Re: Re: Does any other market exhibit this madness!

#113026
Chopera
Participant

@GJ wrote:

In a falling market, for a €115k flat you need a tenant paying twice that for it to make sense.

That comment is far too clever for my inadequate brain. Where did the tenant come from ? 😆

it came from further up the thread – PeterHun’s comment to be precise:

My agenda is that I have no interest in buying or selling in Spain. I see it as a millstone, tying you to Spanish tax demands and costs that will far outweigh any benefit of living there, never mind investing.

If you cannot find me an average job paying 40K euro’s per year in a reasonable commuting distance or a reliable tenant willing to pay 7000 euro’s per year rent, I will say its not worth that money.

In the UK before the BTL bubble and interest rates started being messed around with, the rule of thumb for property investors was BTL only made sense with a 12% yield. This was back in the days of 6 or 7 % base rates, so you could shave off a couple of % these days, so say 10% makes sense in the UK. However in Spain the landlord has to assume additional costs, and the rental laws in Spain make it favourable for the tenant as well. So I’d stick to 12% being the minimum acceptable BTL yield for Spain. So if you pay €115 for a flat then for a 12% yield you need a tenant paying €13,800/year – almost twice the €7000/year PeterHun mentioned. Make sense now?