Hidden costs of buying a property abroad

Scooby_Man

ok, lets take it from the start again and not work with half right assumptions.

the fact is i dont know exactly what type of property and where. i'll have a lump sum shortly and was toying with the idea of buying a house outright abroad - somewhere where i go on holiday and business a lot - and that tends to be spain. it will be like a gift to family and friends in the way of a place to stay when they are on holiday, it could also act as a little earner if i chose to let it out every now and again. finally, given that property is a good investment, it should provide good returns over the coming years.

my question was, if i did buy a house, what are the ongoing costs? these dont have to be precise, but lets say a typical property worth £100k, what would i have to pay and when? Given that there is a possiblity that the property could be empty for months on end, i didnt want to pay through my nose to keep it going. i wont be having any satellite/landlines etc.

let me know if you need any more info.

missile

You really need to be specific before anyone can advise you.

If I were to ask you that question about buying a property in the UK, how would you answer it? Having been here a lot you will appreciate that Spain is a huge country and just like UK property prices vary. What £100 grand buys in London is not the same as rural Scotland.

To give you some idea. With £100 grand you might be able to afford a small appartment in Costa Brava, a villa in Costa Callida or a large finca with several acres near Pamplona.

I would expect the running costs for a small holiday appartment on mainland Spain to be less than Ian W posted. However if you let to strangers who leave the aircon on 24/7 ......... and finaly do not assume property is always a good investment.

Scooby_Man

Ok lets say a small 100k apartment in Costa Brava. Lets assume its holiday home only (keep the let aside). It's bought in my and my wifes name. Year 1 we buy it, and its empty for the year. What are the typical costs we'd have to pay to keep it going for that year? I am assuming its some form of rates - tax, utility etc.

missile

There are no standing charges for gas or water so these would be zero. There is a standing charge for elecity "Potencia contratada" circa €100, SUMA circa €300, depending on which town for example Malaga is quite high. You might want to insure it circa €250, you might want a managed alarm system circa €480, you might want a fiscal representative circa €200........................ and you might want to thank me for my advice :A

RayWolfe

Don't hold your breath! ;-)

missile

RayWolfe wrote:

Don't hold your breath! ;-)

:rotfl: :rotfl: :rotfl: :rotfl: :rotfl: :rotfl: :rotfl: :rotfl: :rotfl: :rotfl: :rotfl:

Scooby_Man

missile wrote:

There are no standing charges for gas or water so these would be zero. There is a standing charge for elecity "Potencia contratada" circa €100, SUMA circa €300, depending on which town for example Malaga is quite high. You might want to insure it circa €250, you might want a managed alarm system circa €480, you might want a fiscal representative circa €200........................ and you might want to thank me for my advice :A

Thanks for the numbers

EdInvestor

A cautionary talethat may be of interest.

It was let for about 45 weeks a year

This seems extremely high - was it a long let to an expat or something like that?Albeit the Canaries has a very pleasant climate, attracting visitors all year, this seems exceptionally high occupancy for a holiday let scenario?

Conrad

I like investing abroad. Latest project is Mediterreanean Morocco a few kilometers across the sea from Spain. Vast high end resorts unmatched anywhere in Spain, yet same flight times.

Year round season and you get property ON GOLF AND ON BEACH, this is virtualy impossible to find in Spain unless you have over £1m to spend.

The best resorts are the 6 Government and King backed 'Plan Azure' sites.
More Brits bought in Morocco than Portugal last year - no wonder what with Portugals chilly wet winter climate.

The luxury and facilities of these Plan Azure sites really is light years beyond anything in Spain. Also strict building control for example no further property can be built for 15 years around these sites. Saidia is the biggest site and has the Meds largest most up to date marina (just been flooded).

75% cheaper than Spain but rising rapidly. Please note some property is quite expensive but on a like for like basis is still 75% cheaper.
People think Saidia is the new Cote Du Azure - only with better facilities.

http://lejardindefleur.com is a British developer here

Ian_W

EdInvestor wrote:

This seems extremely high - was it a long let to an expat or something like that?Albeit the Canaries has a very pleasant climate, attracting visitors all year, this seems exceptionally high occupancy for a holiday let scenario?

Nope, no long lets - occasional 4 weeker in winter but between Sept and May almost exclusively 1 week winter sun visitors. June, July & August almost always 2 week family hols which was when an empty week was most likely if the weeks didn't fall right.
Exceptionally high occupancy - Yep
I know many others who had pretty much the same experience though plenty more who only did 10-15, often the latter was because they apartments were poor quality, over-priced or both. Helps to do those figures if 30%+ of your guests are repeat visitors.
Still that's digressing as the OP is talking of only occasional lets.

Scooby_Man wrote:

I take it you used an agent? It is common for people to buy and just manage themselves? I mean if you're just doing occassional lets, could you arrange this yourself - or worst case, use an agent for the duration of the let.

We used an agent who also let the property at the start but after 3 yrs we just did private lets as we had the demand. You do need someone at hand to make sure cleaning and maintenance gets done and sorts any probs your guests may have. Some use ex-pats on an as and when basis but most proper agencies won't do "for the duration", least not where we were.
missile has filled in with the figures but we used a specific "holiday home" insurance, rather than a local one as it covers if the prop is empty for a while and if you have to cancel a guest because of something happening to the apartment. Google for it, the best/cheapest we found was with a firm called Schofields in Bolton. Don't know if you can obtain the type of home emergency cover you use for your UK BTL in Spain - somehow I doubt it.

It proved a very good investment for us and we enjoyed owning but the last couple of years we could only get out 2 weeks a year and spent a lot of time on things that needed doing to the apartment rather than holidaying so it was the right time for us to sell. If you decide to go for it - hope it works out as well for you.