Hello,
I've always had the idea in the back of my mind to make a small investment in the Sun and on my last few visits the idea grew to the point that I have placed a reservation fee on an Apart-Hotel type development.
I'm now feverously researching before I reach the point of no return, should probably have done this before parting with cash, but I work better when the pressure is on !!!
1) Guaranteed Rental, sketchy details provided at present as development is 2 years from completion – therefore I would be interested to hear of real experiences of these schemes – what are community fees have you incurred, as it’s a Hotel based development there will be service charges for cleaning / laundry I expect etc etc
I’m informed that GR will be between 3-5 %, quick search came up with schemes with 3-4% but no real details; the non-binding information for illustration purposes received for this development show 3% return at around 10K and annual costs of around 9K which are paid for by the Management Company; the resultant balance is not sufficient to pay the mortgage, but I’m happy with this arrangement – my main purpose is to provide regular holidays in what will become familiar surroundings for my family complete with new baby; the days of long haul holidays curtailed by the new addition for a few years !
Information on the Tax position would be appreciated, what are allowable expenses outwith the annual upkeep costs, are mortgage payments considered an allowable expense ?
What cash flow implications are to be expected in such schemes; are returns to be expected monthly, quarterly, annually ? an example I uncovered had payments to owners due quarterly but paid 60 days later, essentially I would need to finance 5 full months before receiving any cash towards my expenses, am I to expect this as normal ?
Is there anywhere I can find an example contract to review for a scheme like this ?
2) Property prices - I’m not concerned that the market has slowed as I’m looking at a longer term investment – but for a 5* class 2 bed apart-hotel type unit in the Marbella area with extensive onsite amenities, what is the current cost per square meter value market value for such properties – must say that there appear to be loads of properties for sale with varying prices and without visiting each I cant really reconcile the properties against the one I’m interested in.
Any comments would be appreciated.