# Advice about buying property in the Costa del Sol for a younger family



## Skywalker11 (Aug 22, 2012)

Hi,

I'm thinking of buying a 2 bedroom apartment in the Costa del Sol region. My preference, for now, is in Fuengirola. 

We are a relatively young family, myself being 44 years old, and my two boys are under 7 years old. 

We live and work in the UK. However, we have EU passports. We want to use the apartment any time the boys have the school break. An added bonus for me is that I would be able to work from there during that time. 

Our budget is around EUR 220,000 and we won't need a mortgage. 

We are purchasing this also as an investment and will try to rent it out while we're away. A big motivation for us is to be able to escape the often dreadful British weather and generally low quality of life here in the UK.

I will appreciate it very much if you can point me to any areas in the CDS region where renting out won't be a big problem and it's good for families like mine.


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## kaipa (Aug 3, 2013)

I would be very careful if you are buying as an investment. Property in Spain in the holiday zones do not really rise in price as they do in UK. There are a vast amount of properties with and increasing number of new builds every year. Supply easily outstrips demand. High end builds in small desirable areas can do well but your average villa in the Alicante region does well not to depreciate in value. Most Spanish will buy off plan with expensive new builds if they wish a reasonable profit but that can be risky. Remember that buying costs automatically amount to between 10- 13% of property price so you do well just getting your investment price back after 5 years. Renting wont generate any substantial income as everyone is doing it so again supply outstrips demand and you need to pay tax on all rents plus maintain wifi and all the other necessities all year. If however you simply want a holiday home then at least you have alot of choice.


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## Barriej (Jul 23, 2012)

Would echo what kappa has said and to add that, if you want to rent out you will need a tourist licence. This means the place has to be at a certain size and comply with fire and safety regulations (its not easy anymore) 
Also you mentioned visiting during the school break, so you've just lost the best money earning part of the rental you want to do anyway.

Cant comment on values in the CDS but here inland of Benidorm, Altea, Calpe we have a 3 bed 2 bath flat in a small village and prices are dropping.
New in 2005 they were €105,000 we purchased in 2019 at €78,000 and there are two for sale now at €71,000 (we have a 10% property tax here as well)
A friend has their place for sale in Albir and they want €210,000 as thats what it cost them 15 years ago, all the local agents have said they will be lucky to get €175,000 and Albir is a nice touristy town.
The prices in the next town which has a decent immigrant population (30%) has seen prices stay the same for the last 10 years..

Only tourist Urbs and coastal homes seem to be ok and even Benidorm has seen price drops over the last couple of years.

By all means get a holiday home, but don't expect it to be a money generator like property in the UK (in fact if it were me I would be looking at the Uk or even parts of Ireland if I wanted to invest in property and have a holiday home)..
The other thing to consider is (and this is going to seem strange) why bother? With €220,000 you can have lots of life altering holidays in some of the best parts of the world, the kids will thank you more than going back to the same place a few times each year.. (my two saw Australia, Parts of the Caribbean, half a dozen EU countries, lots of the Uk and the eldest now lives in Australia as she liked it so much when we travelled)

End of the day its your money and your choice, we moved here as its a cheaper base than the Uk to go travelling from (and then came covid)...


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## Skywalker11 (Aug 22, 2012)

Barriej said:


> By all means get a holiday home, but don't expect it to be a money generator like property in the UK (in fact if it were me I would be looking at the Uk or even parts of Ireland if I wanted to invest in property and have a holiday home)..


Well, I was thinking about investing all my money in a house in the UK. However, in the area where we live (Maidenhead), the prices have gone crazy. I think this is the WORST time to invest in a property in the UK. It's just not sustainable and prices will go down. Covid and WFH are slowly going away, Brexit is still there, the war in Russia, the looming rate hikes, etc. On top of that, I don't have any desire to put all my savings in a shoebox, with the UK having probably the worst housing in Europe...


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## tardigrade (May 23, 2021)

Florida is a good option; albeit a little far but you can improve your spanish just as easily as Spain.


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## Roland_O (Oct 17, 2016)

Yes, it seems likely that the UK is at peak madness, so I can see your reasoning.

The property market in Spain seems more sane. They have taken the hit of the Financial crisis and things seem to be improving now. 

But if you want to invest in Spanish property, then buy where the locals want to live. Buy where the economy is doing well. Buy where the young are building careers. Don’t buy in the holiday wastelands. 

So Madrid, Barcelona, Valencia, or any of the big northern cities (Zaragoza, Vitoria, Burgos etc.,.). OK the first two are probably out of your price range but the others should work. Buy somewhere with good public transport links. Buy somewhere designed to appeal to the Spanish.


Sent from my iPad using Tapatalk


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## Overandout (Nov 10, 2012)

A holiday home in Madrid? Really? 

Well, 220k gets you a pretty decent 2 bed apartment in Madrid, as long as you don't want to live in an emblematic street or plaza in the town center, and don't mind missing out on having a pool.

And its true that if you buy now you probably wouldn't lose much money as we are still almost at the bottom of the market, although prices have risen a bit in the last few years.

The good thing about holiday lets in Madrid also is that they are less seasonal, people take city breaks all year round so you might be more likely to get some income from it when you're not using it. 

But to suggest buying a holiday home in Madrid seems rather odd. Most Madrileños leave the city in summer for as long as possible!


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## Skywalker11 (Aug 22, 2012)

Overandout said:


> A holiday home in Madrid? Really?


I agree it will be odd buying a holiday home in Madrid. It's maybe OK from an investment point of view, but hey if I was only thinking about the money, I would've probably invested all my money in the UK...


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## Skywalker11 (Aug 22, 2012)

tardigrade said:


> Florida is a good option; albeit a little far but you can improve your spanish just as easily as Spain.


It's not really an option for us at this point. The distance and the cost of getting there are just too high...


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## Skywalker11 (Aug 22, 2012)

Barriej said:


> The other thing to consider is (and this is going to seem strange) why bother? With €220,000 you can have lots of life altering holidays in some of the best parts of the world, the kids will thank you more than going back to the same place a few times each year.. (my two saw Australia, Parts of the Caribbean, half a dozen EU countries, lots of the Uk and the eldest now lives in Australia as she liked it so much when we travelled)


Well, the summer break here is one and a half months. Going to these countries for that period of time would involve some serious money!


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## kaipa (Aug 3, 2013)

Skywalker11 said:


> Well, I was thinking about investing all my money in a house in the UK. However, in the area where we live (Maidenhead), the prices have gone crazy. I think this is the WORST time to invest in a property in the UK. It's just not sustainable and prices will go down. Covid and WFH are slowly going away, Brexit is still there, the war in Russia, the looming rate hikes, etc. On top of that, I don't have any desire to put all my savings in a shoebox, with the UK having probably the worst housing in Europe...


Prices might slow in uk but it is unlikely there will be a massive drop for the sole reason that there is a supply shortage and people always need housing. During the 2007 crisis there was a dip in uk market but within a year prices bounced back. In Spain there is never a bounce back - all that happens is they find areas ripe for new developments and people invest in new builds. As Barrej says you can get alot of holidays for the amount of money you will probably lose on depreciation so why bother unless you want to live in Spain. My ex had our 3 bedroom duplex valued after 5 years and it is pretty much the same price. Remember also that when you sell in Spain even as a non resident you will pay taxes on any profit.


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## Skywalker11 (Aug 22, 2012)

kaipa said:


> Prices might slow in uk but it is unlikely there will be a massive drop for the sole reason that there is a supply shortage and people always need housing.


Well, I don't buy this argument that because there is a shortage of houses in the UK, the prices will keep rising. It's mostly what people can afford. We all have been spoiled with super-low interest rates in the last 15 years or so. But this is inevitably coming to an end now. I still believe that right now is the WORST time to invest in any property in the UK.


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## Overandout (Nov 10, 2012)

Skywalker11 said:


> We all have been spoiled with super-low interest rates in the last 15 years or so. But this is inevitably coming to an end now. I still believe that right now is the WORST time to invest in any property in the UK.


But this is exactly the same situation in Spain, where you are prepared to invest, knowing that around 15% is lost from the outset on tax and bureaucracy... 
I feel that the driving factor for you is the holiday home in the sun more than the financial incentive. We are all telling you that Spain is NOT a good place to invest in bricks and mortar, at best you won't lose much.
If you want a place in the sun, buy it, go for it, but don't try to kid yourself into thinking its a good financial investment.


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## Megsmum (Sep 9, 2012)

Invest in property in Spain is an oxymoron. We are involved in selling houses, well my husband. Rarely does anyone but a home here for an investment. Holiday home, to live etc but not an investment.


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## kaipa (Aug 3, 2013)

I know of many young Scandanavians renovating apartments in torrevieja which they buy very cheaply. They seem to think that they can then sell them on at a profit. Unfortunately they often struggle to break even as they quite simply fail to understand the workings of the Spanish market. The people making money are the constructors. Spanish folk value an apartment based on the mean value of all the apartments irrespective of reforms. It's all about size, location, parking. They wont pay more because it looks like something out of an ikea catalogue. They simply dont view property in this way - as an aesthetic object with values on style. This is why so many foreigners get their fingers burnt when it comes to property investment. Spanish think family family family. That is how they value a property.


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## tardigrade (May 23, 2021)

The same thing happens in france were they do not consider a home purchase an investment but a home - everyone needs one..
It is a UK/US and maybe Canadian mind set that doesn't translate into mainland europe...


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## Barriej (Jul 23, 2012)

kaipa said:


> I know of many young Scandanavians renovating apartments in torrevieja which they buy very cheaply. They seem to think that they can then sell them on at a profit. Unfortunately they often struggle to break even as they quite simply fail to understand the workings of the Spanish market. The people making money are the constructors. Spanish folk value an apartment based on the mean value of all the apartments irrespective of reforms. It's all about size, location, parking. They wont pay more because it looks like something out of an ikea catalogue. They simply dont view property in this way - as an aesthetic object with values on style. This is why so many foreigners get their fingers burnt when it comes to property investment. Spanish think family family family. That is how they value a property.


Agree, happened here, when the blocks were first built in 2005 it was nearly 100% British owned, some of them had wooden floors fitted, the walls flattened (they have a grain effect like wood chip paper) and uprated A/C a couple even have electric boilered central heating (no gas bottles allowed here) and uprated double glazing (which is one thing that I would like to change as the standard are worse than useless). 
When it came to selling most of them thought that it would work the same as in the Uk but no. 
Prices here are per sq metre and thats it...

We looked at six apartments spread over the two main blocks and they were all for sale by Brits. 
The ones on the front get the sun all day long and thats horrid in the summer, these were priced around €15k more than the one we ended up with which only gets the full sun from around 2pm in the summer. And some three years later one of them is still for sale because the owner still thinks its worth what they paid in 2005...

For us I expect to stay here maybe another six years or so and then move again, if we get what we paid then OK, if not well it is what it is..
I would rent again, we did it at the last place in the Uk because we couldnt afford to buy there.


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## kaipa (Aug 3, 2013)

Barriej said:


> Agree, happened here, when the blocks were first built in 2005 it was nearly 100% British owned, some of them had wooden floors fitted, the walls flattened (they have a grain effect like wood chip paper) and uprated A/C a couple even have electric boilered central heating (no gas bottles allowed here) and uprated double glazing (which is one thing that I would like to change as the standard are worse than useless).
> When it came to selling most of them thought that it would work the same as in the Uk but no.
> Prices here are per sq metre and thats it...
> 
> ...


 Oh yes totally forgot about which direction a flat faces. In the southern Spanish wont buy totally south facing- as the heat in July and august is unbearable if a small flat with balcony. You literally cannot live in them without closing blinds all day and leaving windows open at night. However us foreigners think that having the sun all day is a plus and expect that to be reflected in price. Similarly they like to be facing the pool but forgetting how absolutely horrible it can be with noisy families sitting all day below your balcony talking and shouting at excited kids.


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## Lynn R (Feb 21, 2014)

We have a south facing ático. In the summer the sun is too high in the sky to come in through the windows and by the time it would be low enough the sun has moved over to the west so just shines across the terrace from right to left. In the winter, however, we do get the sun coming into the living room from around 11 am to 4pm which is great for keeping it warm (and light) indoors. We don't keep the blinds and windows closed in summer except on exceptionally hot days (and I mean over 40C, we only get a handful of days that hot each year), just keep the blinds over the terrace pulled across to provide some shade. We only need to use air conditioning on those over 40C days, and a ceiling fan in the bedroom makes it comfortable enough for restful sleep. The other 19 flats in our block are all Spanish owned and likewise south facing so it obviously didn't deter our neighbours from buying. The other block in our community faces north, directly opposite us, and I often think how gloomy and cold it must be indoors in the winter.

In terms of prices, a 2 bed ático (but smaller than ours, with only 1 bathroom and no garage space or external storeroom which ours has) has just been advertised in a block around the corner from us, for 15% more than we paid just under 5 years ago. Still not enough for us to break even if we sold it, given the buying and selling costs involved - as others have said those costs make property in Spain much less of an investment. But we don't plan to sell and are not in an area where there are many holiday rentals.

An apartment (not an ático) in the other block in our community was first advertised for sale a couple of months ago and has already gone. Another apartment in that block also sold very quickly last year. None in our block have come up for sale since we have been here. The apartments were built 25 years ago.


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## webmarcos (Dec 25, 2012)

Overandout said:


> A holiday home in Madrid? Really?
> 
> Well, 220k gets you a pretty decent 2 bed apartment in Madrid, as long as you don't want to live in an emblematic street or plaza in the town center, and don't mind missing out on having a pool.
> 
> ...


It's not just that buying prices have increased in Madrid (a far cry from 2010-2014 when doomsters were moaning that prices would never recover), but that flat/bedsit rentals have soared. The Facebook groups are full of auxiliaries/students and teachers moaning on how difficult it is to find accommodation term-time in Madrid.
So it's the opposite scenario to the coastal areas. Flats/rooms are a lot easier to rent out from Sept/Oct to May/June (and it's almost impossible to find a place to rent in October if you've just landed). The low season tends to be July and August, although there is a demand now for summer tourists and the city no longer completely closes in August.


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## webmarcos (Dec 25, 2012)

Skywalker11 said:


> Well, I don't buy this argument that because there is a shortage of houses in the UK, the prices will keep rising. It's mostly what people can afford. We all have been spoiled with super-low interest rates in the last 15 years or so. But this is inevitably coming to an end now. I still believe that right now is the WORST time to invest in any property in the UK.


You may be right as regards big city places, but the demand in future (imo) will be for coastal and countryside towns, with adequate transport links for those two days in the week in the London or Leeds office


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## Overandout (Nov 10, 2012)

webmarcos said:


> It's not just that buying prices have increased in Madrid (a far cry from 2010-2014 when doomsters were moaning that prices would never recover), but that flat/bedsit rentals have soared.


 In the city center maybe, but where I am, prices are still pretty reasonable. We have a small flat which we rent out and the rent we charge now doesn't even cover the mortgage payment!
This idea that landlords are getting rich off high rents might be true for the lucky ones who bought when the market was low and have a high stock of properties in central locations, but the average Joe who bought in the residential areas before the 2007 crisis has lost hundreds of thousands of Euros and keeps losing every month!

The problem for the teachers and nurses isn't that rents are too high. there are loads of properties for less than 700€ which for a western capital city is a bargain. The problem is that these people are taking home barely more than 1,000€, so everything is expensive.


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