Reasons for NOT buying in Spain at the moment

 Hi all - I know I have a tendency to be tongue in cheek but this is a serious question.  I have been looking for a second property to buy, in the Almeria/Mojacar area for several months now, and I have said on eos that I am taking my time.   However, the New year property opportunities which have dropped into my mail box already this year include what seem to be amazing properties e.g. (also on Kyero)   - a 3 bed 3 bath town house of over 100 sq metres build on Valle Del Este golf resort for 79.950 euros.   The advert says (obviously) it is a distressed sale - and that these were marketed and selling at 290.000 euros at one time.  SO, I would like to hear if people think this is a good time to buy or if they perceive real dangers in buying something so cheap.  All opinions most welcome. FYI I have never been tempted to by on a golf resort..................until now!!!   

 Why would you want to buy a second property in Spain?  I can understand why people buy a property in Spain - either to live or for holidays but I think as a pure investment it does not look the best idea in an area like Mojacar.  It is very difficult to make much profit on rental income  as the holiday season in Mojacar is quite short.   Also the golf result you are talking about is a good 20 minute drive from the sea (thats what it took me anyway - the roads out to it were awful).  I spoke to one estate agent about properties there a couple years ago and he felt that rental values were very poor there.  His opinion was most people prefered to be in Mojacar or Guaracha and travel out to a golf course  rather than stay at a golf course and travel out for everything else.  He found it difficult to let properties on Valle del este. 

Having said that the price you have quoted seams very good - but if you can't let it and arn't going to use it personally but only looking for an increase in value of the property then I think you must have a very positive view of how the Spanish property market is going to go.

Apologies for saying this yet again.

.  Legally letting is very difficult, legal permission necessary and the property must not be in a block, urbanisation etc where letting is permitted in the community rules,   and then as a non resident you should pay 24% tax on the gross income, no allowances for anything (electric, water, wear and tear etc. Nothing). Residents fair better.

It is also possible you would need to pay IVA on the rents and that means declaring it each time you collect a rent.  Say 12 times a year on a monthly rent, 52 on a weekly let.

All in all,  not worth it unless you think, like so many people have done over the years, that you will get away without being legal.  Up to you but Spain needs tax income more now than ever.

Having been there, done etc I would not do it again.

Also,  as the Spanish currency whatever it will be, will most probably be devalued against the pound, the chance of making a capital gain (especially after tax) is most unlikely in the foreseeable future.

 We don't let our current place at all - and we would not be wanting to let another house.  The reason for buying a second home is simply that if we can get it cheaply enough it would make a fantastic place to live either for ourselves or for our sons.  At the moment we have a two bed two bath apartment of about 70 square mts - and I don't think we could live in that space.  It has been a fantastic holiday home, but we need something bigger if we are going to live there.  We are into BtL in the UK, and would probably add our family home to that portfolio if we move over lock stock and barrel.  I just think that at the prices being quoted, it would be difficult to lose - but I am willing to be persuaded otherwise.  I have no confidence in a return of the ENGLISH property market outside of London, so certainly have no illusions about Spain!!!    The comments about where these particular properties are are very helpful.  We have never looked at golf resorts so I only know vaguely where it is.  We have indeed been looking at Garrucha and Mojacar and there are fantastic properties there as well, but generally not as good value or spacious.  So, to sum up, it would be 50 or 60 K just to sit on - much like investments in the UK generally!!!  No capital gain expected and no rentals wanted!! 

I did take a look at some of the deals available in the resort following your posting. Like you I do not have much faith in a UK property market rebound in the near term. My questions would be as follows:

1) Do they have habitacion certificates? If yes good.

2) What are the community fees and what are the debtors. Obligations for golf course maintenance?

3) Do they come with builders mortgage? Mortgage in Euros good!

If you satisfy all three then sounds a good deal

Guy

 Thanks Guy - point 2 really good.  We need to know how much is outstanding on the community fees.  We were thinking of putting in a cash offer and therefore taking a bit more off the price or at least trying to get it down - what do you think?  

 Hi Bri

Have a look at properties in Palomares as well - they are closer to the coast in a lovely village with some nice shops - they tend to be a bit cheaper than Mojacar.  I know there are some duplexs for sale on the Hacienda De Marquis complex (they were for sale a few months ago so I would imagine they still are).  If you do not want the golf course then be careful that the community fees arn't excesive for your needs.

The price you were quoted looks very good but no one knows which way property prices are going - you don't really know whether they are going to go up until they start to it is almost imposible to know when the market is right at the bottom.  My personal opinion is that you have 2 markets in Spain at the moment - the price that people are preparing to accept for the sale of a property and the price someone is prepared to pay - there is at the moment a big difference so no one is buying.  Where people are having to sell and are putting the prices down well below the average asking price then you can buy a property which will probably still be good value in a few years time.  The property you are talking about maybe one of these.

The other thing you have to consider is which way the sterling to euro rate is going to go - and will Spain stay in the Euro.  

Bri, even if you have the cash, a Euro mortgage provides a better safeguard. Twelve month Euribor is around 1.98 percent at present and mortgages are priced typically at that plus 1.25 percent.  Better to keep your cash in the UK and speculate on the Euro. A mortgage advisor laughed at me three years ago when I speculated the Euro would crash. Needless to say we took a Euro mortgage for maximum possible.

Guy

** EDITED - Suspected spam **

 Thanks Nigela - I do like Palomares but these properties are very small.  We already have a 70 sq mt   apartment, and it is the size we want to improve on OR a really good site on Mojacar Playa.  

Bri - not sure my last post got through as using Internet in aircraft.

Repeating:

best reason for NOT buying at the moment ---- better bargargins will be available later in 2012.

David

 Yes, that is what stops me rushing in!!!!     

Brian, I think the answer may be in this thread: http://www.eyeonspain.com/forums/posts-long-12385.aspx

Community debts is a growing problem and one that is only likely to get worse

 Yes, and I have to be honest, buying on a community is the thing we thought we would not do again.  Our community is lovely, and well kept and at the moment the debt is manageable (though unfair of course with non payers using the facilities etc etc), but our starting point for a second purchase was to find something not on a community at all, or in a Spanish community.  It is just that the prices on some of these places are so very tempting!   On the playa in Mojacar for example, we have not found anything to compare with the Valle del Este properties which jolted me into starting this thread.   Following info from the threads active at the moment, I have dipped a bit more seriously into other regions, and these very reduced properties are available just about everywhere.  I wonder if I should be looking at Madrid.......................?????

On the general theme of community charges, we bought in Spain having sold in the USA - and they deal with debtors very efficiently as far as I could see over there.  Community fees were extremely high - but you got a lot for your money.

Agree with Bri re value for money for community fees in USA. We had a house in Florida and the whole community was immaculate and just about perfect. I often look at our urb (and surrounding areas) and compare it with Florida and wonder why it seems impossible to do the same in Spain, then have to go and have a lie down in a darkened room it's so depressing.  Still I guess you pays your money and you takes your chance and hopefully learn by any mistakes. In fact if I were younger and looking for a holiday home/investment I would be looking at Florida now but certainly not Spain.

Poppy

Agree partially with you however the flights to the US are so expensive and the local taxes are very high in comparison ie ONGOING OWNERSHIP

Flights can be 500 pounds each and will get more expensive as the worlds fuel resources diminish most families have to save for 2 to 3 years for a holiday in florida and the parks are a rip off

You can fly to spain in 2 hrs and the daily weather on the costa del sol has not dropped below 18 all winter

BASICALLY UNREGULATED AGENTS LAWYERS AND BANKS HAVE RUINED SPAIN

The US MARKET is very REGULATED so it wont and hasnt had such LARGE PROBLEMS as SPAIN

But in 10 years it will all be very different MUCH BETTER

MY MONEY is stiil on SPAIN particulary the SOUTH its UNIQUE in EUROPE

Rod

 The reasons you give are generally the reasons we sold up in the US (just in time!!).  Still love Spain.   

"....compare it with Florida and wonder why it seems impossible to do the same in Spain...."

This statement could probably be attached to so many contexts. However, it's futile even trying to compare two such utterly different cultures and mentalities. If I was younger, richer and more importantly could have secured a Green Card when I was there (not Florida specifically) I would never have ever come to Spain in the first place. If the politics and cost of health care don't get you down (as they seem to for the few Americans I know here) and the option is available to you, i can't think of one single reason to choose Spain over the US. Holidays are another matter and I appreciate the travel time is important, but I would never own a holiday home in another country anyway - too much worry.

Brian, you said you hoped to "find something not on a community at all, or in a Spanish community" - I wonder why you think a "Spanish" community would be any different from, what, a 100% foreign owned community? If there was even such a choice, I'd go for a German community with a ban on kids.

There - I said it - now shoot me!

 I think I just mean not a community at all really.  So a very small development or something in a village?  Something like that.  Why?  Because I have spent too long learning Spanish to let it go by never using it, and the fees are much lower or none existent.

Hi, we have a place currently on a golf resort and are having a house built in the mountains for various reasons:

1. You get a lot more for your money.

2. you get to experience the "real Spain". Being on a golf course is ok, but you never really get any exposure to Spain. It's like another are of the UK (but with more sun).

3. Golf resorts are generally deadly quite much of the year. Sounds nice and peaceful can can be a total lack of soul after a while.

4. The earlier reply on rntal was a good one. We could let our place out in August 10 times over but try to let Nov-Jun and you'll be lucky to get the odd rental. Then you hav eto factor in spanish tax @ 24% and wear and tear, problem rentals and running costs. The aircon doesn't have to be left on long before the profit is blown away.

Good luck whatever you decide.

Carl