much longer in terms of years and of course we are the relative winners.
I would say your experience is fairly typical of the investment positive aspects of Spanish property provided you are debt free and the property is in a desirable place for holidays. 1 community debtor is indeed surprising but 1 from 17 is a pretty normal average.
Don’t forget to factor into your equation the loss of capital gain you would have achieved over the decade had the investment been in equities for example. Of course that is balanced by the holiday use and your costs being covered.
You do have a few head winds to face now. Selling for what you paid is not worthwhile, taxes and maintenance are rising, holiday lets falling in value as so much choice is available. If new laws are passed making holiday lets illegal it will be difficult to cover your annual outgoings.
You are one of the fortunate ones there are equally many examples of disaster.
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I read with interest the opportunity cost of one invest against another, annuities, stocks etc.
I bet the feeling/joy/excitement of getting the keys to your property, buying furniture, plants for the terrace etc cannot be substituted or measured in monetary terms. Of course all this could change if the property turns out to be illegal. -
I remember the present one (and it will be the last one) well. A good few years ago now, everything totally legal, a few million Pesetas counted by the seller in the counting room, the whole transaction oozing respectability. They all knew each other well – local, well respected business people, the whole thing sailed through in a week.
We got the keys along with flowers for my wife, there were more flowers inside the house and we are still friends with the seller, the notary is no longer around, a couple of Russians shot him dead a few years ago, and the bank manager is now in prison.
Whenever I need a good laugh, I have a look at the escritura. During a moment of panic quite recently I took it to show my original solicitor, who is still around, amazingly, he’s a high ranking politician now.
He wasn’t worried. He said, ‘You want to sell, come to me.’
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@Joe sheeran wrote:
So to sum it up i really need to buy a house in the uk rather than investing in a holiday home as a retirement investment?
I can’t see a Spanish home being a particularly good investment, particularity if renting it out was going to be an option. I think the UK market s a much safer bet at the moment.
However, the holiday home could be a useful investment providing that:
1) You are thinking long term (20 years or more).
2) You are going to be using it a lot, so that it works out cheaper or much more convenient than rentingD
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I will accept blood in the street. Where the vulture funds offereing of 20% of the Banks/developers stock. A property costing €270k at the peak is now on the market for €200k is not blood in the street.
I am not bringing the banks mortgage offers attached to the properties which ultimately pushes the price over the life time of the mortgage .
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