# Property purchase advice needed



## PropBuyer2018 (May 16, 2018)

I used to live in Spain, and I am pretty familiar with the place. But I have never owned property there, and I know that Spain is very much "buyer beware" in regards to property.

*Sidebar (off-topic, feel free to ignore)
*
I once rented a work area there and, insanely, the law doesn't require the owner to provide the existing plans for the premises. Instead the renter has to hire a brand-new architect to re-draw the plans for the interior. It's completely bonkers, and it seems to be a simple boondoggle to provide an artificially high amount of demand for professional building designers.

Whatever, that is just my warning to anyone hoping to open up a business premises in Spain. Your milage may vary depending on the laws in your province, city or autonomous community.

*/Sidebar*

My real question:

I see dozens of cheap apartments in my city. They are really close to the city centre. I am aware of the area: poor, most of the population is on welfare, and a lot of sex shops.

I don't worry about that. Really, I am totally fine with a gritty atmosphere. I had a buddy living in the area and stayed with him a bunch of times. The place is pretty damn safe, and incredibly convenient. The cops are present all the time, and I will be buying excellent security for the apartment.

What I want to know is: is the cheap price purely because of the low-status neighborhood, or could it be because of more damning reasons?

Are the vendors required to reveal to me any major issues like serious structural defects, or the building being declared unfit for human habitation?

Obviously I won't buy if I can't get affordable insurance for fire and burglary. Obviously I won't buy if the municipality has ordered people not to move in to the building. Can you think of other reasons that I haven't suggested before why I wouldn't want to buy? Please don't give me general advice about the neighborhood.


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## kaipa (Aug 3, 2013)

Your post suggests that you are a bit risk adverse which is not in itself bad. Different strokes for different folk. Anyway you don't actually say where the place is. If you did there might be people who have more local knowledge about the place than trying to guess. By cheap do you mean Spanish cheap or foreign cheap?


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## kaipa (Aug 3, 2013)

Your post suggests that you are a bit risk adverse which is not in itself bad. Different strokes for different folk. Anyway you don't actually say where the place is. If you did there might be people who have more local knowledge about the place than trying to guess. By cheap do you mean Spanish cheap or foreign cheap?


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## Overandout (Nov 10, 2012)

PropBuyer2018 said:


> Are the vendors required to reveal to me any major issues like serious structural defects, or the building being declared unfit for human habitation?


Simple answer: Yes, they are obliged to tell you about hidden defects that they know about.

Thay cannot, of course be obliged to tell you what they don't know.

You, as the plaintif will have to prove not only that the issue exists, but also that it existed before you made the purchase (not always easy).

Also, in most cases with a private purchase, you only have 6 months to claim. After that you're on your own.


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## kaipa (Aug 3, 2013)

Remember it is not common to do surveys on apartments here. Your lawyer will check loans and outstanding debts but structural defects will not be something the vendor will be keen to reveal ( they might not know any).
If it's cheap then maybe some of the flats are rented etc which might be something you need to consider. However if it's a cheap area and you stick up alarms and loads of security you will kind of be advertising !!!


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## Horlics (Sep 27, 2011)

PropBuyer2018 said:


> What I want to know is: is the cheap price purely because of the low-status neighborhood, or could it be because of more damning reasons?
> 
> Can you think of other reasons that I haven't suggested before why I wouldn't want to buy?
> 
> Please don't give me general advice about the neighborhood.


1. I don't know, you haven't told me where it is.

2. No, I don't know where and what you are buying.

3. OK, given that you haven't said where it is, you're not going to get any advice at all about the neighbourhood.

HTH

You might, though, consider getting an apartment with a spare room. I'm sure somewhere in a poor area populated by welfare recipients and with a constant police presence will be a real pull on Airbnb.


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## booksurfer (Apr 21, 2018)

PropBuyer2018 said:


> What I want to know is: is the cheap price purely because of the low-status neighborhood, or could it be because of more damning reasons?


Given you haven't mentioned anything about where it is, this isn't a question anyone can really answer.

However, common sense prevails I think. You need to do an analysis of property up for sale and being sold within that area and neighbourhood and see how the price of the property you're interested in measures up with the other prices. If the one you're interested in is substantially less than all the others, you'd need to find out why.


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## PropBuyer2018 (May 16, 2018)

Horlics said:


> 1. I don't know, you haven't told me where it is.
> 
> 2. No, I don't know where and what you are buying.
> 
> ...


My idea was that people would use their own personal experience with purchasing property, and especially any experiences they had with purchasing property in places similar to what I describe. It might be the experience which they know of at a remove, perhaps a work colleague or a brother-in-law.

If you have lived in any Spanish city, you have probably lived near such an area, and even if it's not the same city, it will be nearly identical. Spanish cities are universal in having areas like this.

But if you are not comfortable talking about it, that is fine.


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## PropBuyer2018 (May 16, 2018)

kaipa said:


> Your post suggests that you are a bit risk adverse which is not in itself bad. Different strokes for different folk. Anyway you don't actually say where the place is. If you did there might be people who have more local knowledge about the place than trying to guess. By cheap do you mean Spanish cheap or foreign cheap?


Spanish cheap, and foreign cheap. Less than EUR25,000.

The biggest clusters of really cheap apartments are far out on the edge of the city, and also this central area.

My hope is that the large cluster of really cheap apartments in the area is caused by the old adage of "Location, location, location". A lot of the Spanish middle class is kinda racist (like most countries) and this area probably has the highest concentration of Sub-Saharan Africans in the entire autonomous community.

So my hypothesis is that the primary reason why these apartments are so much cheaper than every other area near the city centre is basically snobbery: people don't want to live near the sex industry and they really don't want to live near black and Arab people. Also, maybe they don't want their kids to go to schools with a high proportion of immigrant kids who don't speak Spanish. That isn't snobbery, but I won't have kids so it doesn't affect me.

The hypothesis is that the buildings have no more structural defects than buildings in other, far more expensive areas of the city.

Meaning that if my hypothesis is correct, then it may be a good idea to buy.


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## PropBuyer2018 (May 16, 2018)

kaipa said:


> Remember it is not common to do surveys on apartments here. Your lawyer will check loans and outstanding debts but structural defects will not be something the vendor will be keen to reveal ( they might not know any).
> If it's cheap then maybe some of the flats are rented etc which might be something you need to consider. However if it's a cheap area and you stick up alarms and loads of security you will kind of be advertising !!!


Well, if I own an apartment, I will automatically have to join and contribute to the resident's committee, correct?

If I am buying an apartment, ideally I would like to speak to the resident's committee president and ask him to tell me about any roof leaks, gas leaks, sewage blockages, plumbing failures, electrical failures, and all municipal safety inspections and the results thereof prior to buying.

I would make a contribution of say EUR400 to the committee in exchange for this information, whether I buy or not. My purchase will be conditional on the owner of the apartment confirming that the report is fully correct and that he is personally liable for all omissions.

Are there surveyors who can be hired to survey both the apartment and the building? Hopefully I will be able to persuade all the other residents to allow my surveyor to enter for a payment (with a factura for all payments) to compensate each resident for allowing my surveyor to enter. 

I will be hoping for him to spot tell-tale signs of roof leaks, or signs of, say, flooding.

If the building has has sewage blockage problems, are these supposed to be reported to the municipality?


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## Overandout (Nov 10, 2012)

PropBuyer2018 said:


> Spanish cheap, and foreign cheap. Less than EUR25,000.
> 
> The biggest clusters of really cheap apartments are far out on the edge of the city, and also this central area.
> 
> ...


Your thinking is almost sound.

However, although many people would not, for the reasons you state, want to live in this area, there are many, many developers, investors and speculators who would have long since snapped up a city centre apartment at a bargain price.

I am sorry to say that if a "bargain" has made its way past the family and friends of the seller, the family and friends of the banks, the family and friends of the president of the community, etc, etc. and thus made its way into the public domain, then there's something very wrong with it.


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## PropBuyer2018 (May 16, 2018)

Overandout said:


> Your thinking is almost sound.
> 
> However, although many people would not, for the reasons you state, want to live in this area, there are many, many developers, investors and speculators who would have long since snapped up a city centre apartment at a bargain price.
> 
> I am sorry to say that if a "bargain" has made its way past the family and friends of the seller, the family and friends of the banks, the family and friends of the president of the community, etc, etc. and thus made its way into the public domain, then there's something very wrong with it.


So you mean that it's definitely not the racial composition of the neighborhood, or even relatively elevated crime levels compared to other areas of the city.

If there are hundreds of cheap apartments clustered in a small area where all the Africans and Arab people live, the most likely reason is that all of those hundreds of cheap apartments have serious structural physical defects that cannot be fixed by the owner, even if he has tens of thousands of euro to pay for repairs?

If the answer is yes, I won't slight you, and will express gratitude for your contribution (I thank you for your contribution anyway) especially if you have seen many such apartments and are connected to the real estate industry in Spain.


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## kaipa (Aug 3, 2013)

Maybe you are trying to do too much. It is probably true that if you dont speak Spanish and might not know the area and fine points of the culture you probably won't be looking at a bargain. Someone else would have seen that long before you. However if you just wish to have a cheap place that you are happy with then maybe it's okay. If though you are going to worry about things like the roof etc then maybe it's not for you. I don't think the communidad are going to be overly helpful even if you do offer money( which is stupid to do). If it's 25,000 then it is really cheap !! And that is probably to an extent down to the socio-economic area more than structure. 
I think that being a giri it is probably best to forget it as you are probably at too much of a disadvantage to be able to an informed decision


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## Overandout (Nov 10, 2012)

PropBuyer2018 said:


> So you mean that it's definitely not the racial composition of the neighborhood, or even relatively elevated crime levels compared to other areas of the city.
> 
> If there are hundreds of cheap apartments clustered in a small area where all the Africans and Arab people live, the most likely reason is that all of those hundreds of cheap apartments have serious structural physical defects that cannot be fixed by the owner, even if he has tens of thousands of euro to pay for repairs?
> 
> If the answer is yes, I won't slight you, and will express gratitude for your contribution (I thank you for your contribution anyway) especially if you have seen many such apartments and are connected to the real estate industry in Spain.


I am not necessarliy saying that it would have a structural defect or even something wrong with the building itself, but you have to ask the question"why has nobody else bought it?".

If we look at a comparable area in Madrid; Lavapies. High level of immigration from outside the EU, drug use / sales on the street, late night noise from discos and clubs, no parking, high levels of grafiti (the ugly vandalism kind, not the street art kind) and other associated social issues.

However, property prices are extremely high. Why? Location, location ,location. There are no bargains there. The area is prime city centre where the investors know that the value of the ground alone will triple in a few years. The state of the building is not relevant. And if the building can be used, it is on Air BnB for 500€ per week. The owners of the properties do not live there. They live in out-lying quiet high-end suburbian developments far from the noise and crime.

You need to be asking why your opportunity is not the same... do the locals / investors know something that you don't? What are the plans for the future of the area by the local authority? Compulsory purchase orders nearby?

I realise that you are looking to live in it, not make money out of it (at least I think that is what you are after) but even so, it all sounds too good to be true...


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## PropBuyer2018 (May 16, 2018)

Overandout said:


> Your thinking is almost sound.
> 
> However, although many people would not, for the reasons you state, want to live in this area, there are many, many developers, investors and speculators who would have long since snapped up a city centre apartment at a bargain price.
> 
> I am sorry to say that if a "bargain" has made its way past the family and friends of the seller, the family and friends of the banks, the family and friends of the president of the community, etc, etc. and thus made its way into the public domain, then there's something very wrong with it.


I assume that these apartments are for sale mostly because the owner was wiped out by the economic crisis.

If his family and friends were feeling generous, I imagine they would first give their friend or relative money for food, gas, electricity and maybe more to help him pay part of his debts to his creditors. 

But maybe they would refuse to buy a dwelling in a part of the city that would be a constant source of property tax, and where the only people who are comfortable renting there have an elevated risk of not paying their rent.

If you are not willing to live beside Africans, but you want to help your relative, you will have the very significant hassle of being a landlord with all the attendant paperwork, and a guaranteed annual liability to the buildings committee and the property tax.

But if you *are* OK with living near Africans, maybe it's an OK purchasing idea.


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## PropBuyer2018 (May 16, 2018)

Overandout said:


> I am not necessarliy saying that it would have a structural defect or even something wrong with the building itself, but you have to ask the question"why has nobody else bought it?".
> 
> If we look at a comparable area in Madrid; Lavapies. High level of immigration from outside the EU, drug use / sales on the street, late night noise from discos and clubs, no parking, high levels of grafiti (the ugly vandalism kind, not the street art kind) and other associated social issues.
> 
> ...


This city is in a totally different league to Madrid, economically. The cost of living is a lot lower. It is not known well internationally. But it's home. I have a lot of friends and business associates and even a few lovers there. Good memories.

It's not one of Spain's disaster areas either. It's not like Andalusia. It is mid-league.

I have no illusions about being able to rent to tenants profitably, not in the next ten years. I do think that eventually, it will be gentrified and there will be a demand for apartments there. Times square in NYC used to be a place where middle class people would stay away from. I think the sex industry won't survive long-term because the internet means people don't need to go to a specific shop to get sex toys and porn. 

If the area stays like it is permanently, then that is something I can handle. If it becomes intolerable I will sell it for almost free. I will sell it for one Euro, if necessary.

The fact that there are zero apartments in the area available for less than EUR19,000 tells me that for whatever reason, people are not completely desperate to sell. I don't understand the specific details of the very cheap end of the Spanish real estate market.

For some reason, people are holding out for enough money to keep a _mileurista_ going for more than a year and a half. I have this idea, maybe wrong, that life in the area is not all that intolerable, because a person who really can't live there would presumably accept any price to get rid of the property.


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## kaipa (Aug 3, 2013)

Is there a particular reason why you don't want to name the place? I mean you talk about it so abstractly that it all seems open to speculation


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## Horlics (Sep 27, 2011)

kaipa said:


> Is there a particular reason why you don't want to name the place? I mean you talk about it so abstractly that it all seems open to speculation


Clearly worried that this bunch of mostly British reasonably well-off expats who have found their lovely little places in the sun, will immediately sell up and snatch away the 25k box surrounded by people who most people don't like living with, where their acquired 2nd language won't be spoken and they'll need a third, and not too concerned whether the internet does in fact clear up the local sex workers (even though there's a good chance it won't given that gratifying sex for most involves penetration).


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## MikeItMo (Mar 3, 2018)

interesting thread anyways.


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## booksurfer (Apr 21, 2018)

PropBuyer2018 said:


> I don't understand the specific details of the very cheap end of the Spanish real estate market.


It's driven by the same factors that drive the rest of the property market—supply and demand. Why would one apartment sell for €400k and one €20k? Everyone wants to live in one and not many in the other. The reasons for desirability are varied, an apartment in a nice area with a sea view and minutes walk from all amenities is likely to be considered more desirable than one further inland facing a concrete conurbation of many similar looking properties miles from local facilities.



PropBuyer2018 said:


> For some reason, people are holding out for enough money to keep a _mileurista_ going for more than a year and a half.


So going from what you've said, these properties are valued at around €18-20k. If you're thinking of renting it, you should consider 5% annual return on capital value as the median income. So about €1k a year or €80 a month rental return.

Better than shoving 20k in the bank for interest.


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