Whats The Real Rental?

I am new to all this and wondered whats the real rental one can expect. You here so much from these agents whats the truth I have been told by some friends you can only garentee 10 week per year. Also whats best offplan or resale anyone had much experiance.

 

Jase

This message was last edited by JeansSis on 5/17/2007.

Hi Janice

 

I am thinking of Mucia - Polaris world developments and also prob portugal. If I can get the rental I think it can stack up as an investment holiday home...

 

Jase 

This message was last edited by JeansSis on 5/17/2007.

Have you looked at the polaris world property forum? If you google it, it should come up - loads of info on there re all the polaris sites.

Its the rental bit I need some ffeedback on --

Hi Jasemma,

I am not a Spanish Estate Agent, but I am an Estate Agent in the UK. For what it's worth I can only out forward my opinion of the housing market as I see it. Over the last two years the market has slowed down as with escalating house prices the days of flipping properties on completion (buying property off plan and selling them at a good profit on completion) have gone. Also high prices have found that investors rental income is les than the mortgage payments, the first time buyers can't afford to get on the property ladder, hence the slow down. Having spoken to quite a lot of people who have worked in Spain as agents, the Spanish market has slowed too. My advice to you would be the same as I would advise over here, Do not rely on rental income. As a long term investment and holiday home you cannot beat Spain, we have just completed on a lovely apartment, which we will be using for ourselves, friends and family. I am not saying that you will be unable to rent it out successfully, I'm sure you will, just be prepared in case you have some months when it is vacant and "Just don't rely solely on rental to pay your mortgage." Other than that you will have a really exciting time as we have, planning your dreams. Hope this helps.

Gina

Hello Jasemma

I echo the thoughts of others on here, however, I would advise looking at long term rental if you need to cover mortgage payments.

This is not fully gauranteed however as an income, tenants can default. but you may have some legal redress to gain back on a tenant defaulting.

In the Costa Blanca, you could be looking at roughly £300 per month income on long term rental, with the tenant paying the utility bills and you paying the Community bills.

Renting out for seasonal lets is a different ball game.

Summer lets, July/August, can command up to £275 per week dependant on your property, but the Winter months can see that drop to £150 per week IF you can get the rentals out of season.

I hope this helps,

Rgds,

I agree with Fibby, there is a big demand for long term rentals.  It is quite normal now to ask for 1 months  rents up front, plus 1 month's deposit and another month up front which represents the last month (where normally many people don't pay).  If you do this you can limit the risk of missed payments.

Jasemma,

Same as the rest, I agree with all the comments however will add some extra info you should be aware of

1. Most agents will set an rental expectancy of 12 weeks per annum - maximum and that is not guaranteed
2. Do not fall for 'Guaranteed Income' - 90% of the time the income is loaded onto the purchasing price
3. Very important - Spain has some different laws regarding long term letting. If a person Lets for a long time and then refuses to leave i.e Squatter - it is very difficult through Spanish Law to get them removed. In addition, if you opt to sell the property whist in the process of a Long Let, you have to offer the property first to the current resident. Make sure you understand these laws before heading down the 'long term' let route. You need to make sure your Contract of Let is watertight.
4. Remember - Long term lets attract a reduced rental income for the duration
5. Don't be fooled into thinking all the money you make will be clear profit. You do need to factor in residual costs you will incur including the Management of the property (cleaning, maintenance etc), Communial area taxes, utilities and Spanish Income Tax on earnings from the property.

I can speak for the Management which we benchmark at approx 20-25% of the rental charge for indication. As per another thread (Renting Property Short Term), if you want it, we have a simple indicative spreadsheet that can help you work out / understand what costs will be incurred and typically what you should be charging. Drop us a PM if you'd like it sent over....!

Best of all, you'll have a property (ies) out in the sun making a good investment so whatever you decide to do, make sure you enjoy it

Darren

This message was last edited by Darren Ward on 2/27/2007.

Thanks Guys for the advise...

What do you think would be the best type of property to invest in. Villa or apartment. I know that villas are more but will this attract a better rental or do you think that an apartment will return more rents at a lower cost?

Also as a first investment would you go for the best your could afford.

I am looking for a property that rents well and then when i retire i live in it during the winter months and rent during the summer to provide me with an income. what do you think to this strategy? Better then investing in a pension pot?

 

Thanks

 

JAsemma 

Jasemma,

Depends how you look at this one........apartments are good if you 'only' intend letting out, can be quite cost effective. If you intend residing for a period yourself, one simple question, will you be satisfied having 'visitors' as your potential neighbours for 6 months, on the basis the next door property may be Letting as well. As you know, when people go abroad, they stay out late, play music, can be rowdy, can be noisy.

If I were you, try and go for a villa if finances allow and if you get the option, opt for one with a pool or land enough to have one installed. If you want to get the best out of rental....you need to make your property unique to the marketplace.

As for investment, again, you take your chance with the property market as you would with shares / pensions etc. You'll need to do some homework on the best areas to choose your property. It's all about supply v demand, if there are a lot of properties for sale (and non selling), it'll drag the Invesment yield down, chose a nice area with a waiting list for property....you set your own investment yield.

But first......you have to buy it !

Hope this helps

Darren

Hi again Darren,

Sorry I thanked you for the info before I tried to open attachment. I peaked too soon as usual and was going to read it later. Could you send again in word coz my computer won't open it. Janice put me on PPS which works fine but this one wouldn't work. anice is going to kill me soon for being such a simple head.

Gina

This message was last edited by JeansSis on 5/17/2007.

Gina, if it's in the same format as Darren sent to me, it's an Microsoft Excel document/spreadsheet.  If you have Microsoft Office on your computer, you usually have this programme, unless you've chosen not to install it.

Otherwise, don't know how you can get it, other than buying Office.

So, really, I was no help at all!!!

Sorry!

Thanks Jan,

I need excel don't I? Never mind perhaps I can sort something else out. Thanks anyway.

Gina

Gina, if you click on this link, you can download an app which will allow you to view and print excel documents without having to install Excel.


www.microsoft.com/downloads/details.aspx?FamilyID=c8378bf4-996c-4569-b547-75edbd03aaf0&displaylang=EN

Maybe that will help.  Don't think you'll be able to edit the spreadsheet, but at least you can view it and print it out.


This message was last edited by Pitby on 3/4/2007.

Gina

If you search on Google "Excel Viewer" you should find sites that will allow you to download an Excel Viewer application. This will allow to read only the particular spreadsheet.

Thanks everyone. Will give it a try. Failing that I have forwarded to my work computer, it has excel. Here#s hoping.

Gina

Gina, another option is one that I often use which is Google Spreadsheet.  It's very good...and you can use it online and you can import Excel files into it.

Google spreadsheet

Thanks Justin,

I'll keep trying.

Thanks all.

Gina

Gina

I also have a .pdf version which allows you to see the spreadsheet but not input into it. If you want to take a look at that and then send me a list of your own indicative costs per module, I'll work out for you your very own spreadsheet and send a .pdf version back to you

That's assuming you have .pdf viewer ???

Try your office computer and let me know.

Regards

Darren

Hi Darren,

I have acrobat, if that's what pdf is then go for it.

Thanks Gina

Gina

Done....just let me know (privately) all your expected charges, try and be as honest as you can and give an over zealous cost rather than under estimation, that way, it'll be 'worse case scenario'

Darren

Hi

Is it best to buy on a golf course - is the rental potential higher - I am looking at the Mucia region has anyone else now of any better regoins to buy?

 

Thanks

JAsemma

Jasemma,

Start with the Region, I personally think you would be choosing the ideal area if your intentions are for Rental, with 2 local airports (San Javier & Alicante) already in place and a third due to be completed very shortly (Murcia), the area is already supplied by multiple airlines offering 'low-cost' flights which form a part of personalised holiday 'packages' nowerdays. If you take a generalisation of how people book a Golf Break for example (and we've done this), it's find a golf course, find an area, find accommodation (decent and cheapish) and then find a cheap flight. So first step it choosing an area that has the influx of holiday makers.

Your question on the rental potential is much harder though as this breaks down into three main objectives, those that want a golf break, those that want the beach, and a smaller minority that look for culture. The ideal would be to cater for all three however, you have some considerations as well.

• Golf - If you choose 'just' a golf course, you're likely to attract small parties of golf break enthusiasts, probably only getting 3 or 4 nights rental at any one time, however, this can be as cost effective as if Letting out for a week as you can charge per person and slightly higher than the average per night charge on a weekly basis. You also have to consider the type of client and screen them thoroughly, this is your property and you want it treated with respect, so 4 blokes with all their equipment......not generalising on us men and our behaviour / habits but they will need to be managed.
• Beach - you have a lot of competition for this marketplace so that drives the revenue opportunity down as you'll need to match the local accommodation charges unless you set really high standards and target a specific client. You'll mainly get families however this does offer a better opportunity for long term rent, especially over the autumn / winter period. If you opt for this, target SAGA and ask them to promote your property to the over 50's. More chance the property will be looked after if it's a longer let. Again, long lets are going to drive the revenue down even further.
• Culture - you have to choose an area that has very good places of interest, i.e wine regions, castles, monastaries etc. Again, these are tailored breaks and you can set a higher rental charge, but will get fewer takers.

Ideally, you'll find an area that meets at least two of these three criteria, we opted for Jumilla, not to Let however, but the criteria does hit two of the three and the third (beach) is at least accessible within an hour, less when the motorway is developed.

Hope that's helped slightly

Darren

This message was last edited by Darren Ward on 3/5/2007.

Hi Jasemma,

I think Darren has covered all aspects of buy to let very well.  Now when it comes to choosing resorts, my advice is to avoid  - if possible the usual Polaris World and Trampolin Hills stuff.  far too many rentals  available forcing rental income down and ifffy build quality and late delivery.

La Serena Golf near Los Alcazares has it all.  Fabulous build quality, on time completions and best of all one of the few golf projects in Murcia with great sea views

I bed apartments from €177,000 -  1 bed however, not good rental proposition

2 bed 1 bath apartment € 249,000 for a good position. 2km  full sea views.

The golf course is up and running so instant full rent possible - Build time 12 months.

Polaris World are cheaper starting at €119,800. But no sea views.  Trampolin Hills €130,000 for 2 bed 1 bath. No sea views.

I hope that gives you a good idea as to prices etc.

Good luck - Gillespie

 

Hi Darren & Gillespie,

I wonder if you can offer an opinion on a two bed apartment I have bought in Duquesa. It is due for completion soon (waiting for habitation license). When we purchased, our agents were unsure of potential rentals because for them it was an untried location. We are not looking for a huge rental return initially, just enough to cover costs. It is built to a reasonable standard on a gated development. It is two minutes walk from the beach, five mins walk from the port, and five mins walk from a golf course. We thought that the location would be attractive from a rental point of view. Any thoughts would be welcome.

Alan

Alan,

This area is away from ourselves however I cannot see any reason why it shouldn't be successful, you have the local amenities, a golf course designed by Robert Trent Jones (Snr) and access to multiple other courses, inc Valderrama. Local airport access (approx 40mins) and with the popular attactions in Marbella and Peurto Banus.....I'd say you have it made !

However, it's going to be how you market the property, you only get return on the effort you put in and you cannot hedge your bets on one agent doing that for you. It's down to yourself to get as much exposure on your property and finding a 'unique' in the marketplace, remember, near the coast you'll have three, four or five times as much competition as you would inland. So you need to make a decision, furnish to the highest standard and target the upper-end of the class market (sorry but it's fact), or target those that want to be associated with being in the celubrious area without paying top Dollar. That has no reflection on your property, it's where you see the best return against your investment.

What is fantastic about this Forum, everyone has an opinion and will share it, my opinion, take all the advise regarding where and how to rent on this Forum and target them all, be it agents, Ebay, websites....target the lot. In fact, why not use this site to help you out, there are over 11000 members, I for one would be interested in Letting down in that area even though we are already present in Spain (Jumilla). We have in excess of 300 clients so why shouldn't I promote your property to them in order to visit the Region you are in, or why not target residents in our inland urbanisation and offer a twin-resort offering, a few days / week inland playing golf and wine tasting, follwed by a few days / week at the coast in the Glitz and Glamour of Marbella.....just an idea !! But think like that, outside the box and you'll have a unique over others.

Remember, advice is free (usually), ............Gillespie.....over to you !!!!!

Really hope it works out for you Alan

Regards

Darren

This message was last edited by Darren Ward on 3/5/2007.