Is it a good idea to go for buy to let now?

Post reply   Start new thread
:: New - Old :: Old - New

Pages: 1 | 2 | Next |

Forum home :: Latest threads :: Search forums
The Comments
12 Apr 2012 11:36 by figo79 Star rating. 12 posts Send private message

 I want to buy a small flat in Sevilla, Granada or Madrid as an investment. The price I am looking for is 100 K and I will put 20-25 k. the flats I am looking at (studios to 2 bedroom flats). do you think it's a good idea? I am worried about many things.. not being able to rent it out easily. 2) the tenants not paying 3) the ecnomic situation is Spain 4) and is it a good idea in general? 

 

I am looking for your advice.

thanks  





Like 0      
12 Apr 2012 12:03 by stillgoin Star rating. 161 posts Send private message

 your question is like the how long is a piece of string one

there is no answer





Like 0      
12 Apr 2012 13:55 by Sanchez1 Star rating. 853 posts Send private message

I don't think buying in Granada/Sevilla is a very good idea.  Unemployment in Andalucia is very high (over 30%) so there is not much demand for rentals, especially with losts of Spaniards moving back in with their parents.

Madrid would be a better idea but I don't think you'd find anything decent there for 100k, at least not in central Madrid.  What sort of rental yields are you expecting?  I think you'd only get 4-5% in Madrid, which is not great...



_______________________

Read my blog: Spain Money Saving Tips and Offers 

Use TransferWise to send money abroad. A lot cheaper than the bank and other online currency exchanges!.

 

 




Like 0      
12 Apr 2012 14:10 by jaldridge Star rating in Manilva. 144 posts Send private message

jaldridge´s avatar

If you did a buy to let it would have to be in an area where there is demand, otherwise I would think it would be too risky.  I agree with sanchez1, Madrid would be your best bet but your budget seems a bit low so I doubt you'd find something in a decent area.



_______________________

Justin

EOS Team




Like 0      
12 Apr 2012 14:27 by figo79 Star rating. 12 posts Send private message

 the thing is that Granada is a university city while Sevilla has 2 universities and they have a huge student community especially Granada. My mortgage would be something like 250 euros a month while the rent could be 400-500 Euros a month. There are OK flats in central Madrid in an area called La latina which is also a young people´s area.





Like 0      
12 Apr 2012 14:28 by mmbc Star rating. 37 posts Send private message

You would need to be very careful about the area and the type of tenant that you would be getting. In the event that you end up with a tenant who refuses to pay its very difficult to evict them especially if you aren't a resident. Rental income is often well shaken by the time agents fees and all the other charges are paid.. 





Like 0      
12 Apr 2012 14:35 by figo79 Star rating. 12 posts Send private message

 how much are the agent fees? is it 10% of the rent for instance? and can I ask the estate agents to evict the tenant if they refuse to pay? also what other charges I have to pay ? Tax for example if my flat worths 80k euros and the rent is 400-500 a month how much tax I will be asked to pay annually ? I am just looking for a rough estimation.  

 


This message was last edited by figo79 on 12/04/2012.



Like 0      
12 Apr 2012 18:08 by mmbc Star rating. 37 posts Send private message

 Agents fees are usually one months rent per annum. However, there is often an additional charge to cover dealings they may have with repair men etc. In my case this is a one of charge of €300.

Regarding eviction I haven't directly had to deal with yet (thank god). From what I gather an agent will look after it but it is a very long procedure and tenants rights are very strong in Spain. 

Other charges include IBI (Council Tax), Non Resident Property Tax (If applicable) €300 per annum. If you are in an urbanisation you will also be liable for communidad fees and possible entidad fees.

You will be liable for income tax of 24% of an profit you have made on the rental. You can now offset mortgage interest etc for example against rental income.





Like 0      
13 Apr 2012 00:34 by cazzy Star rating in Inland Andalucia. 180 posts Send private message

 There are quite a few properties on the market at the moment where owners are using rent to buy as an option, you could do this and then let it out for holiday rentals??? I think your budget is a bit low for the cities, if you came out of the cities you could pick up a fully reformed 2/3 bed house for around the 80k mark complete with furniture. As a holiday let you could rent for between 250 to 500 a week depending on the time of year. You would have to pay for cleaning and keyholding though probably around 60 euro a changeover. Just a thought!!

 

Caz





Like 0      
13 Apr 2012 00:57 by figo79 Star rating. 12 posts Send private message

thanks a lot guys! I appreciate your advice! 





Like 0      
13 Apr 2012 13:45 by Sanchez1 Star rating. 853 posts Send private message

figo79

 the thing is that Granada is a university city while Sevilla has 2 universities and they have a huge student community especially Granada. My mortgage would be something like 250 euros a month while the rent could be 400-500 Euros a month. There are OK flats in central Madrid in an area called La latina which is also a young people´s area.

As I understand it, most Spaniards to stay at their home town university and don't tend to venture too far away from home.  So I don't think you have the same kind of student rental market as you do in the UK.  You seem to be interested in areas where there are young people, but with youth unemployment at over 50%, I'm not sure that is wise at the moment...

La latina looks an intersting area though, with some reasonably priced property.



_______________________

Read my blog: Spain Money Saving Tips and Offers 

Use TransferWise to send money abroad. A lot cheaper than the bank and other online currency exchanges!.

 

 




Like 0      
13 Apr 2012 14:21 by figo79 Star rating. 12 posts Send private message

 there are two bedrooms flats in La Latina in Madrid and other residential areas in Sevilla for 100 k or even less. The are in an OK condition. I can get those and let them out to families. but I am really worried about them not paying the rent after a while. I was thinking to use estate agents for this to make sure that they take care of this hussle. 





Like 0      
13 Apr 2012 14:37 by cazzy Star rating in Inland Andalucia. 180 posts Send private message

 Getting a mortgage might be an issue, unless you have a big deposit.





Like 0      
13 Apr 2012 14:55 by figo79 Star rating. 12 posts Send private message

 is 25% ok? or they would want more than that? 





Like 0      
13 Apr 2012 15:12 by cazzy Star rating in Inland Andalucia. 180 posts Send private message

 Possibly, 50% would be better, don't forget on lower price properties you will also need 12-15% of the property value for fees etc. Most repossesion properties are being offered with 100% mortgages, but a lot are over priced due to the banks trying to get there monies back.





Like 0      
13 Apr 2012 15:31 by figo79 Star rating. 12 posts Send private message

 Wow I did not know this! 12-15% on the low priced houses! that's a lot. If the local banks are not going to accept the 25% I am offering I will try an International loan. let's see. 





Like 0      
13 Apr 2012 15:39 by cazzy Star rating in Inland Andalucia. 180 posts Send private message

The Notary fees and Tax have recently gone up, as well as this you have legal fees. I hope you manage it.





Like 0      
13 Apr 2012 15:42 by cazzy Star rating in Inland Andalucia. 180 posts Send private message

13 Apr 2012 15:55 by figo79 Star rating. 12 posts Send private message

 wow these houses are nice!! but are they easy to rent out? 





Like 0      
13 Apr 2012 18:56 by cbrammeld Star rating. 172 posts Send private message

 Hi figo79

 

There are replies else where on eyeonspain saying you would find it very hard to make any money renting out a property on a buy to let in Spain. With your level of investment you can make £200 per month in the uk on a buy to let property. It may not have the same romanticism as a Spanish one but at least it will pay for itself. Your buying feees will be less than £3000 rather than £10000.

Eviction of scum tenants will be a problem where ever you buy but expect to be £1000 in the uk if court action is needed. Any debt run up by the tenants is not tied to you or the property in the uk - their £2000 gas/electric bill is not your problem. You will also have lots of legitamate expenses you can put againt your profit, not as much as a tory peer though.

You could even build up a small property portfolio in the uk and use it to pay for a Spanish property.

 

Remember for student lets you may only get income for 9/10 months and potentially have higher refurbishment costs every year.





Like 0      

Pages: 1 | 2 | Next |

Post reply    Start new thread


Previous Threads

the problem with the ENDESA ON LINE WEBSITE! Grrrrrrrrrrrrrr !!!! - 15 posts
BARGAIN - Stunning White Sofa + Matching Furniture For Sale - 0 posts
Edinburgh Crystal Decanters - 2 posts
help - 0 posts
help - 4 posts
best bank for direct debits for utilities - non resident ! - 5 posts
Driving to costa blanca from calais - 7 posts
Car Malaga hire - 6 posts
quesada to gibralter - 10 posts
El calon - 3 posts
Help with Santa Greenhills - 4 posts
FURNITURE WANTED - Costa Del Sol - Elvira Area - 0 posts
health care coin area - 0 posts
car for sale - 0 posts
FREE Gatwick/Valencia flights 11/04/12 ~ 09/05/12 - 0 posts
Car insurance question - 5 posts
Taxis from Malaga - 8 posts
Kitten Wanted - 1 posts
Car Wanted! - 2 posts
As in the UK so it shall be in Spain... - 9 posts
Pope Benedict meets the Polizei - 0 posts
for sale - 0 posts
best fish and chips - 42 posts
water and electric installation - 5 posts
Drives and paths - 0 posts

Number of posts in this thread: 26

DISCLAIMER:  All opinions posted on these message boards are the opinion solely of the poster and do not necessarily reflect the opinion of Eye on Spain, its servants or agents.


1 | 2 |
Our Weekly Email Digest
Name:  
Email:
   


This site uses cookies. By continuing to browse you are agreeing to our use of cookies. More information here. x