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Living abroad tips and hints for money savers

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  • droopsnout
    droopsnout Posts: 3,620 Forumite
    I'm with the Spanish!
    Much of the social history of the Western world over the past three decades has involved replacing what worked with what sounded good. - Thomas Sowell, "Is Reality Optional?", 1993
  • missile
    missile Posts: 11,774 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    mooser wrote: »
    The rental return is guaranteed for nine months of the year

    I would suggest you check this guaratee VERY carefully. There are many shoddy estate agents who will make all kinds of promises to make a sale - just like in the UK? :rotfl:

    I know of one in Guardemar who took deposits for houses in the morning, went bankrupt in the afternoon and set up under another name in Almeria the week after :eek:
    "A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
    Ride hard or stay home :iloveyou:
  • missile
    missile Posts: 11,774 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    droopsnout wrote: »
    I'm with the Spanish!
    me too:T

    For those who get frustrated with the spanish laid back life style, please be advised mañana does not necessarily mean "tomorrow", it means "not today"
    "A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
    Ride hard or stay home :iloveyou:
  • droopsnout
    droopsnout Posts: 3,620 Forumite
    Even here in SW France, it tends to mean, "Not this week. Might be next week. But don't get excited. But we will do it! Honest! Eventually. Don't be impatient. It's really important that I talk to my friend here ..."
    Much of the social history of the Western world over the past three decades has involved replacing what worked with what sounded good. - Thomas Sowell, "Is Reality Optional?", 1993
  • lessonlearned
    lessonlearned Posts: 13,337 Forumite
    10,000 Posts Combo Breaker I've been Money Tipped!
    Have noticed a couple of postings about rentals.

    As a retired property consultant both here in the UK & several EU countries including Spain, may I offer the following tips. (It may save someone getting their fingers burned).

    1. Beware of "guaranteed rentals". Is the "guarantee" verbal or does it form part of the builder's or promotor's contract. If it is part of the contract then you just might be ok. (see next note re my hesitation). If it is verbal then ignore it - it's probably just a "hook" to get you to sign up and is worthless.

    2. You should also be careful about a contract which guarantees rental income (usually the guaranteed period is finite 1 or 2 years say).

    It sounds great but it could mean that you will pay more for the property than it is actually worth. This could have a knock on effect on your profits when you come to sell the property at a later date.

    Please remember the builder or promotor is not being nice or generous - it's a business deal. They are simply using the guaranteed rental contract as a sales aid. Remember all sales aids/marketing ploys/discounts/extra goodies/furniture packs etc will be factored into the purchase price.

    I cannot stress this enough so I will repeat it. The builder or promotor is not giving you anything, one way or another you will have to pay for the priviledge of having a guaranteed rental contract.

    Needless to say, if you question this it will probably be denied - but please remember that old saying "There's no such thing as a free lunch" ).

    I know that the two points above make me sound incredibly cyncial, but after almost 18 years selling property I've developed my own little mantra - "Not all sharks are found swimming in the sea". (Caveat Emptor - Buyer Beware)

    3. You should not rely on hypothetical rental income to fund your purchase or meet your mortgage payments. You could come seriously unstuck unless you have enough ordinary income or substantial savings to cover shortfalls and void periods.

    4. It is certainly the case that there are now many areas, not just in Spain and France, but also newcomers such as Cyprus, Bulgaria etc where supply far exceeds demand for rentals.

    I know this sounds harsh but my view is this - if you need rental income to enable you to fund your purchase then you probably can't afford it.

    Holiday rentals are OK to help with running costs ie rates, maintenance charges etc but are not reliable enough to meet loans or mortgage payments.

    If you are looking for an investment vehicle which requires a mortgage then it is probably safer to stick with a UK Buy to Let. Realistically, holiday home rental income should be regarded as a nice little bonus or pocket money and should not be relied on.

    Sorry if I sound like a prophet of doom and I certainly don't like to crush anyone's dreams. However, I always explained the pitfalls to my clients and they always appreciated my honesty and realism. Just be careful.
  • droopsnout wrote: »
    I'm with the Spanish!

    Si, claro, y me!
    (AKA HRH_MUngo)
    Member #10 of £2 savers club
    Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton
  • droopsnout
    droopsnout Posts: 3,620 Forumite
    Sorry if I sound like a prophet of doom and I certainly don't like to crush anyone's dreams. However, I always explained the pitfalls to my clients and they always appreciated my honesty and realism. Just be careful.
    I think you could save a lot of heartache by continuing to tell people all this. Thank you for posting it.

    By coincidence, I received this message this morning from a close friend who does run a B&B here with some success. It concerns a couple who stayed one night with him this week:

    "Guests had moved last summer to the Canary Islands. Did not buy there but thought they would like to set up a business. Not sure what, but have decided that it's not the place for them so have come here to look instead. Think he said he wanted to open a B&B plus shop, but has never been to the area before."

    Time after time, we have had people coming to stay with us who have not thought things through, don't know the area, haven't done their homework, and think that what they see on telly is all there is to it.

    Living abroad CAN be wonderful, but you need to go into it with your eyes - and mind - wide open.
    Much of the social history of the Western world over the past three decades has involved replacing what worked with what sounded good. - Thomas Sowell, "Is Reality Optional?", 1993
  • missile
    missile Posts: 11,774 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Not any different in the UK, where people with no previous experience, sell up move to the south coast invest their life savings in a B&B or a pub. They have this strange notion that they will earn lots of money and are surprised that they end up working 18 hours a day to make ends meet.
    "A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
    Ride hard or stay home :iloveyou:
  • droopsnout
    droopsnout Posts: 3,620 Forumite
    missile wrote: »
    Not any different in the UK, where people with no previous experience, sell up move to the south coast invest their life savings in a B&B or a pub. They have this strange notion that they will earn lots of money and are surprised that they end up working 18 hours a day to make ends meet.
    You're quite right, and I take your point. But doing the same thing in a foreign country amplifies matters hugely.

    Different language, laws, culture, procedures, systems, expectations, climate, etc., make it very different practically speaking.

    And the fact that you are suddenly a long way away from your relatives and friends makes it very different emotionally, too.
    Much of the social history of the Western world over the past three decades has involved replacing what worked with what sounded good. - Thomas Sowell, "Is Reality Optional?", 1993
  • missile
    missile Posts: 11,774 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    That may seem obvious to you (and I). Sometimes it is just common sense which appears to be lacking?
    I suppose one could argue some people are more adventurous and may relish a challenge :-)

    9 to 5 in saburbia may be safe, but it can be boring. Conversely a new job, new country, new life is certainly not for everyone
    "A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
    Ride hard or stay home :iloveyou:
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