New investestment in Murcia

Hi there,

I'm a new member for this forum and wondering if you can help/share some views/ideas about my new investment plan in Spain.

Recently I have reserved a unit in Santa Ana, Jumilla via S.I.S (Smart Investor Services). I haven't made the visist to the development yet but planning to do that soon.

Has anyone done this before via S.I.S and what sort of experience have you gone through?

Thank you very much in advance!

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Hi Sosel,

Have i got this right?,you have bought a property without visiting either the showhome,builder or the development!!!!!!!!!!!!!

Regards

Georgia

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HI sosel

Welcome to Eye on Spain.  We have many Santa Ana buyers on the site.  You can chat with them but you need to sign up for the message board first at

www.eyeonspain.com/ViewDevNo.aspx?dev=R183

Justin

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Thanks for the reply Geogia!

I have just reserved it buy havent bought the property yet.

I will visit them soon then only I have to decide whether I go for it OR not.

I havent committed for any purchase.

Can you please tell me what should I concentrate or look for when I go there?

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Hi sosel,

Very glad to hear that you have not jumped in.

In the early days there was a constant trail of people continually heading up to Jumilla as the prices were and still are to a point very attractive.

The San jose development at Santa Ana is a very large project with originally over 10,000 properties planned.

The issue i have always had with the development is licence,they do not have licence for the whole project and have only recently gained licence for the first phases.

The project was initially planned to have facilities to support a new town ie police station,equestrian centre,sports facilities etc etc....

My issue is if they do not have licence for all the project then will they need to supply the ameneties or will you get left with what is in essence a large urbanisation full of expats on the side of a mountain an hour's drive from the coast,as the majority have people have bought there with rental income in mind will this dissapear?

Take into consideration some of San jose's other developments;Albatera,stopped no licence El Pinet construction held up for licence application etc..etc...

Don't get me wrong Jumilla is a lovely area and a fantastic part of Spain just be very careful where or who you choose to buy from.

I think there are many members of the forum that have bought there in the early days and may know of new progress,but in my humble opinion there is cheap and there is a good investment and very rarely are the two the same!!!

Think of your exit strategy,with that many properties will it be easy to sell on in the future and i would imagine as the first phase completes a good numbers of investors would be looking to flip their investments thus flooding the market,with the numbers of buyers decreasing you could be left holding the baby!!!!! to coin a phrase.

This is only my humble opinion but experience tells me that if you are speculating on investment you may wish to tread a different path.

Regards

Georgia

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Much appriciate your views on this.

I accept your opinion that there is cheap and there is a good investment and very rarely are the two the same!!!

As a new investor I'm very much concerned about the deal. Its an off plan project and property shall be ready in Sept. 2009 according to S.I.S

Is that true the property value increases by 15% every year in Spain? If I deposit for one of the off plan property is it possible to get the depost back when its ready in 2 years time by mortgaging them?

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Hi Sosel,

If you were told that "property rises by 15% every year in Spain" by an Agent then you should very calmly put the phone down or walk out of the office because this is a bare faced lie and a hook to get you to invest!!!!!!!!!!!!!!!!

Every person has a little green monster called greed buried somewhere in their sub conscious and unscrupoluus peole can find it with ease.

As a new member i do not know whether you are aware that i am an agent and unlike some like to think i give honest advice.

The second statement could be true given a decent rise in property prices if when the property is complete it will be at a higher mortgagable value then when you paid your deposit,again property prices must rise by 15% per year over the next 2 years,beleive me it's not going to happen.

The second problem i would have would be the completion date,i know for a fact that the Santa Ana project is a long way behind schedule because they originally sold without any licence  and had to wait for clearance and permission before building commenced.I would have to know the fase that you are looking to purchase on to give a clearer answer on completion dates.

You have not been told the truth!!!!!!!!

I would not like to see you back on this forum in 3 months time with a story of woe regarding purchasing investment in Spain,there are still some good deals around but you have to be very careful.!!!!!!!!!!

In my opinion property prices will continue to remain at this level for the next  year at least,there is no quick turnaround or short term capital gain to be had here at the moment,look for quality and mid to long term investment and you may be rewarded in time.

15% a year my arse!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Hope this helps

Georgia

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I'm also looking to invest here and will be travelling out in a few weeks time.

I'm now worried about licences as mentioned by Georgia.

I've used a company called Property investment portfolios who are guaranteeing a rental rate of 6.8% to cover all costs. Has anyone used these?

I think they are offering a similar deal to S.I.S 15% growth (Id on't believe this will be sustainable year on year though) and a property called the Malva.

Mickyl

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Hi Micky,

WOW!! Guaranteed rental!!! there is no such thing! ask anyone on this forum who is advertising their property for rent.

I have not heard of the Malva is a new model?i did pride myself on knowing most of the newbuild properties by name.

Murcia is a up and coming area but on what are they basing there prices and rises,if it's worth x now and it is not built how will it be worth y next year when it is not built?

The true value will be worked out the day it is completed and a true bank valuation given for mortgage purposes.

In 18 years i have heard them all time and time again.

Murcia (Región de)

1,061.7

1,115.1

1,192.1

1,246.8

1,241.8

1,326.2

1,344.9

1,392.0

1,402.0

1,441.7

1,456.6

1,496.4

2.7

7.5

These are official government figures for the last 3 years from the housing ministry,the last figure of 7.5% shows the increase in prices for the year 2006 and things have slowed slightly since then.

When i have investors the first thing i ask for is licence and permissions,if they cant produce these there and then walk away,the second thing is exit strategy(who will buy it when you want to move it on)

Trust your first instinct and impression and then let someone with a few more scruples than these guys give you sound advice.

Hope this helps

Georgia

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Thanks Guys!

Very good interesting facts here by Geogia, I need to clarify with S.I.S

Entry point and Exit point is very important here !!!!!

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If only there were more agents like Georgia around....

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I totally agree with Georgia, from an investment point of view you really need to understand your exit strategy, if you are looking for short term growth than Spain really isn't the place for you.

However if you have a long term strategy than Spain has a lot more going for it than it's competitors in the emerging countries.

These jokers are out of their minds quoting 15% rises and when Rental guarantees are usually included it means that they are actually absorbed in the price of the unit.  It's a trick that all developers use, even in the UK.

My advice would be to visit different areas and do the research yourself before coming out and speaking to local agents in your specific area.  These are the people who really know what is happening in their patch.

I personally, are off to mystery shop these clowns this weekend at a property investor show at Excel, the problem is people are time poor and cash rich and these clowns are salespeople on targets at the end of the day, and will tell you just about anything to get you to sign on the dotted line.

I cannot emphasis enough RESEARCH RESEARCH RESEARCH and great forums like this!!!!!!!

I'll let you know what dribble they came out with!!!!!!

Good Luck

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Thanks for the view on this S.J

Welcome for inputs

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Hi Sosel - I bought at Playa Golf II via SIS and can assure you that their projections are pure fantasy! 

They assured me that my mortgage payments would be easily covered by rental income - implying that I could achieve 20 - 40 weeks rental per year -  and they introduced me to a property management company who have managed to secure me ONE week since last November!  I have managed to obtain a few weeks more rental through my own efforts but anyone on this forum will tell you that you will not be able to cover your costs through rent. 

I have also found that SIS were very attentive up to the point of completion and now they will not even answer my phone calls or emails.  They paid my first year's mortgage which softened the blow a little but I would have risked losing the house altogether if I had depended on their projections of rental income.  They also underplay the actual costs of setting up your house for rental as you need to factor in their furniture pack - they charged me 10,500 euros - as well as air conditioning and security which is vital if you are going to rent out your property. 

Having said all that, the villa (an Azucena) is wonderful and my plan is to move out there permanently next year.  I would take the advice given by all the others and have a good look around before you buy. 

Good luck! 

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Hi All

Just to echo what Georgia and the others have already said. I have said it before and can only strongly advise that if you are in for the long haul then that's fine. JUST DO NOT RELY ON RENTAL INCOME!!!  The days of flipping properties on completion are long gone and I think that many are realising this. The market here for flipping stopped about 2 years ago and as we lost the investors and the first time buyers could no longer afford to get on the property market of course it snowballed which has affected the UK market drastically.

Another important thing to think seriously about is Golf investment. We were talking about it in work today funnily enough and as there are many comlexes around then supply is going to outweigh demand. My colleagues go on golf holidays a lot and there are so many all in packages available now to include flights, hotels and a selection of different courses to play all in then obviously this is a cheaper option for golfers than booking separate accomodation, flights, car hire, food etc.... Not that I want to put people off golf complexes as we rented there when our proprty was being built. If it's what you want for your own use, great, but if it's for rental then think carefully. Just a thought, not only golfing so please don't think I am knocking the developments, just tread carefully.

But most of all ENJOY!! We are, can't wait to get back over.............

 

 

 

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Hi All,

Sosel-If an agent has already lied to you regarding facts and figures then in my opinion you would be wise to walk away,one lie generally leads to another and as Claire T has posted a testament to the fact, you would be wise to heed the warning.

Don't forget i am not trying to put you off investment for the long term what i am trying to say is keep your eyes wide open,do not try to get people to tell you what you want to hear and use someone recomended with a proven track record.

Justin-Thanks,i do try and break the stereotype when i can.

Costa-Almeria-Nice to hear of someone with a smilar opinion,i take it you work within the industry? i do hope so as you make a lot of sense.

I had the chance to attend the Excel show myself,i was invited by a chairman of a plc company trying to break into this market to give opinion on the way he is approaching things,fortunately i am very busy at the moment and also it clashes with my daughters birthday.

Please let us know how it went,like you say at £65,000 for a stand they will tell you black is white to recoup thier costs.

I do tend to get myself into a bit of bother with my comments as they are frowned on by some agents and have been excluded from the "click" but there membership is shrinking as they get found out and dissapear.

There is still good investment in Spain but it is lifestyle and long term,a good investor will want at least 6% return and that is only possible at the moment on a few select developments,15% capital gain for the near future is not going to happen and is pure speculation.

Right back to work,you wouldn't think i actually sell for a living would you,who wants to buy a great investment? 20% capital gain! 8% yield and guaranteed 54 weeks a year occupancy! any takers?

Hope this helps

Georgia

 

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Good recap of every ones ideas here,, Georgia!

Thanks for everyone taking the time and putting their view on this

I understood that its not worth of investing for short term unless I want to move to Spain later OR long term investment.

I'm not planning to move or any long term commitment here...

15% incease onnpropert value, guranteed completion date and rental income afterwards are complete nonsense. I have alraedy asked S.I.S also send an email to clarify these. Still wainting a proper reply from them.

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Hi all,

I've read many interesting posts on this forum concerning the Santa Ana del Monte development and feel that its worth adding to the debate based on my own experiences.

I have also reserved a plot on SA, Jumilla, for investment reasons, with the main driving force being what I call "scarcity value". Jumilla is a wine producing region, meaning that locals' livelihoods are in the vineyards. This means that large developments such as SA are not going to appear in quick successon as this would mark a quick end to the town's indigenous industry and thus mass unemployment. By limiting the number of developments in an area, you are shortening supply and thus increasing attractiveness, meaning that the guaranteed rental scheme has more chance of working as compared to coastal resorts flooded with complexes. Combining this with the new transport links that are in plan for Jumilla, this is an added attraction to the scarcity value already described.

The new transport links are interesting as this is also invesment, albeit on a governmental level. Governments only invest in projects if they see value with potential for ROI. Therefore, those investing in SA are putting their eggs in the same basket as the Spanish government, who themselves will not have made a rash decision to invest in a new railway / airport.

So, the points I have just described should act as a reassurance for the rental scheme. I would be grateful to hear others' thoughts and engage in some constructive debate on this.

Another point which has come up on other threads concerns the bank guarantee. For everyones reference, I have been emailed a copy of the bank guarantee from a "Sociedad de Guarantia Reciproca de la Cominidad Valencia"

Kamil

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