Urgent Help Needed Please

Nationalist

I'd be inclined to offer the Spanish villa for sale at a significant discount from market value to get a quick sale. That looks like your only way out. Then pay off the UK loans and get the UK flat back into positive equity, then sell it as well and both of you move to Thailand for a couple of years--the UK housing market is on the cusp of crashing, not being here when it happens is a good move.

If you could get clear with even £100K in cash you'd be well-placed to come back in a couple of years when everything will be much cheaper.

surrey-ed

Rachman, thanks. Lots to take on board there as with most replies... To give some detail.

Villa was bought in 2004 for £280k with a £185k mortgage. The £95k deposit/fees/costs was found in the way of loans, equiry released from the flat, credit cards (stupid we know but at 21 we thought it was our only option) We then spent a lot more money doing the place up, nearly 80k, be it that we did decorate extravagantly and a lot of money could have been saved there.

The villa was valued after the work was done and valued at £450k (oct 07), currently on market for £350k. The villa is easily worth £400k, its 100m to the beach, has 6 bedrooms, private pools and sleeps 14. In 3 years properties will increase as they are building a Puerto Banus style Marina and Port 300m away with a €200m grant. The neighbours sold for £600k last month after 14mths on the market and it needs a lot of work.

It is a great business to, it is now finished so rentals have started coming in and that is £1700 a week for 8 weeks guaranteed and then £1000 a week outside of the peak season which is fully booked. However it is still not enought to keep us paying our debts and we dont need the stress any more.

We live in a tiny 1 bedroom flat, do not lead extravagant lives and go out once a fortnight if that.

My ideal would be a quick sale on the villa and to use the equity to pay off debts and get back into positive equity on the flat so we can rent that whilst we are away and pay debts with the money we will save on accomodation/living costs in Thailand.
We just want to find the best solution to clear debt we have racked up and to be able to go to Thailand not worrying about this not being sorted, we do not want to avoid paying just dont know the best solution.

zarazara

sell sell sell!

Rachman_2

surrey-ed wrote: »

The villa was valued after the work was done and valued at £450k (oct 07), currently on market for £350k. The villa is easily worth £400k, its 100m to the beach, has 6 bedrooms, private pools and sleeps 14. In 3 years properties will increase as they are building a Puerto Banus style Marina and Port 300m away with a €200m grant. The neighbours sold for £600k last month after 14mths on the market and it needs a lot of work.

That reads like you are trying to convince you, not me. The villa is worth what someone will pay for it - not what an EA values it at or what you think it's worth. If you can't sell it for £350K, it's not worth £350K. your comments indicate how you got into this mess - please take a step back and look at what you are saying.

Edit to try to be helpful....

You bought your place in Spain with 1005 borrowed money. All of the money you spent on it was borrowed. It's (realistically) worth less than you owe on it overall - you can do a balance sheet reconciliation of UK vs Spain, but your Spanish gaff is all debt.

In the UK, you seem to have managed to pay off/acquire equity of at least £40K in the intervening 3 years - which is good. That's all you've got left, being blunt. So take it - sell Spain asap - if it's not shifting by late Spring, bite the bullet.

Do you mind telling me (and I appreciate it's a rude question), but precisely what were you thinking - did you think we'll buy Spain with borrowed money, do it up and flog it for half mill, easy ? How, at 21, did you get to that way of thinking ? Was it the telly or parents ?

I should also say that at 24 with £40K in the bank, you would still be in a lot better position than most people your age. And (disappointingly I suppose) you will have learned a lot to not do the same thing next time and you have plenty of time on your side.

poppy10_2

Time to cut your losses and run, methinks. I'm sure that villa isn't worth anything near 450k now, and the value will likely be plummeting like a stone day by day.

Trollfever

It is a great business to, it is now finished so rentals have started coming in and that is £1700 a week for 8 weeks guaranteed and then £1000 a week outside of the peak season which is fully booked.

So:

£1700 x 8 = £13,600
£1000 x 40 = £40,000

Total gross income = £53,600

If you have evidence to support those figures an investor will buy it for around £500,000 to give them a yield of over 10%.

Rachman_2

Trollfever wrote: »

So:

£1700 x 8 = £13,600
£1000 x 40 = £40,000

Total gross income = £53,600

If you have evidence to support those figures an investor will buy it for around £500,000 to give them a yield of over 10%.

I suspect that's sales patter. If he's getting £30K a year revenue, out of it - assuming 50% occupancy and his 8 weeks, he'd be laughing - it would cover its own costs PLUS it would cover a lot of the other debt service. But clearly it's not doing, so I am taking those numbers with more than a pinch of salt.

Walter_J

surrey-ed wrote: »

5 bed villa in Spain worth £450k with a £180k mortgage. ON SALE - Bad news being that the villas in the area take 2 - 3 years on average to sell.

Total crap!

If a property doesn't sell in a few weeks then it's overpriced.

Drop the price until you find the true market value. Then **** off to Thailand!

UK007BullDog

I wrote a year ago that the Spanish market is declining. And its getting worse as also the northern europeans are pulling out. Are you advertising nationwide and also internationally? The odd rich of the ex eastern block countries are buying the odd nice property.

Do you have a link to the property? Would be interesting to see it.

mummytofour

ValuableYouth wrote: »

As Rachman suggests, you've been a silly pair of !!!! knockers.

Not sure that is the most helpful advice, is it?