Surviving the Nightmare - Spanish Courts a Law Unto Themselves.

hi everybody before i start i would like to point out that i am going to Granada monday with the intention of reserving a 1 bed apartment on Medina Golf subject to the viewing trip.i have real positive views on this development, i think its in a great location will be high quality and hopefully turn out to be a good investmen/holiday home.however looking at the guaranteed rental scheme and based on a one bed apartment ie 163k plus 7%iva[vat] making a total of 174,410E the 5% guaranteed rental comes to 8,700 per annum =720e per month which is a fairly healthy sum!! however Royal Peninsulas management fee by 2009 will be 2100e and you will be required to purchase their funiture pack which will be approx 5 to 6000 Euros so i think it might be safe to say that we will be fortunate to receive any income in the first year.sorry to bring this negative vibe to the forum just wondered what other peoples thoughts are.....is there a case for furnishing it yourself, marketing it yourself? love to hear other buyers comments

Yes would agree with that on the guaranteed rental package I believe you still need to put money into it.

If you are taking a mortgage out for it, the rental payments will only cover the interest only repayments. Rates are on the increase having been at their lowest rates ever in the past few years. You should not be working of a rate of say 3.5% to 4% as by the time the development comes around the European Central Bank will be much higher. The base rate has increased by 1% since last year and at least another 0.5% is expected (December and Spring). That means the base rate will be 3.75% - 4% by middle of next year. Add the banks margin and that would be at least 5%. This means your rent will only cover your interest on the mortgage. Obviously by 2008 this may change again, but it is highly unlikely that it will reduce to the rates that have been available for the past few years. I work as a mortgage counsultant in Dublin so would be aware that rates are expected to go in the Euro zone. When I spoke to a mortgage consultant in spain they said my rate would be around 3.75% to 4%. Total bull to be honest!

My hope would be that the rates would be around 4.5% to 5%. Covering repayments on interest only. Then I would have to put in the maintenance myself and also Peninsulas fee.

Anyway that was all very longwinded way to basically say, that if at the time there is a better return on the variable i think i will take it. You have to consider if they are willing to offer 5% guaranteed rental for 10 years what are they actually making on it?

 

ok, here we go again! [everyone groans!] a 1bed apartment at 163k plus vat comes to approx 174k, rental guarantee at 5% = 8700 minus mangement fee 2100=6600, 6600 divided by 12=550 divided by 4= 138 euros per week approx which i think we would all agree would be very helpful towards financing our purchases. but let me run this by you..... a customer phones your  management company and wants to rent a 1 bed apartment for a week....its 350 euros a week they say....thats fine says customer.....now the management co can do two things A direct them to a guaranteed client who they have paid 138 euros and make a profit of 212 euros or B direct them to a variable client and make er nothing!! again sorry to bring a negative to the forum but i think these things should be discussed. as i said before i am really sold on this development and just wondered if anybody had any other ideas ie generating income marketing etc

I have to say I hadn't thought of that. Why would peninsula put anyone in the variable rental scheme if they could put them in the guaranteed scheme, only if all the guaranteed rental scheme apartments were full I assume

Also is the 5% guaranteed not just on the purchae price of €163k, and not of the inclusive vat figure?

I reserved a 1 bedroom apartment in Medina Golf at the weekend and was concerned about the problem that Peninsula might not be motivated to rent out the "variable rental" properties.  It is my understanding that if you opt for the guaranteed rental your apartment will be passed on to tour operators who will rent it out.  If you opt for the variable rental, Peninsula themselves will try to attract the rentals and you will also get any rentals from the tour operators that they can't meet from their pool.  So their motivation is to keep you happy so that you keep paying the fee. Personally I would prefer the variable rental as I want to use the apartment myself, particularly in the skiing season.  Also, the effective guaranteed rental (after taking off the affiliation fee of 2100 euros) is about 3.7% for a 1 bed apartment compared to 4.1% for a 2-bed.  I'm new to this but I'm hoping that I can achieve better than 3.7% on an apartment with genuine all year round possibilities. 

Hi Cardiff. welcome to the forum, was meant to visit Granada Monday but due to a Baggage handling strike flights were cancelled by Ryanair grrrrrrrr anyway hoping to get there after Xmas now...... with regards to the rental scheme i feel if your in the guaranteed, say for the first year, and you have purchased your furniture pack with your own funds [by the way.... does anyone know the prices??] then it will still give you roughly 500 Euros a month after deducting the Management fee.which i think is a pretty good deal. however if your in the variable scheme and with there projections of the rates for a 1 bed apartment [ roughly 600Euros per week] then any weeks over ten will generate you more income[but of course with a degree of risk!] and of course with the added bonus of being able to use the apartment yourself.i believe that with the management company marketing your property and myself, that more than ten weeks can be acheived. because we all have friends family workmates etc etc spread the word, let everyone know. what about creating a pool of owners or even designing a website? [today Atarfe.... tomorrow the world!!!!] anyway sorry about my rantings!!! what does anyone else think

Hello everyone.  I have jus reserved a two bed appartment in Medina Golf.  My feelings for this place are excellent.  Last week I viewed the site with a rep from H2O and it is looking great.  For me perhaps the perfect investment because of the all year round rental opportunity. 

As Granada is so scorchio I would be happy to use the property myself during April which will allow both skiing and beach time - nice.  I am trying to decide which rental package and am swaying towards 2 yr guarenteed followed by variable at which point the resort will still manage the propert and I will maximise advertising myself and take the oppportunity to use it.  This means I will take the furniture package too keep in line with the rest of the resort.  I have yet to get confirmation on the cost of this but the developemnt is still 2 yrs away from completion. 

The feedback here is great.  Does anyone have a breakdown of their costs they could exchange with me to get that warm fuzzy feelin?  sutcliffe.lorenzo@t-online.de

Have a look on the new website you can find all the details of medina elvira and you can see all the pictures of the just opened golf course, it´s very interactive with videos of all the places, www.medinaelvira.com

Hello all,

new here but have a hold on a 2 bed in Medina Golf to sign on the dotted line tomorrow. The debate about fixed or variable is no doubt going to run for a while but you may be interested in some information I got today (well I wasn't aware!). Apparently, the variable offering works on a pooled basis and therefore individual lets get pooled and shared with the other owners based around some parameters presumably number of beds and proportion of the year you opt to have control. Has anyone else come across this and what are the thoughts?

Hello All.

I have been directed to this forum by Rick Prescott.  I am from the management company and you can contact me directly on mc@royalexecutive.com

There is lots of information available from us on the various developments on Medina 23.

The Guarantee v Variable rentals.  There is a clarification necessary here with regards to how we would rent the Variables.

The Guarantee apartments are all pre-contracted (we have been promoting the development for well over a year already, at international holiday and travel exhibitions). As the Guarantee apartments are pre-contracted, we do not have to worry about advertising or promoting them - that becomes the job of the Travel company who has contracted them from us. Äll the heavy advertising will be done on the Variable rentals.

We do not make a profit from the Guarantee rentals: we price the holiday accomodation weeks to cover the 5% comittment and add cleaning and laundry costs:  that way we keep the cost low enough to be attractive to the travel industry.

For complete information, and to begin talking with us directly, just drop an email to the address given above and we will be more than happy to confirm and clarify any questions you may have.  Just ask away !!

Look forward to hearing from you all...and the development is going to be magnificent.  Its coming along well and its very exciting!

Best regards

Margaret

 

Thanks Margaret - I've tried this over the last 2 months and am still waiting for a reply to my questions.