# Is this idea a workable one?



## mightymo (Sep 21, 2010)

Maybe one of you has considered and looked into the situation that I am about to propose and can offer information concerning its worthiness.

My wife is from Spain and I'm an American. We're looking at retirement in the *Malaga area*some time down the road. But in preparation for that, we are booked for two weeks in Malaga at the end of May to search out properties that we may like to retire to. *If we decide to purchase, we want to rent*until the time comes for us to move there; which *could be close to 10 years*!

The point for this is to buy cheap, rent to pay our mortgage, and hang onto the place as property values begin to increase over the years.

So the question is simple: Based on your own personal experiences and / or knowledge of the Spanish economy / housing situation do you think this is a good idea?


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## xabiaxica (Jun 23, 2009)

mightymo said:


> Maybe one of you has considered and looked into the situation that I am about to propose and can offer information concerning its worthiness.
> 
> My wife is from Spain and I'm an American. We're looking at retirement in the *Malaga area*some time down the road. But in preparation for that, we are booked for two weeks in Malaga at the end of May to search out properties that we may like to retire to. *If we decide to purchase, we want to rent*until the time comes for us to move there; which *could be close to 10 years*!
> 
> ...


Hi & welcome

you obviously know that things are pretty bad in Spain at the moment, and property can be bought for much less than before - so buying now sounds like a good plan

general consensus is that prices haven't yet bottomed out, so maybe wait a little longer -but who knows?

however, if you can't pay the mortgage on the property unless you can rent it out - DON'T DO IT! - finding a tenant isn't & never has been guaranteed -& don't believe any agent who says they can do this - or that you can cover your mortgage just by letting in the summer season

yes, it does happen - but it's by no means guaranteed

from my balcony I can see villas on the hills all around me & apartment blocks in complete darkness - the majority of them are empty all year round - even in the high season of July & August

so many properties are being repossessed because the owners thought the rental income would pay the mortgage - it doesn't in most cases

it's also worth pointing out that rents have decreased too - we have rented for over 7 year & now pay less monthly rent than we did 7 years ago - for a much better property


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## dunmovin (Dec 19, 2008)

mightymo said:


> Maybe one of you has considered and looked into the situation that I am about to propose and can offer information concerning its worthiness.
> 
> My wife is from Spain and I'm an American. We're looking at retirement in the *Malaga area*some time down the road. But in preparation for that, we are booked for two weeks in Malaga at the end of May to search out properties that we may like to retire to. *If we decide to purchase, we want to rent*until the time comes for us to move there; which *could be close to 10 years*!
> 
> ...


In theory, it sounds like a good idea, but reality is the choice of location/type of property/ howmuch you are prepared to invest(and more importantly,is that an investment that you could afford to lose if it all went wrong)
Buying "cheap" is a bit vague. You could buy a place cheaply, but have to spend a lot to make it attractive to potential tenants. Letting as a "holiday let" can(not always but it does happen) require a lot of maintenance.If you take the time to read the post on the subject (here and on other forums) there are some horror stories of what absentee landlords have to clear up after the "tenants from Hell". On the other hand, some have done what you propose and it worked out well.
I moved from Scotland to Hong Kong and rented my Scottish property out. I had mostly good tenants, but one cost me a lot (damages to the house and furniture). Long before we moved to Spain, we decided to sell the house, fire the letting agent, who basically, was as much use as ashtray on a motorcycle and took a 1 month vacation solely to repair and rennovate the house prior to selling. However,others here have had a great result in doing this and had little or no problems. 

Now, if I was to buy a "cheap" place, I would get it a year ahead of when we planned to move in and use that year to get the place up to a standard we would be comfortable living in. although this way won't generate any income and in fact would be drain on finances,but the place would be ready to move in and no risk

good luck with whatever you decide.


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## jojo (Sep 20, 2007)

If it were me, I simply wouldnt risk it! Property in Spain isnt going up in value at the moment, and rumour has it that it could drop further in price. There arent so many people coming to live in Spain because of the economic climate, so not so many tenants available which is bringing rental prices down.

Whoever, in the long term?????? Well who knows! But right now, I'd say not, keep watching it for a few months/year!

Jo xxx


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## Brangus (May 1, 2010)

If you are considering taking out a mortgage in Spain, you might be interested in this article that ran in the New York Times last October regarding the draconian laws favoring the banks.

In Spain, Homes Are Taken but Debt Stays
http://www.nytimes.com/2010/10/28/world/europe/28spain.html?scp=1&sq=spain mortgage&st=cse




mightymo said:


> The point for this is to buy cheap, rent to pay our mortgage, [...]


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## Zimtony (Jun 28, 2008)

mightymo said:


> Maybe one of you has considered and looked into the situation that I am about to propose and can offer information concerning its worthiness.
> 
> My wife is from Spain and I'm an American. We're looking at retirement in the *Malaga area*some time down the road. But in preparation for that, we are booked for two weeks in Malaga at the end of May to search out properties that we may like to retire to. *If we decide to purchase, we want to rent*until the time comes for us to move there; which *could be close to 10 years*!
> 
> ...



In short - no. 
Glut of available properties
Decrease in rental values
No view yet on when (or if) property prices will increase.

Put your cash into something else I say

Cheers
Tony


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## mightymo (Sep 21, 2010)

Very, very good posts folks, I really appreciate your views. Obviously, it seems pretty consistant that what I proposed is not likely to be the best idea. I will reevaluate our plans and most likely chose another path.


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## 90199 (Mar 21, 2010)

Ten Years ago I bought a eight room Bungalow with attached single garage, two aljibes one large outhouse and 1500 square metres of garden, in the capital Valverde for 15 million pesetas. The house has easily doubled in value.

However I did not need a mortgage neither have I rented it out. If you could afford to pay cash and are willing to take a chance your initial investment could prove extremely beneficial to your retirement plans. I used my house at first for holidays, then for the winter months and eventually I sold most of my other properties in England and I now live here all year round, and have no wish to live elsewhere,


Hepa


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