[Anonymous]

I live in Barcelona and want to buy and renovate a property. My budget is €250k and that includes everything (including purchase and renovation costs). My aim is to add value to the property and make money on a re-sale, possibly renting it for two years before selling.
The big question I have is: should I buy in Barcelona which seems to be a sure-fire bet, or go for the lower-priced city of Valencia with the opportunity of an Americas Cup boost to property prices…?
Does anyone have any suggestions or comments, please?!
Many thanks

[Anonymous]

Hi Clinton

Some points you need to look out for. Firstly for your budget you should be aware that currently the market is extremely slow for property above €150K here in the Valencia region. Therefore buying a property as you suggest that needs doing up puts you in the €150-200K bracket – once renovated you would be over this bracket. It may be that by the time you decide to sell the market will have picked u. However best to buy a townhouse in a nice town to renovate than a villa (easier to sell and make a profit on and keep some money in the bank)

Also remember LRAU land grab. Although it is currently going through for debate and should hopefully be replaced soon it is not cut and dried – so only buy property in an urbanised area – but make sure YOU or your Lawyer checks this out.

If you are renting, be aware that in Spain long term rental is fraught with danger – the tenant has so many rights that you may find you cannot sell your house when you want because the tenant doesn’t want to move out. (I speak from having had my fingers burnt two years ago) so you should really be looking at short term rentals. So either in the City or by the beach – otherwise you just won’t rent out.

Positives

Of course we have the Americas Cup coming in 18 months time and the year after it the world Indoor Athletics Championships. This means that rentals will be excellent for about a year or two and capital appreciation will probably be high.

Also Valencia is a good 30% cheaper than Barcelona, 40% cheaper than Costa Del Sol and 50% cheaper than Madrid so it has some growing to do to catch up.

LRAU will hopefully be coming to an end soon. The EU are about to issue a directive to the Spanish and Valencian government (being debated on Dec 13th) to ensure that the replacement LUV law adheres to EU rules – under the threat of heavy economic sanctions if they don’t. These changes should be debated in the Valencian parliament by the end of this year – but I would imagine March is a likely date for anything to happen. It will take a while to enforce and change but once it does there will be a positive reversal of the Valencia region as a place to buy.

The region is actually a very nice place to live – the climate is good – not too hot in Summer and not too cold in winter (a few degrees warmer than Barcelona which was the reason I moved here initially) the beaches are excellent in most places – though the beaches at Valencia itself aren’t anything to write home about.

There are a lot of positives to consider for the region – but also some negatives too. Here are some to consider

Negatives

In 2007/2008 I would imagine a lot of people who have done what you are considering will then go to market to sell their properties to make their money. You will then have a situation where you have an over supply and not so much demand. Timing will therefore be of the essence

The development in the region is outstripping supply – some towns are over saturated – others are under developed – choose wisely and you will see good growth – choose wrongly and you will be stuck with a white elephant.

The Valencia region is heavily dependent on construction and tourism to the detriment of its once proud industries of Agriculture, fishing, ceramics and textiles. All these industries are suffering. Relying on construction is not a great strategy for long term growth.

What I would say is that for the next couple of years you will get some good returns – after that get out!

If you need any advice about buying in the region drop me a line and I will give you what ever advice you need

Regards

Vince

[Anonymous]

I bought a property in Valencia in April of 2004 to renovate. It’s now Decenber of 2005 and I still cannot get a work permit because of the institutionalized corruption of the Valencian Government. This a prime property in the center of the city and the politicians are determined to take control of it along with my neighbours buildings and give it over to their “amigos”. This is one of the most corrupt regions in Spain and without doubt, the most tainted political structure in Europe.

My advice is simple, invest to your heart’s content – just don’t invest in anything with real intrinsic value. Otherwise you will end up fighting city hall while they they try to bankrupt you courtesy of their endless supply of taxpayer euros.

I can only conclude that once you cross the pyrenees, you are no longer in Europe but instead have entered a corrupt hinterworld which does not function as a nation of laws – remember , this is the land which gave birth to all the cental and south american banana republics.

P.S. The amended land grab laws are pretty much the same deal dressed up in new clothes.

[Anonymous]

@Duped wrote:

I bought a property in Valencia in April of 2004 to renovate. It’s now Decenber of 2005 and I still cannot get a work permit because of the institutionalized corruption of the Valencian Government. This a prime property in the center of the city and the politicians are determined to take control of it along with my neighbours buildings and give it over to their “amigos”. This is one of the most corrupt regions in Spain and without doubt, the most tainted political structure in Europe.

My advice is simple, invest to your heart’s content – just don’t invest in anything with real intrinsic value. Otherwise you will end up fighting city hall while they they try to bankrupt you courtesy of their endless supply of taxpayer euros.

I can only conclude that once you cross the pyrenees, you are no longer in Europe but instead have entered a corrupt hinterworld which does not function as a nation of laws – remember , this is the land which gave birth to all the cental and south american banana republics.

P.S. The amended land grab laws are pretty much the same deal dressed up in new clothes.

Could not agree more. Spain must be one of the most corrupt countries in the world. Made far worse by the reluctance of the Goverment to get a grip on things. Perhaps the reason they will not is because of the amount of taxes they receive by turning a blind eye. Or perhaps I am being a liitle cynical??

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