Spanish Property Investment Advice 

Brought to you each week by our property expert, Iain Maitland.

Posted on 02 June 2006

Watch Out for Timeshare Con Men

The recent Home Overseas Magazine Awards 2006 confirmed what we have long been saying here at Eye on Spain. The country is the numere uno for retirees. Each and every single one of the winners in the winners in the retirement category were Spanish resorts. The Gold Award for the Best Retirement Development went to Sol Andalusi, which is nicely located close to the Costa del Sol beaches as well as the mountains of Andalucia. A good place to be.

Simon Conn at Conti Financial Services is a top man. He is today offering advice on mortgages for overseas properties. As a rule, you should borrow in the currency you are earning. But those who buy properties in Spain to rent out should consider arranging their mortgage in euros so they can offset euro rental income against loan repayments. Euro loans are also about 2.5 per cent below sterling deals at the moment. Of course, you need to consider currency fluctuations which can impact on your borrowings both positively and negatively. There are other points to ponder. The minimum purchase amounts of 100,000 euros in Spain is one. So too is affordability which is the key criterion in many cases. In Spain your net income is considered and what you have left at the end of the months seems to be of greater concern than the 130% BTL rule we are used to in the UK. If you want a mortgage quote from Simon, email mortgages@internationalpropertyalerts.co.uk

I thought these Spanish timeshare cons were long behind us. Not so, sadly. Eight people have just been arrested in Fuengirola, Mijas and Coín regarding a timeshare fraud that has netted some 18 million euros from 15,000 people including Brits. The gang of eight used some 300 names and are believed to be responsible for more than 90 per cent of all timeshare frauds in Spain in recent years. A consumers organisation in Spain, the appropriately-named FACUA, says that there is a lack of control on timeshares in Spain. To be blunt, most people who have been conned have been naïve. They have acted on impulse in the Spanish sun. They have not done their number-crunching or due diligence. They have not taken professional advice. I have been in the property market for 20 years and I have yet to see a timeshare that is a decent financial investment. If you want to know more about the property cons taking place in Spain, email propertycons@internationalpropertyalerts.co.uk

By coincidence, Which? magazine is today picking up on buying overseas property abroad. They have some useful advice as follows. Those who buy an overseas property without having seen it only have themselves to blame if it ends up a disaster. Don’t jump on the bandwagon unless you're sure you can afford it, especially if you're securing it against your UK home. Check credentials. Is the seller really the property owner? Are the estate agents qualified and are they bonded to hold a deposit? What guarantees are there if the developer goes bust? Lawyers may seem to make the process complicated, but the work they do is vital to protect the buyer's best interests such as checking the vendor has the legal right to sell. Keeping an overseas property ticking over costs money. Insurance, maintenance, property management fees, service charges and taxes all add up. All good common sense!

All for now

Iain Maitland

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