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My partner and I lived for many years in Spain, both in Alicante and Malaga Provinces. We came to the UK in 2000 having bought a business and have recently looked at purchasing again in Spain. The yobs and the PC are driving us back. For the last two years before we came here we rented an apartment in Nueva Andalucia (Puerto Banus).
We have decided NOT to buy but to rent on our return. If you are contemplating purchase in the coastal areas I believe you should consider the following:
Pick the best area you can afford, to ensure future values if you wish to sell ( but do not be in a hurry to buy).
Take a long term rental. Our rental in PB was 1000 Euros pm in 2000. The cost for the same type of apartment is still the same AND we can rent furnished whilst in 2000 the property was unfurnished. The economics of too many properties bought on the bubble, dictate rental levels and ultimately selling prices. This IS a bubble just like the one in the late 80’s was.
Even if you do not want to use the property 100% of the time this is a better and cheaper option. Many owners will even allow you to let family and friends use the property in your abscence. Many owners are desperate to achieve an income, because they have bought having been sold the “self financing” lie by agents.
Just look at the numbers and in the current market where much Spanish property is seriously overvalued (40% in some cases) this is the only sensible option. In my experience if you live (rent) in an area that you would like to buy in, hey presto just watch how many sellers offering realistic prices on resales will come out of the woodwork to tempt you!
What is the worst that can happen? you spend a few thousand euros living in someone elses property for a year, having a great time, and not worrying about such nasties as whether the President of the Communityof Owners is about to abscond with the money he collected from you to paint pool pump house! When you consider an annual rent of say 12000 Euros, why that is not even the cost of your IVA and legal fees on a 120000Euro purchase is it ?
As for buying off plan, don’t even go there! There are plenty of “motivated sellers” in Spain, find one and drive a hard bargain. Don’t be afraid to haggle.
The old addage in Spain amongst agents was always “When the British arrive, they usually leave their brains at the airport”
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Good post Christopher.
But I just want to comment on one thing. So many people talk about “Spain” when in actual fact they are talking about the Costa del Sol. What is happening there isn’t happening all over Spain, just in some parts.
I agree with Christopher about not buying off plan on the COSTA DEL SOL at the moment because you can indeed drive a hard bargain with a resale.
We wanted to buy elsewhere, and found that there was very little in the resale market to tempt us, but there were plenty of good off-plan deals.
The Spanish owners around here put their properties on the market, and if they don’t sell them within a few months they put the prices UP!!!! The rationale being that the market value of the property has risen since it first went on the market. You can make an offer, but aren’t likely to get much knocked off the asking price at all.
Well, with this in mind it put us off going down the resale route. There was more to choose from when buying off plan AND it was much cheaper.
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