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Best investment area to buy?

Posted: Mon Aug 22, 2022 5:46pm
20 replies834 views11 members subscribed
Gizmo

Posts: 6

Location: Torrevieja

Joined: 22 Aug 2022

Hi all,

I'm new to this forum so firstly thank you for reading my post :-) Fingers crossed I get some advice back ;-)

We are looking to purchase a property as investment and also for later in the year use to holiday (too hot for me in the summer..). 

Ideally we are looking for somewhere within walking distance of a beach and local amenities to maximise the rental opportunity available. We will be renting the property out during the high season.

We have been in torrevieja about 10 years ago and liked it there but my question is. Does anyone have recommendations for where we should look to maximise the oppertunity. Would you go with la Mata or another area etc...... 

I would really appreciate any help on this so any advise would be fantastic.

thank you all

Tony

Relyat

Posted: Mon Aug 22, 2022 7:46pm

Relyat

Very helpful member

Posts: 894

889 helpful points

Location: Pego

Joined: 12 Jul 2018

Posted: Mon Aug 22, 2022 7:46pm

Do not consider any dwelling in any area in Spain as an investment. 

Buy somewhere to live in or use as holiday accommodation and when the time comes to sell it,  consider yourself lucky if you get your money back. 

Swimmer57

Posted: Mon Aug 22, 2022 8:30pm

Swimmer57

Helpful member

Posts: 253

160 helpful points

Location: Gandia

Joined: 30 Aug 2020

Posted: Mon Aug 22, 2022 8:30pm

There are loads of threads on here discussing the lengthy, complicated and bureaucratic processes involved in getting a tourist licence- which you will need to be able to do holiday letting. Have a look at them before you decide whether you want to go down this route.

Gizmo

Posted: Mon Aug 22, 2022 9:13pm

Gizmo

Original Poster

Posts: 6

Location: Torrevieja

Joined: 22 Aug 2022

Posted: Mon Aug 22, 2022 9:13pm

Relyat wrote on Mon Aug 22, 2022 7:46pm:

Do not consider any dwelling in any area in Spain as an investment. 

Buy somewhere to live in or use as holiday accommodation and when the time comes to sell it,  consider yourself lucky if you get your money back. 

Thanks for replying. The plan is eventually to move over so this would be just to rent out for now. We would holiday the odd time but probably in the off season. 

Why do you say dont use Spain for investment?? Really curious now.

thanks

Gizmo

Posted: Mon Aug 22, 2022 9:42pm

Gizmo

Original Poster

Posts: 6

Location: Torrevieja

Joined: 22 Aug 2022

Posted: Mon Aug 22, 2022 9:42pm

Swimmer57 wrote on Mon Aug 22, 2022 8:30pm:

There are loads of threads on here discussing the lengthy, complicated and bureaucratic processes involved in getting a tourist licence- which you will need to be able to do holiday letting. Have a look at them before you decide whether you want to go down this route.

Thanks Swimmer, Yeah i have read all these. Im hoping to purchase one with a tourist licence already in place.

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Relyat

Posted: Tue Aug 23, 2022 10:12am

Relyat

Very helpful member

Posts: 894

889 helpful points

Location: Pego

Joined: 12 Jul 2018

Posted: Tue Aug 23, 2022 10:12am

Gizmo wrote on Mon Aug 22, 2022 9:13pm:

Thanks for replying. The plan is eventually to move over so this would be just to rent out for now. We would holiday the odd time but probably in the off season. 

Why do you say dont use Spain for investment?? Really curious now.

thanks

Spain is a lovely country and has been a holiday and retirement destination for decades. 

Do you remember the financial crisis of 2008? Many here do and still haven't recovered. I know people who say that what their house would sell for now is less than they paid for it,  it straight cash terms,  nearly 20 years ago. They aren't unusual. 

There was an unsustainable gold rush of building new dwellings,  in the background were new roads built with EU money.  These were there to encourage companies to relocate to Spain.  Look around and you will easily find the pre prepared industrial estates,  never completed,  or the completed ones never occupied.  The same applies to dwellings,  countless around the country waiting to be finished and occupied. The companies never came and neither did the employees. 

Look at the unemployment rate in Spain.  Can these people afford to buy a house?  Who starts this so called "property ladder"  if not them. 

Then there are the on costs of buying and selling which makes resale and buying again an unattractive option,  financially. 

There is a vast oversupply of housing stock,  new,  part finished,  second hand,  privately owned and bank repossession.  Yes,  some are selling estate agents will always tell you that. 

But the pool of immigrant buyers will diminish with fewer British meeting the criteria to move here and the other nations don't have a suddenly increased birth rate to replace them. 

There is a lot to this.  Many people have a vested interest in persuading you that now is the time to buy or you will lose out,  estate agents,  builders,  vendors. This isn't Britain and things don't work the same way. 

Buy a dwelling here and rent it out if you can.  Enjoy your holidays here and possibly look forward to your retirement here, but don't consider it an investment. 

My thoughts and others might disagree,  but it's your choice.  Make sure you do your research. 

Kimmy11

Posted: Tue Aug 23, 2022 12:52pm

Kimmy11

Legendary helpful member

Posts: 6861

12546 helpful points

Joined: 8 Aug 2017

Posted: Tue Aug 23, 2022 12:52pm

Hi Gizmo and welcome to the forum!

Property in Spain doesn't appreciate at the same rate as we're used to seeing in the UK.  Also, the costs associated with buying and selling Spanish property are high.  For example, property purchase tax ("ITP") at 10% of the purchase price, plus legal fees, such as lawyer, notary, land registry and disbursements, will likely add around 14% of the property purchase value to your total costs.  So if you buy a property for, say, €150,000 that's around another €21,000 to pay in tax and costs.  Also, if you get what you think is a good deal on a property, be aware that the Spanish tax authorities have something called "Complementary Tax", which allows the Agencia Tributaria to tax you on the difference between how much you paid for a property and what they believe is its true market value.  In addition to online research, I would highly recommend visiting areas you like at different times during the year.  If you decide you didn't get it right the first time around, it's also expensive to sell in Spain, with agents' fees starting at 3% of the selling price, but more typically they're around 5% - 6%.

I'm sorry if this sounds somewhat negative, but forewarned is forearmed!  I've lived in Spain for almost 7 years and don't regret a moment of it, but many things are quite different to what we're used to in the UK.  Good luck with your search.

Kind regards,

Kim

Gizmo

Posted: Tue Aug 23, 2022 5:57pm

Gizmo

Original Poster

Posts: 6

Location: Torrevieja

Joined: 22 Aug 2022

Posted: Tue Aug 23, 2022 5:57pm

Thanks folks for the input this is really great advise. I suppose for us really its the rental opportunity and maybe long term investment and we may not ever sell it.

With regards rental I know it will very but do any of you rent out your place and how many weeks a year would you be relatively confident to have your house booked?

This I hope will give me a good idea on whether or not to proceed.

many many thanks

Tony

Kimmy11

Posted: Tue Aug 23, 2022 6:12pm

Kimmy11

Legendary helpful member

Posts: 6861

12546 helpful points

Joined: 8 Aug 2017

Posted: Tue Aug 23, 2022 6:12pm

Hi Tony,

We have a member, DaveBev1, who is very knowledgeable about the Tourist Licence and has written a guide about the end to end process in the 'Spain Tips and Guides' section at the top of the page.  I'm sure she would be happy to help, if you send her a Private Message.

Kind regards, 

Kim

Aspen1992

Posted: Tue Aug 23, 2022 9:51pm

Aspen1992

Helpful member

Posts: 367

319 helpful points

Location: Villamartin

Joined: 16 May 2020

Posted: Tue Aug 23, 2022 9:51pm

Gizmo wrote on Tue Aug 23, 2022 5:57pm:

Thanks folks for the input this is really great advise. I suppose for us really its the rental opportunity and maybe long term investment and we may not ever sell it.

With regards rental I know it will very but do any of you rent out your place and how many weeks a year would you be relatively confident to have your house booked?...

...

This I hope will give me a good idea on whether or not to proceed.

many many thanks

Tony

Hi Tony

I would simply say put your cash into a property in the UK and rent that out alot easier and more manageable...!!

The tax implications are dont quote me but I think 24% with no deductions this needs paying every 3 months and trust me your property is going to need maintenance regularly plus it needs to out do the rest as in quality or your going into a pool of many, the running costs will outway the money you receive, basically I have been there and done it got the T-Shirt keep ya money in the Uk. You need to be in prime position and have a very nice property even then to get 14 weeks a year your going to do well dont listen to all the bullshit estate agents telling you 20 weeks plus always work on worst scenario🙄.

Hope this helps I could say yeh spend ya lot but it really isn't an investment in Spain anymore its a place to holiday and forget the money your spending and hopefully get a small return when you cant go anymore...!!

Regards

Andrew

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