Buying Apartment - The Real Value

Hi Shane, 

1. Before you step into your new apartment you will have Spanish taxes to contend with plus solicitors fees plus estate agents fees. These vary so you can ask them what they charge and then add about 20% just to keep you covered. If you are getting a mortgage for your new place in the sun then you have interest charges in which to contend. If you are transferring money from the UK then there is the exchange rate and commission fees to be paid. And the bad news is that's only for starters.

2. Let's assume at this stage that you've just got the keys of your new apartment and are looking forward to many holidays in the sun and perhaps some income from letting the place. Allow no less than €2,000 per year to cover apartment-complex charges, maintenance and property tax. 

3. You also have to pay for electricity, water, refuse, internet charges. (You're thinking "I haven't let out the place yet"). But, you've got a tenant to rent the place for a few months. You may have to pay estate agents fees and catch up with maintenance. Will every expense be coveredthen ? Answer:- Probably not.

Go back to the drawing board. Do the arithmetic. Are you sure you want to buy? Sorry for not posting probably what you wished to hear.

Hi Matthew - you sound like you regret buying a place abroad...

Shane

Hi Shane,

You've made a fair observation. Our purchase was investment (read my lips INVESTMENT) - It didn't work out. I am not going to pretend that ours was a good investment because it wasn't. Why pay a huge amount of money for a holiday home when you can rent @ €600 per month in the off season?  

Simple arithmetic doesn't tell lies. Never forget that. Apologies for being so negative; but you cannot argue with the truth - it's probably the only thing you cannot argue against.

Am I sorry I bought? Answer:- Not now, but for years I had regrets. And if anybody tells you something different just do the arithmetic - nothing beats hard figures regarding profit and loss.

Hi Shane,

I advise you to have a look at 'casas de banco' as they are fairly cheaper than the market price. Like Mathew said you have to take into account all the fees which is 8% and 3.5% if youre under 35... if youre buying as an investment for rent revenue its not worth it in my opinion because the income it will generate will be around 300-500 pm plus you have to pay taxes for the revenue which is around 20%... if its for a long term investmennt its the right time to buy as prices are very cheap at the moment and you will make profit in the long term... if that is the case you can rent it out from sep-jun to teachers in the area to cover your building and maintenance fees and you can enjoy if for the summer period

Hi,

Thank you for your email.

Matthew made some very valuable points.

My apartment purchase is not for rental income nor perceived capital growth.

I am looking for a decent apartment in a decent part of town.

How much are the apartments in Casas De Banco that you mention.

Thank you.

Shane

Hi Shane, 

Depending of the area and the facilities in the building... with no swimming pool from €50-60k and with from €60-80k... duplex or triplex from €100-150k... these are prices of casas de banco or people that are stuck and want to sell quick... selling is really slow at the moment so take your time until you find a bargain... take a look at idealista and milanuncios... type in casas de banco as there are loads on idealista as well as bank websites like bbva, cajamar, etc... and milanuncios under "particulares" (homeowners) instead of agencies as youre more likely to find a better price. 

I hope the info is useful.

Good luck

Hi Shane

I have an apartment in Vereda Golf, Roquetas de Mar. Selling prices there nowadays range from 180-300,000. We didn't buy it to rent out, rather to use during summers and family stay there throughout the year when they need a bit of sun. Other parts may be a little cheaper but Vereda Golf is a private complex with 4 pools, tennis courts and walking distance to beach. hence the price. There are some much cheaper properties available but they may not have those amenities. We bought it because we have children and it has a real family and community feel and is gated so the children can walk around and have a bit of freedom which they don't in London where we live. My sister and young family also bought a smaller apartment there and we spend our summers there together so ideal for that. They also rent out quite well (My sister enquired) if you are interested but you have to register for that. As others have said, take into account costs and taxes.  We have to pay monthly costs to cover the maintenance of the complex, insurance, water, electric and internet. Utility costs are very reasonable though and the internet cost is paused while we're not there. We were lucky because we bought the apartment from the bank (Casa de Banco)  which is what others are referring to and I think means repossessed as the development company who built them had gone bust so they were very cheap at the time. They have increased in value but that doesn't mean they sell easily. The selling market is slow, which is fine for us as we didn't buy for investment, per se and plan to spend lots of summers there. As I understand it, most apartment owners from the second phase of the complex did the same. 

Anyway, that's a lot of information - I hope it helps. If you're looking for something a little cheaper, you will without a doubt find it. There is a lot of choice, just comes down to personal preference in the end. All this talk is making me excited for the Summer! Can't wait to go back. Good luck!

Hi Shane we have only just bought this year in RDM. We have a two bed apartment on a small complex (27 apartments) with a swimming pool- not a huge pool  but enough for what we want. We have had some maintenance to undertake (a new bathroom & all new pipework) but feel it has been worth it. The price was €75000 but add at least another 10% on top for solicitors notaries etc. Our place is in the urbanisation area & because it is an older apartment is very roomy.  We bought for ourselves, not to rent so will not have any tax issues other than the purchase taxes. We were given a very good solicitor based in Almeria & RDM, who are multilingual so never had an issue With language. However the first thing you will need to sort out is your NIE & a bank account. The NIE is your national insurance identification number that is required to purchase a spanish property, along with a spanish bank account (we were advised to open an account locally to where we bought & were recommended Banco Sabadell. This took around 40 mins to open in branch - you can’t do this online). You can apply for the NIE in the uk from the spanish consulate -contact by e-mail as they don’t answer their phone- or via an agent such as mynie. Do bear in mind that all forms are in spanish & must be submitted in their original form. 
we love it in RDM & are very happy with our purchase. We used Zurimar estate agents as Antonio speaks several languages & was extremely helpful even after our purchse, arranging furniture delivery etc. 

As regards to local tax refuse & utilities (no gas) you would have to pay this anywhere in the world. Our solicitors arranged all the changeovers post sale. If you’d like to speak to us about any advice just get in touch - we were very lucky as we have a relative with a property in the area so they were able to pass on all their good advice. 

Good luck, Lynne & Dave 

Great info - thanks