# Yet another new hopeful



## davids0865 (Apr 12, 2016)

Hi All,

After living and working in rural France for the last 11 years, and with retirement looming, we have made the decision to consider Spain

The likely area is Costa Blanca and we will rent for 6 months to confirm the area

While still at the research stage, my mind turns to how best to use the capital I have (sold a large house in France) to generate a top-up the pension income

I could invest in the UK funds and get a steady if uninspiring return, or, here comes the main question buy some appartments or small houses to let

It seems to me that a 2 bed appt would command a rental of about 400€ per month, and on a purchase price of around 50K € that is almost 10% yield less voids and maintenance etc

I'm looking for a reality check, advice, and comments re inland/coastal etc, feel free to hit me with both barrels

And in case anybody is wondering, the full stop is not working on my keyboard


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## xabiaxica (Jun 23, 2009)

davids0865 said:


> Hi All,
> 
> After living and working in rural France for the last 11 years, and with retirement looming, we have made the decision to consider Spain
> 
> ...


:welcome:

My full stop works but I keep forgetting about it 


This recent thread might interest you http://www.expatforum.com/expats/spain-expat-forum-expats-living-spain/1051370-best-way-start-company-rent-out-holiday-lets.html


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## davids0865 (Apr 12, 2016)

OK thanks for that, not a rosy picture exactly

I take on board the company issue, doesn't apply in my case, and I'm only considering long term rental
The issue of resale is moot, as long as the property is rented why would you want to sell?

There will always be good and bad tenants, but as long as you have a damage deposit and are prepared for the inevitable paint splash and dash between tenants

How easy is it to chase through the courts for unpaid rents?

I'm a builder (about to retire) and all the maintenance is within my abilities and I am happy to do the vetting of tenants, so additional costs should be containable

What does the team think?


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## Elyles (Aug 30, 2012)

davids0865 said:


> OK thanks for that, not a rosy picture exactly I take on board the company issue, doesn't apply in my case, and I'm only considering long term rental The issue of resale is moot, as long as the property is rented why would you want to sell? There will always be good and bad tenants, but as long as you have a damage deposit and are prepared for the inevitable paint splash and dash between tenants How easy is it to chase through the courts for unpaid rents? I'm a builder (about to retire) and all the maintenance is within my abilities and I am happy to do the vetting of tenants, so additional costs should be containable What does the team think?


 Although a Psychologist, I built homes in the US with friends as well as rental property. The Spanish architecture may baffle you as it has me.


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## snikpoh (Nov 19, 2007)

davids0865 said:


> There will always be good and bad tenants, but as long as you have a damage deposit and are prepared for the inevitable paint splash and dash between tenants
> 
> How easy is it to chase through the courts for unpaid rents?
> 
> ...


I rent holiday lets as well as long-term lets. So I speak from experience ...

The damage deposit is, generally one months rent. This is not a lot when you consider the damage some tenants can do! Also, remember that if there are issues, it's likely that the last utility bills will not have been paid. That's (potentially) 2 months electricity and 3 months water (and gas maybe). Equally, the more savy tenants (illegally) use the damage deposit as the last months rent!

I would say it's virtually impossible to use the courts for unpaid rent - I tried and gave up. The waiting list with the judge was years!

I also do any repairs myself but they still take time and money.



How will you 'vet' the tenants? I check that they have jobs etc. but so many don't have contracts or if they do, these mean little when they loose their jobs.


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## mrypg9 (Apr 26, 2008)

Where can you buy a house or apartment for €50k that you can rent for €400 a month??

I've been a landlord in the UK and Canada. I would never consider renting property in Spain for all the reasons Snikpoh has given.


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## xabiaxica (Jun 23, 2009)

mrypg9 said:


> Where can you buy a house or apartment for €50k that you can rent for €400 a month??
> 
> I've been a landlord in the UK and Canada. I would never consider renting property in Spain for all the reasons Snikpoh has given.


That's a good point. Those renting at around that figure here would sell for upwards of 250,000€


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## Elyles (Aug 30, 2012)

xabiachica said:


> That's a good point. Those renting at around that figure here would sell for upwards of 250,000&#128;


 here only around € 150.000 for 400 a month rental. In Huesca around €300 a month


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## davids0865 (Apr 12, 2016)

snikpoh said:


> I rent holiday lets as well as long-term lets. So I speak from experience ...
> 
> The damage deposit is, generally one months rent. This is not a lot when you consider the damage some tenants can do! Also, remember that if there are issues, it's likely that the last utility bills will not have been paid. That's (potentially) 2 months electricity and 3 months water (and gas maybe). Equally, the more savy tenants (illegally) use the damage deposit as the last months rent!
> 
> ...


Wise words, and I could only vet as you do.


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## davids0865 (Apr 12, 2016)

mrypg9 said:


> Where can you buy a house or apartment for €50k that you can rent for €400 a month??
> 
> I've been a landlord in the UK and Canada. I would never consider renting property in Spain for all the reasons Snikpoh has given.


All I have done is look at rental sites, noted the rates and then looked on the sales sites for similar properties and their advertised costs.


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## davids0865 (Apr 12, 2016)

xabiachica said:


> That's a good point. Those renting at around that figure here would sell for upwards of 250,000€


That is a frankly mad yield of less than 2%, why would anyone do that??

Are you sure your numbers are correct?


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## davids0865 (Apr 12, 2016)

davids0865 said:


> That is a frankly mad yield of less than 2%, why would anyone do that??
> 
> Are you sure your numbers are correct?


In fact if you can point me in the direction of such a deal I will rent and not buy, live in a great home and hold my capital.


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## xabiaxica (Jun 23, 2009)

davids0865 said:


> That is a frankly mad yield of less than 2%, why would anyone do that??
> 
> Are you sure your numbers are correct?


I'm positive. I know what I pay in rent & I know what similar properties nearby have sold for. I also know what nearby properties rent for. A much bigger apartment than mine, maybe 50m back further from the beach has within the past few weeks, been rented for 50€ less a month than I pay.

13 years ago I was paying double for a slightly larger apartment in the same building, with the same landlord. Rental rates have plummeted. 


All I can guess is that it's a good (enough) return because they have owned the property since it was built - so paid very little for it.

Why would someone buy now in this area to rent out long term? I guess they wouldn't. 


Sales prices in Jávea, although they dropped, didn't really plummet as they did in other parts of the country - & have started to recover in the past year or so.


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## Pesky Wesky (May 10, 2009)

And this is why you come on to forums like this to find out stuff before you come over


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## Elyles (Aug 30, 2012)

xabiachica said:


> I'm positive. I know what I pay in rent & I know what similar properties nearby have sold for. I also know what nearby properties rent for. A much bigger apartment than mine, maybe 50m back further from the beach has within the past few weeks, been rented for 50 less a month than I pay. 13 years ago I was paying double for a slightly larger apartment in the same building, with the same landlord. Rental rates have plummeted. All I can guess is that it's a good (enough) return because they have owned the property since it was built - so paid very little for it. Why would someone buy now in this area to rent out long term? I guess they wouldn't. Sales prices in Jávea, although they dropped, didn't really plummet as they did in other parts of the country - & have started to recover in the past year or so.


 sales prices here did not plummet as well due to he huge Basque second home market. Although you can purchase a small piece of junk still for under 130.000, most decent properties start around 150.000. We bought a very livable flat here for 125.000 and sunk money for improvements into it. We were renting a 78 sq mtr place a fair walk from the city that was relatively new for 400€ a month. It was on the market for 140.000. A friend is renting a 2br flat close to our city center for 550€ a month. Go figure!


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## mrypg9 (Apr 26, 2008)

I doubt you could buy much for under €150k round here. A yield of 2-4% on property is actually a good return these days.
Sensible landlords are more concerned with a reliable income stream from good tenants rather than short- term big money from fly- by- nights with all the hassle involved. People can disappear owing rent and utilities and are in most cases untraceable, not that you've much chance of getting your money back by going to court.
When we left the UK we sold all our properties and decided to invest the capital and rent. We have lived in a very nice house with pool for several years. Our first year the rent was €2300 a month plus utilities. Gradually over the years it has reduced to......€1000. The house is currently 'worth' around €400000 to €500000 .
Why this more than 50% reduction? Because our landlord had problems with previous tenants and lost more than €10 k euros in unpaid rent and utilities as well as damage to the property.
We are worth the smaller rent as we pay it annually in advance and not only take care of 'our' house but improve it.
This is the reality of renting in Spain. We know....because like Xavia..we live here.


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## davids0865 (Apr 12, 2016)

Pesky Wesky said:


> And this is why you come on to forums likethis to find out stuff before you come over


Absolutely right, but I can't hide the fact that I am staggered by the info coming out, It defies the simple research.

Oh well, start working on plan B


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## davids0865 (Apr 12, 2016)

2 bedroom apartment for sale in Spain, Formentera del Segura, Alicante, Spain

Apartment in Ciudad Quesada, Alicante for long term rental


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## mrypg9 (Apr 26, 2008)

davids0865 said:


> Absolutely right, but I can't hide the fact that I am staggered by the info coming out, It defies the simple research.
> 
> Oh well, start working on plan B


'Simple research' has to be backed by facts on the ground to be of any value.
A search of realtors in different areas would give an idea of property prices. It can be seen that in this area you will get property for €50k but not the kind you'd find tenants able to pay €400 a month for.
You can also find typical rental prices just as easily by googling the area that interests you.
That gives you an insight into reality as experienced by those living here, landlords and tenants.


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## mrypg9 (Apr 26, 2008)

davids0865 said:


> 2 bedroom apartment for sale in Spain, Formentera del Segura, Alicante, Spain
> 
> Apartment in Ciudad Quesada, Alicante for long term rental


You need to know a lot more than you get from reading this kind of thing.
Like....what is the surrounding area like, is it the kind of area Brits would want to rent in, what is the average income of people, Spanish and immigrant, in that area.
Coastal cities like Benidorm, Alicante, Benalmadena, rank amongst the poorest cities in Spain. This often comes as a surprise to those who haven't visited them.
It's a fallacy to think all British immigrants to Spain are 'wealthy'. Many people retire here on low pensions and consequently tight budgets. The slightest fall in sterling against the euro can be a blow to those on low incomes. Very many Brits have gone back to the UK in the past few years.
Unemployment is high in Spain, around 25%. Income levels are low, even for professionals.
Buying cheap property to rent is imo a very risky investment.


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## xabiaxica (Jun 23, 2009)

Here - there's one in Jávea for sale at 80,000€

apartment for sale




Looks good doesn't it?

It's on the edge of the red light district (yes even in Jávea  )


I know someone renting in that building - I can check, but I'm pretty sure she pays about 250€ a month


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## snikpoh (Nov 19, 2007)

mrypg9 said:


> Buying cheap property to rent is imo a very risky investment.


... damn! Now you tell me


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## davids0865 (Apr 12, 2016)

xabiachica said:


> Here - there's one in Jávea for sale at 80,000€
> 
> apartment for sale
> 
> ...


OK, feet on the street is the only answer, but all the previous post have been helpful.

I think between you I have been convinced that it probably is best to look elsewhere for retirement income, I'm still coming though:fingerscrossed:


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## mrypg9 (Apr 26, 2008)

davids0865 said:


> OK, feet on the street is the only answer, but all the previous post have been helpful.
> 
> I think between you I have been convinced that it probably is best to look elsewhere for retirement income, I'm still coming though:fingerscrossed:


Because the laws relating to tenancies here in Spain are favourable to tenants and also because we didn't want the hassle of dealing with property repairs and problem tenants in a foreign country (bad enough in the UK) we sold our UK and Canadian properties when we left the UK initially for Prague in 2005. We invested the sale proceeds and in Prague and in Spain have rented very pleasant houses, each with 'grounds' and pool. 
No worries about repairs and the freedom to move whenever we feel like it...just a letter giving notice and a phone call to the removal company.
Now that's what I call relaxed retirement....
Returns on savings prudently invested have been more than would have been gained from renting properties, not to mention the time and money spent keeping them in good repair plus the risk of rogue tenants.
The other advantage is that your capital isn't tied up and can be made liquid should you wish to for any reason.


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## davids0865 (Apr 12, 2016)

mrypg9 said:


> Because the laws relating to tenancies here in Spain are favourable to tenants and also because we didn't want the hassle of dealing with property repairs and problem tenants in a foreign country (bad enough in the UK) we sold our UK and Canadian properties when we left the UK initially for Prague in 2005. We invested the sale proceeds and in Prague and in Spain have rented very pleasant houses, each with 'grounds' and pool.
> No worries about repairs and the freedom to move whenever we feel like it...just a letter giving notice and a phone call to the removal company.
> Now that's what I call relaxed retirement....
> _Returns on savings prudently invested have been more than would have been gained from renting properties_, not to mention the time and money spent keeping them in good repair plus the risk of rogue tenants.
> The other advantage is that your capital isn't tied up and can be made liquid should you wish to for any reason.


Care to give me clue, I am an inexperienced investor.


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## mrypg9 (Apr 26, 2008)

davids0865 said:


> Care to give me clue, I am an inexperienced investor.


We rely on a good Fund Manager...like most investors, I guess.

We receive enough to fund the lifestyle that suits us here in Spain.


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