Hallo

I bought a two bed unit November 2006 and am due to pay the second deposit instalment this November.  Since I don't want to throw good money after bad I would be grateful for an indication as to whether these units are holding their value or whether I should flip?

Hi Mercedes,  When you say they have increased in value by 40.000, do you mean that the developer is asking 40.000 more for the same style unit or that resales have risen by this amount?  What is your view on rental - do you think the developers estimated rental return is  realistic or will you play it safe and take a guaranteed rental return.  I can't make up my mind, although my original intention was to make some personal use of it.

Are you and you brother Spanish or at least part Spanish - it would be interesting to know what the local consensus of opinion might be on the general state of the Andalusian/Granada property market and where it might be heading.

Hi,Riccers.Regarding your latest posting I am english and have visited Medina many times,on my last visit i went into peninsulas office and asked if therr were any  appartment for sale on fairways the same as mine i was quoted 40.000 euros more than i paid for mine i paid 295.000 euro,  i presume this was a resale as i was told months ago that all garden app had been sold,so i think either people or the builders are trying to sell at a profit now( they usually keep some back).I think I am going to do a varied rental as i intend to use it myself but it  depends on peoples own circumstances.I do think the developers estimated rentals are reasonable as it is a five star complex.

Any body else out there with any views or latest photos.

Hi all,

New to the postings - but brought on Media 23 in March 06,

I visited the development in Mid Sept this year took some photos, so if I find how to load them I will do, but I can tell you Fairways has not started any construction as yet, just ground leveling in front of Medina 23. The refurbishment of the Hotel has yet to start, some building materials are near by, the golf course is open as most will know and was in use when I visited, the Suites development is well advanced as is the proper golf club house next to it, the one on the golf course being temp, the international school building is also well into construction, tee 17 is at foundation type construction.

I also picked up all the current price lists and have been comparing them with earlier price lists from the developers. Fairways currently has about 16 properties for sale from Peninsula, since Feb 06 the price of one of the 2 bed 2 bath units from the developer has gone from 294k to 350k euros on their price list (same plot number). I have also seen 4 resale properties on another property web site and they are advertised at about 20% above the Feb 06 price list for those plots.

Remember when comparing details, that some of the developments are from Grupo Balbao, they have a website at www.medinaelvira.comand these tend to come with Golf Club membership included (current value 12k euros - not sure if thats p.a., but possibly so) the Peninsula developments don't come with Golf membership - which is confusing because Peninsula also market some of the Balbao developments, - for instance the Suites and the Elvira Villas and Carmenes (I'm 90% sure that Eden Golf is the same)

Also for those new to this development, the rental arrangement is with a company called Royal Peninsula, nothing to do with Peninsula Project Management.

anyway hope that helps someone -

I was wondering if anyone bought their medina golf apartment through International Property World and whether you were happy with them.  I don't seem to be able to get my inspection trip refund from them, although I paid the first 10% of the purchase price about 7 months ago.  They keep promising they will transfer the money but nothing is happening.

Regarding the rental schemes,  I don't know whether you have already received the draft contracts from Royal Peninsula.  There seems to be a few changes from what I understood at the beginning.  First, their agency fees seem to have gone down to euro 1100 per year instead of 2100.  Second, the guaranteed rental seems to be 5% net instead of gross, which suits me.  But on the other hand I had understood that on the guaranteed rental basis, they would be responsible for the cost of maintaining the properties for the duration of the contracts.  I took this to be repairs, re-decorating etc.  This is not the case.  Owners will have to pick up the bill for these jobs.  I am waiting for replies to some enquiries I have made and will post them once I get a reply from them.

I have also received a list of the items included in the furniture package.  These amount to just under 11,000 euros for the variable rental properties, a bit more for the guaranteed rental as they need extra bedding, crockery etc.

Hi Sabber,

Bought through Property Show Rooms.

I contacted Peninsular (H.O.Spain) a couple of weeks ago requesting that someone from Royal Peninsular contact me to discuss at length the two rental options, details of the Management Contracts and Fairways current sales list.

Having not heard I followed it up with  Peninsula's UK and have since received a PDF sales list and PDF Summary of the Royal Peninsula's Management Service.

Guaranteed Rental Yield Programme:

As regards fees ,I quote from Royal Peninsular  ‘The Annual Affiliates fee for 2005 is €1.700 increasing to €2.100 by 2006. For Royal Peninsula affiliates, these fees will be discounted to €1.100, and this discounted price will be valid until 2009.’

As regards maintenance, 'That means that Royal Peninsula takes care of your property, all the maintenance and guarantees you a hassle-free 5% yield, index-linked to the Spanish CPI (Consumer Price Index).'  This would infer that the 5% is net of all maintenance and one would assume insurances and other cost, however, it does not state explicitly that this is the case!

If you are correct and this does not also include repairs and decorating, then this could severely whittle down the 5% yield, particularly since this is a Five Star resort and standards have to be maintained.  (ie Planned maintenance programmed of redecoration every two years or less.)

Variable Rental Yield Programme:

Assuming the worst case scenario above, this option now becomes a whole load more appealing.  To begin with an anticipated rental return is 10% to 15 %, and then of course the added bonus of private use.  If the maintenance, repairs and decorating cost are to be past on to the owner and not taken out of Royal Peninsula's profit margin, it seem supremely sensible to take the higher rental return.

If you assume that Peninsular have done their market research properly and that there will be long term sustained demand for these units for holiday/leisure purposes, you can understand why they are happy to offer 5% rental guarantees.  Therefore, it does not seem unreasonable to also assume that 10% to 15% yields will be achievable in the Open Market.  I wonder whether anyone has done any private research or has any expertise on rental returns for this type of property and location - unlikely  I know, since it is supposed to be unique (for it's location).

The last point is what are the management fees for this service, are they the same as for the Guaranteed scheme? I cant see how they can be, more likely I would have thought, to be in the order of 12 to 15% of rental, does anyone know?

Deepriver,

Peninsular inform me that Grupo Balbao are building Medina Golf under license and on behalf of Peninsular, but the other developments are their own - so it looks like its anyones guess.

The sales list I was provided with has 20 units for sale.  All of which I understand to be resales, although over the phone I was told that there are a couple of large 1 bed units that have not as yet been sold.    I also assume that a number of agents/investors will also be flipping additional units, I guess the trick is not to over supply.  I find it almost impossible to get any meaningful information, since some of the agents are offering (boasting) resales under developers asking price.  What does this mean?  Did they buy under market value (ie bulk purchase discount) or perhaps bur pre-off plan, or are they selling to get out - scarred of a price crash -  I don't know.

The developer assures me that asking price did not go up between the launch and September 2006 (when I bought), but can they be believed - again, I don't know.

On a like for like basis with my Penthouse, I would be looking at a 12.5% growth.

If anyone knows more please share.

Hi Riccers,

The information I have is the latest available, as it was sent to me directly by Royal Peninsula a couple of days ago and is aimed especially for the buyers of Medina 23, which is coming to completion. My apartments won't be ready until 2009 so I am not in a great rush, but I have been pressing on for information in any event.  I have received draft pre-contracts for both rental schemes.  Basically, on the variable rentals, the annual fee they take is the same as in guaranteed rentals, ie 1,100 euros.  On top of this, they will take 30% of any rental they generate to cover cleaning and laundry costs.  However, you are also free to market your property independently or offer it to friends and family as well as using it yourself.  If you decide to do this, they will obviously not charge the 30% as such but will charge you a fee for the cleaning/laundry.  I was told a few weeks ago that this was not decided but could be around 80 euros for each stay.  Their bookings will have priority over yours, so you cannot offer your property to anyone if Peninsula already has made a reservation.

I am waiting for a couple of clarifications from them, as they say that there won't be a rental pool as most owners are not keen on the idea.  On the other hand, they say the overall income will be shared between all the apartments.  This is the bit I find confusing.  I will let you know when they reply.

The services they provide for the 1100 euros are slightly different between the two rental options. It looks as it is slightly more extensive on the variable rentals.

You are right, when you take into consideration the maintenance expenses the guaranteed option is not as attractive, but the point is whether the figures they are anticipating for the variable rental yields are realistic.  As you say, the development is quite unique and not easy to compare with others as regards to rentals.  I think it will depend a lot on their advertising strategy, which according to them will be top notch.  Hope they are right!!

Grupo Balboa is the main player here.  They are a large spanish business group who also owns several hotels in Spain.  They will be also running the on-site hotel (Cortijo Armengol).  They are promoting the Carmenes, the Villas, the Suites and a couple others but have chosen Peninsula to market them.  In a word, Peninsula PM are developing their own projects, ie Fairways, Medina Elvira 23 and I think Granada Green or Medina Golf (not sure about these two).  They are also marketing the projects of others, like Grupo Balboa or in my case Tee 17, which is being promoted by a company called Grupo Proadis but commercialised by Peninsula.  For some reason I get the impression that Peninsula tends to focus more on the overseas investor whereas Grupo Balboa concentrates more on the local buyer.  Don't trust me 100% on this, but this is the impression I get, as I see most british/irish buyers are buying into their developments.  Nothing wrong with them, by the way.   I think they have a good reputation in Spain.

I find this all very helpful thank you especially as I've bought in Medina 23 and still waiting for contracts on rental options.  Am concerned the area will be building site for years to come and will put people off renting so the fixed option looks more appealing in the short term even though all costs will not be covered.  I need to get an idea of what all the costs will be before making a decision though.  Photos are also very helpful to assess progress.  For what they're worth I will pass on my views when I get contracts and had a chance to review them.      

Hello all

I have just come back from Medina Elvira and have some photo's to share. I bought a place on Fairways in June 06. If you email me your addresses then I will send you the photo's.

JonnyForster@hotmail.co.uk

Cheers

Jonny

Folks

The most pressing problem for most on Medina now is is the rental agreement - and the fact it does not comply with the original adverts, and in fact probably does not comply with the current adverts.

We are suposed to sign up by 1st Dec 07 as to what we want  to do ref guaranteed or variable rental etetc 

- but

1) The draft we have been given does not include the index link of the 5% to the spanish CPI

2) The 5% rental payments on the guaranteed scheme to our bank accounts is now 6 monthly in arrears - instead of either fortnightly or monthly depending on which advert you were given, so you have to foot 6 months mortgage payments before getting anything back.

3) The maintenace fee was advertised as all encompasing, now it's worded that we have to pay for the wear and tear on the property - as other posts have noted this is a significant shift in cost responsibilty.

4) There are other minor changes that each of us have to consider if they are important - the key message is read what you have been sent and check it against what you were promised

as others - I will be taking this up with RoyalPeninsula - and you should consider if you need to do  the same - if it's not what you were given in the advertising material then complain about it and get it sorted - if we all do this then we can get the terms we were offered

As for having to sign up by the 1st Dec - .......Well OK ...... - give me a proposal that meets the original advertisements !!!!

- we own the rights to the properties as the purchasers, the management agent can't rent them with out us signing up - so - they need us (and of course... we need them) - but they need to meet the the original adverts and then we can sign up and move forward. 

On the plus side the properties seem to be going up in value -

Riccers,

I have the Feb 06 and the Sep 06 price lists, (one day I hope to get them valued on the antiques road show !!! LOL....)

unfortunately its not 100% clear if there was a price rise - as the properties listed on one are not the same as the other, as buyers drop out and others come in properties that are listed as sold on one price list appear as available on later ones.....and as Medina 23 moved fast in the first year comparison is not clear cut - but  from what I can see the prices on Medina 23 did not change from Feb to Sep 06 for similar apartments - so that bears out what the developer said to you.

They did change from Sept 06 to Sept 07, and fairways did as well, both up.....so good news on that item

Ponty,

I agree with you on guaranteed rental, I'll contact you privately

Deepriver - thanks for your update - to be honest I dont recall reading anywhere that the rent was to be indexed linked - I shall have another read and perhaps if I dont find it ,you might be able to send me a copy.  I have not as yet received the rental contracts, could this be because I haven't made my second payment - due end of this month.

I still haven't decided which rental option to take.  Is the maintenance fee payable on both rental options and has it changed for both or just the guaranteed option?

Is this rental contract not something our solicitors should become involved in - has anyone put it to them?

I will speak to Royal Peninsular for further answers - are people dealing with head office in Spain or the UK sales office - which is best?

Hello Deepriver.

Not knowing who you are makes it a little more difficult - hopefully you have now been in contact with us to clarify any points you may have.

We manage the properties and are not,  and never have been involved in Property Sales - I should imagine that there are is some possible confusion out there!

On one post the question was asked about involving lawyers:  a lot of clients from the various developments on M23 involved their lawyers from the day they put the deposit down.  We ve worked on the final contracts with many lawyers (each had their own query or suggestion) and the contracts are the result of that.

Again, any questions or queries you may have, please send them through and we ll go over them with you.

Best regards

Margaret

Oops - Just read my previous mail ' 5% yield, index-linked to the Spanish CPI ' - silly me.

Ive spoken to Royal Peninsular, who are very helpful and I'm sure will allay any fears that people may have.  The flexible rental scheme still appears to be far and away the best option:

1/ Initial rental returns will be much higher. 

2/ The potential for seasonal and annual rental growth.

3/ Personal use.

But is there demand? - my understanding is, that there is, but if you need convincing speak to Royal Peninsular.

Hello  Riccers

I might be more sceptical of the variable scheme in the short term - longer term probably yes, but for the first few years - debatable, but at least you have a choice :)

Margaret, welcome to the forum, your input will indeed help us

One thing you can perhaps help us with, we, and presumably many others,  have received a request to sign draft rental contracts by the 1st December, is this true? - it leaves little time to discuss the details, as this is the first time I have seen it.

I would agree, there may be confusion - but  the sales materials for Medina Elvira from various sources, including the builders, are full of Royal Peninsula documents and details of the guaranteed & variable rental schemes, each sale of a property is therefore linked to the rental agreement, as in most cases that was the only reason for buying. 

Deepriver

Hi everyone,

Has anyone got an update on the rental schemes? Did anyone sign the rental agreement and what were the terms in the end? Being paid 6 months in arrears must be a joke on behalf of Peninsula!

And does anyone have a start date for occupancy on Medina 23?

I have an apartment on Fairways.

Regards,

Jetdog

Jet

It was not clear if the rental contracts sent out before christmas were supposed to be signed or not, RoyalPeninsula (the lease management Co) said one thing in the letter and another when asked verbally, it was also unclear if this was supposed to be a pre agreement or the full agreement, either way the draft rental contract has issues with it and does not (in my opinion) meet the expectations of the initial advertising - hopefully everyone pointed this out to RP as I did and did not sign, however since then all has gone quiet from RoyalPeninsula!.

Maybe Margaret will rejoin this forum and provide an update ?? 

Peninsula Project Management (the developers) however have been busy and seemingly productive, they have set up an office in London to help arrange either new mortgages or the take over of the existing mortgage and are contacting all the owners who are going to be completing in the near future, M23 is currently being spoken about in terms of March, I'd expect that to be late March or April given where we are in the process.

Take over of the existing mortgage is offered at euribor plus 0.75% with 0.5% bank arrangement fee payable, 30yr max term and 5 yr max interest only option,and if you take the option or the transfer mortgage there is no stamp duty to pay under current rules.

The list of information required to support the application is pretty standard from what I've seen checking around, however they ask you to reply in 10 days which is a bit unreaslistic - I will post details of what they ask for during next week.

hope that helps

Deepriver

Thanks Deepriver. Do you know the maximum loan to value on their mortgage? And have any mortgage valuations been done on Medina 23 yet?

Jet

Jet

here are details of the existing transfer mortgage that is being made available along with details of the documents you have to submit. While its not in this note they did confirm the lender would lend up to 80% of current valuation. you can get an idea of current valuation from Peninsula site ref current prices lists and from some resales around on the open market.

rgds

Deepriver

Hello

Thanks for the posts it is an interesting read. Does anyone know when Fairways will be complete?

Thanks

Jonny