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

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 

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,

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

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

Thanks Jan,

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

Gina

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