AL1492

I know their has to be some threads here on this, but havent really found any new ones.

I am interested in moving to Spain. I have been living in the USA for the last six years, where i have several rental properties. I am just about to put them on the market, and will be looking for a new country after i sell. As an EEC citizen, i though Spain would be ideal.

I have had rental property for years, and dabbled in some other businesses. Construction, car sales, car repairs. What my outline plan is. Would be to travel to spain, buy a couple of apartments to use as holiday rentals. I want to get away from long term rentals, i have been dealing with those six years in the states, and five years prior to that in the UK.

I also would like to buy a townhouse for renovation. I have seen properties online, that would be very suitable for all these purposes, that would be within budget.

Another thing i have also seen a lot of while looking for property, are bars, (leashold which i hate the idea of) Some of them are being sold on a lease very cheaply, with low rents, as low as 600 euro per month.

I know its a recsession, and europe is in a huge downturn, but to me, thats always a good time to start a buisness, as its cheap to get into, and you dont have more custom than you can handle, so it gives you time to learn.

I have been kind of toying with the idea of a bar, over the past few days. I know, that the hours in summer, would stop me doing any renovation work on a house, but then, you try doing renovation work on a house with no A/C in summer, in the midwest of the USA its a killer.

I do intend to stay in spain for quite a while, and intend to put down some roots.

Can anyone give me any advice on bars, and holiday rentals.

Rosemary

As Concierge for the Spanish section of BE I would like to say hello and welcome.

BE is a very large expat website, so if you have problems finding your way around we have concierges who will try to direct you. The moderators for the Spanish forums are Mitzyboy and Fred James, moderators are there to ensure that the site runs smoothly within the rules of BE. Problems and complaints should always be addressed to a moderador who will look into the matter and deal with it efficiently and fairly. Our members who post in the Spain Forums are friendly and helpful with a wealth of knowledge of the issues of living in Spain. At the top of the page you will find a quirkily named thread called Free Beer which is full of important and useful information. Hope you enjoy your time participating in the forums.

Please let me know if you need any further help.

Rosemary

cricketman

Sure, there is a massive oversupply of them across the whole of Spain

Spain is the country with the second most numbers of bars per resident, and there are 1 milion empty properties and millions more that are empty part of the year round

Also being resident in Spain will mean you will have to declare your whole worldwide income to the Spanish taxman, look carefully at the US-Spain double taxation agreements

If I had a lot of investments/assets the last thing I would do is risk them on the Spanish property rental market or on opening a bar. Very easy way to lose the whole lot!

Have a look at something like segundamano.es that offer holiday apartments for 200 euros per week or 40 euros per night. Doesnt sound like there's a lot of money in it to me. Long term rental yields run at just 2%, you'd be better off sticking the money in a savings account

frigilianafreddy

Where do you get that from?

I rent to holidaymakers and get a gross yield of 6% (2 bed apt in Frigiliana). That reduces to 5% after expenses. Then there's tax so about 3.8%. I must admit i'm the only person i know who pays spanish tax on rental income though.

I'd assumed i'd get more for a long term let. Not so?

cricketman

Depends on the area and the property of course. I'm talking about the properties I know and have rented in

In Benalmadena the property we rented is up for sale, for 400k, our monthly rent was 800 euros i.e. 2% yield. Even worse here in Oviedo. Property "would cost" 500k to buy, we rent for 800 euros. Rental yields were better in Barcelona, we paid 1200 euros for a flat worth 400k so 3% yield, not including expenses

Your yield of 6%, is that based on how much you paid many years ago or how much it would cost now? 6% is pretty much the point at which it is worthwhile renting out a property although it depends on how you're financing the debt of course

frigilianafreddy

I was talking about return on my investment made 10 years ago. I'm a cash buyer. You can pick up a 2 bed apartment, fully furnished and ready for holiday lets for €130K add on all the other costs and maybe €140K. Say, £110K I reckon you can get between £5K and £7K gross a year from holiday lets.

Actually looking at Frigi/Nerja estate agents just after you posted i see what you mean. A townhouse offered at €210K, but the next door one renting at €600pm. Another on at €385K and one up the road renting at €800 pm.

Most bizarre.

I can only think it's because "sellers" are waiting for better times and in the meantime getting a rent that pays the mortgage they took out many years ago. But that doesnt explain the 2 examples i've just looked at as they have only been built 3 or 4 years ago.

jackytoo

Many are finding it difficult to get any tenants on the CDS. Some properties have been empty for years. So many have been built there is no demand for them. One friend has been trying to rent out an apartment for over a year without success, there are also about another 20 up for rent in the same complex.

AL1492

I am not looking at prices anywhere near the figures being mentioned here. I have downloaded a list of hundreds of apartments on the coast, all on sale for under 40,000 euro, i have seen quite a few advertised for under 20. I havent read the whole list, but i have seen their are some three bedroom apartments.

I wouldnt consider 100,000 euros for an aparment, to rent out at holiday season. You might get 500 euros a week, you might only get two weeks a month, during a four month season. 4k, then you have costs, utilities, cleaning, maintenance repairs.

I also dont see that their is going to be much difference in rent, between a 100k aparment, and a 30k one. Their is only so much, a tourist will pay to rent an apartment.

One property I have where i am in the midwest, is a three apartment conversion, that i paid a little over 30,000 dollars for, and it pays me over a 1000 a month, but I have spent a lot on renovating it, and with only one water meter, I have to pay for water.

cricketman

I cant even imagine what those apartments that are so cheap must look like

They must be in a really bad area and a run down state - with so many cheap holiday lets availabale across Spain then why would anyone choose yours?

Domino

can understand all that is being said here, there are differences of return which must always start at the price paid for a house.
in the UK I have a property which I bought on mortgage (now completed) at £32,000, lived in it for over 10 years, I am getting £500/month before agency fees etc.

Whilst Jacky's statement has merit, I would suggest that some properties that are not moving because they are totally in the wrong place. There are lots like that in Spain.

The operative is Location, Location, Location !!

Would suggest the OP makes a short list of places to be, investigate initially from the internet, where some sites tell you how long the property has been on the market, and then Visit.
If it is a place where you want to live, it could well be where other people want to live, albeit renting.

one site I visited today said there are over 92,000 properties in Spain, but that is just that site - there are many many more to choose from.

frigilianafreddy

Yes, they're for sale at that price because they're in locations which will never rent out.

I've told you my experience. In 7 years minimum rental income £5,400. maximum £7,200. And that's with us using it for a couple of months as well.

You need to do serious research or find someone successfully renting these low end apartments.

Pocaloca

Hi there!

Sadly a deep recession, which might go on for years to come, isn't a good time to open a bar! Thousands of people dream of this, invest their savings and time, and go broke a year later. Unless you are a in a really good location (in which case the rent will be a LOT higher than €600) and have something special to differentiate yourself from the competition, you are on a hiding to nothing. 16-hour days, high overheads, an unbelievable amount of red tape, and very little return!

Hepa

I live in the Canary Islands, somewhat different here to the Iberian part of Spain.

I have a friend who earlier this year opened a previously failed Bar Restaurant.

Him and his wife work in the kitchen, he employs a full time waitress/ bar manageress and when needed part time staff.

The business has really taken off, however the three persons working full time, are locals, have years of experience in the catering industry. The food is very good, the premises are spotless and customers return time and time again.

Perhaps you should research the Canary Islands, there are seven, and there is year round sunshine so we do not have a closed tourist season.

AL1492

I have been up all night, looking on the internet at apartments. A lot of them are very nice, lots of photos, lots of them are bank owned. Some are in new buildings, some in old buildings and in all different locations.

As to the reason, why would someone book a holiday home for a week in a not too desirable area of coastal Spain, is simple, because they dont know what areas are best. First time i ever booked a place in Spain, we ended up in a part of costa dorado, that had very little there, but an oil jetty, and a few shop, and an expensive taxi ride to the nearest place with some bars.

We then took off up into the mountains to hike from mountain refuge to mountain refuge, we wanted to spend about four days in the mountains, to get there, was a train, a bus, then hitch hike. We had a guide book and maps, and we planned our route from village to mountain refuge, then two more mountain refuges before getting back to another village and back to cosat derado. Guide book told us, first mountain refuge we were heading for was state of that art, we got a bed and a meal, electricity went off at 8pm. We wondered what was state of the art about it, the next two refuges didnt even have flushing toilets, you had to do it outside, put it in a bag, and take it down the mountain with you. And these refuges were bustling with british tourists, (the university types though) So why did we all pay money to sleep on ten man beds (everyone in one long bed next to each other) and not even have a flushing toilet, because its what we were offered.

I rented a house in Florida for a week once, great photos of it, didnt know the part of Florida too well, it was about 20 miles south of where i wanted to be, but we couldnt find anything there. We rented a house for six hundred dollars for the week. We were lucky to get it, becuase on the website it showed you availability of every rental, and their was nothing available on the beach, we got this one, it was five miles from the beach, in a housing estate, it did have a pool, their was not one other holiday home in the street, we were miles from any of the tourist areas, so why did we rent it, because we didnt know, you dont go and view holiday accomodation, then go home, and book it.

As for renting properties out, first house i rented out, i used and agency for a year, they charged too high a rent, charged me too much money, it took them too long, to find the first renter (only stayed six months) then it was empty for too long before the second renter. When i started doing it myself, i had someone moving in the day someone else was moving out.

Even long term renters seem quite safe in spain now, as they have changed the eviction process, and you can get non payers out quite fast.

Rosemary

As Concierge for the Spanish section of BE I would like to say hello and welcome.

BE is a very large expat website, so if you have problems finding your way around we have concierges who will try to direct you. The moderators for the Spanish forums are Mitzyboy and Fred James, moderators are there to ensure that the site runs smoothly within the rules of BE. Problems and complaints should always be addressed to a moderador who will look into the matter and deal with it efficiently and fairly. Our members who post in the Spain Forums are friendly and helpful with a wealth of knowledge of the issues of living in Spain. At the top of the page you will find a quirkily named thread called Free Beer which is full of important and useful information. Hope you enjoy your time participating in the forums.

Please let me know if you need any further help.

Rosemary