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Running a bar in spain info saught

Running a bar in spain info saught

Old Aug 26th 2012, 12:08 pm
  #16  
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Default Re: Running a bar in spain info saught

Originally Posted by 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.
For bars and holiday rentals you would have to look for the very popular destinations, the ones you have seen very cheap are being sold like that for a good reason, no-one wants properties there because there isn't any money to be made. Many of the bars we saw when we lived there had different owners every year, many 2 lots in the same year, everyone thinking they could make it work when othere couldn't. They were wrong..

I would suggest that, if you can do it, move over to an area you have researched regarding the tourist activity, rent a property for 6 months in winter, and spend the time looking round, seeing just how m,any people are there in November etc, then using an independent lawyer have any place that takes your fancy checked out, see the books, check on the legality of licenses etc, get the fine details of anywhere thorougly checked before parting with any money. Bureaucracy is rife and you will have to get used to going from pillar to post over the details.
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Old Aug 26th 2012, 1:33 pm
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Default Re: Running a bar in spain info saught

Originally Posted by mikelincs
For bars and holiday rentals you would have to look for the very popular destinations, the ones you have seen very cheap are being sold like that for a good reason, no-one wants properties there because there isn't any money to be made. Many of the bars we saw when we lived there had different owners every year, many 2 lots in the same year, everyone thinking they could make it work when othere couldn't. They were wrong..

I would suggest that, if you can do it, move over to an area you have researched regarding the tourist activity, rent a property for 6 months in winter, and spend the time looking round, seeing just how m,any people are there in November etc, then using an independent lawyer have any place that takes your fancy checked out, see the books, check on the legality of licenses etc, get the fine details of anywhere thorougly checked before parting with any money. Bureaucracy is rife and you will have to get used to going from pillar to post over the details.
Both sets of books !!
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Old Aug 26th 2012, 2:11 pm
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Default Re: Running a bar in spain info saught

Considering how much property prices have falling and are predicted to continue falling is buying anything in Spain now a good idea? Go an search sites like alphrooms.com and see how cheap rentals are now from basic bed and breakfast up to very nice 4*

It's going to be a very long haul for Spain to recover and to be honest I can't see you getting a good return on your investments for a decade or more.

As for bars? Thousands are up for sale. On mainland Spain you need to take a lot of money in a comparatively short season to survive let alone thrive, do you want to work fifteen or sixteen hours a day seven days a week? If you really do fancy a bar look at the Canary Islands, the weather is good year round so perhaps your chances are better there.

Take into account you don't speak the language (?), don't know the system etc is Spain for you?

If you have cash and want to do long term property rentals the UK will give you a better return; I'm not talking about buying in London but you can pick up smaller propterties for £70k+ which will give you 6% or more return and property laws in the UK are far more 'solid' than in Spain.
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Old Aug 26th 2012, 3:15 pm
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Default Re: Running a bar in spain info saught

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
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Old Aug 26th 2012, 3:55 pm
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Default Re: Running a bar in spain info saught

Originally Posted by frigilianafreddy
From your smilies I guess that you don't really believe that!

This is an article about the changes - whether they will help remains to be seen.

http://elpais.com/elpais/2012/08/24/...44_048589.html
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Old Aug 27th 2012, 1:57 am
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Default Re: Running a bar in spain info saught

I do speak spanish. I wouldnt consider doing any more than visiting a country if i didnt speak the language. Lately i have been studying business spanish, because i was only able to communicate in every day spanish. Though in the USA, i did learn quite a bit of spanish for construction work, as i have employed mexicans from time to time. They dont exactly speak Castilian, but its pretty close.

If i wanted to start a good profit making business in Spain right now, i would start a british undertakers. All these retired people, getting to the end of thier lifes in Spain, with just enough of pension to keep them going, an family that need the inheritance. Given the choice, transport the body back to the UK for burial, (cutting into the inheritance) or bury in spain, the family will tell you "oh our father loved spain, it was his wish to be buried here"

The predictions on Spanish property, is its going to fall another 25%, but predictions are just that. The bad point, and only worrying point i see, is the spanish population, is in decline, that is bad for everyone.

The banks are offering properties right now, at a sixty percent discount, on what it originally sold for. Buying from a bank, is as good as it gets in spain, you know, their will be no debt following that property. You know, that you are going to be the rightfull owner, and you can have confidence in all that.

I have made money out of every rental i ever bought, firstly i bought cash (well in later days i was able to) So the bank is not making any money, secondly, i dont use an agency to rent them. If you take a mortgage, then use an agency, the bank is making money, the agency is making money, and all the responsability and worry, is on your shoulders.

Prices can take a long time to go up after the market bottoms out. In the USA, florida took the biggest hit, but the prices there, are slowly increasing now. The prices in most other places in the USA are not. In florida its increasing, because its a huge holiday home market, the high prices of seven years ago, stopped people from buying, now the canadian, europeans, americans, are jumping in, and buying the houses and condos that they couldnt afford seven years ago.

My own theory as to why bars in spain fail. Its profitable for the owner of the freehold, for it to fail, so if he keeps the rent high enough, their is a good chance it will fail. The people that buy the lease, dont cut their ties with the UK, they keep their house in the UK, that gives them a quick exit when needed. They pay rent on a bar, and rent on a house, and they rent a house that they wont be able to afford, due to unreal expectations of the bar. They have never run a business before, and if you havent run a business in the UK, starting one in spain, is insane. They dont speak the language, they dont know about book keeping, and they have never had to have any business sense. They then hire people to run the bar for them, which effectively makes them, the freeholders agents, and now everything in is favour of the freeholder, so the staff get paid, the free holder gets paid, the bills get paid, and the lease holders get nothing.

People make the same mistake in Florida. I went to a bar there, (not long opened) Maybe eight or nine people in it. I stood at the bar, talking about sailing, to the owner. His two staff were standing about until someone ordered a drink, and he did nothing. He could have easily gotten rid of one of the staff, and did some work himself, He could have gotten rid of both the staff, and just hired a part timer to come in at the weekend. When we back a year later it was closed.
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Old Aug 27th 2012, 4:29 am
  #22  
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Default Re: Running a bar in spain info saught

Originally Posted by AL1492
I do speak spanish.


My own theory as to why bars in spain fail. Its profitable for the owner of the freehold, for it to fail, so if he keeps the rent high enough, their is a good chance it will fail. The people that buy the lease, dont cut their ties with the UK, they keep their house in the UK, that gives them a quick exit when needed. They pay rent on a bar, and rent on a house, and they rent a house that they wont be able to afford, due to unreal expectations of the bar. They have never run a business before, and if you havent run a business in the UK, starting one in spain, is insane. They dont speak the language, they dont know about book keeping, and they have never had to have any business sense. They then hire people to run the bar for them, which effectively makes them, the freeholders agents, and now everything in is favour of the freeholder, so the staff get paid, the free holder gets paid, the bills get paid, and the lease holders get nothing.
I dont think that any of that is true at all, certainly not for the majority and I dont think its profitable for owners to have their premisies empty and deteriorating for months/years on end, which many are. they have to compete with the 100s of other empty bars owned by others - whole rows of boarded up bars dont make money for anyone

The reason so many bars fail is because there are too many of them, too much competition, too much red tape and bureaucracy and not enough customers, There is also an element of the larger chains being able to come along and keep prices unrealistically low as they have more buying power with suppliers.

You need to go over and do some proper "on the ground" research. The US business model and views dont really apply IMO

Jo xxx

Last edited by jojojojojo; Aug 27th 2012 at 4:33 am.
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Old Aug 27th 2012, 7:55 am
  #23  
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Default Re: Running a bar in spain info saught

Hi All
I think ALI is quite correct in his analysis of how the freeholders of bars work in Spain, I see the same very cynical approach on the CDS ( my part of Spain).

They want the leaseholder to fail, so they can resell the lease for an ingoing figure ranging from a few 000 to 30 000.The rent paid seems to be a bonus.

Until business gets sooo bad that no one will pay in the ingoing, rents will not fall to realistic levels. This happened during the 90s recession, and the bars began to have a renaissance, with realistic rents encouraging more and better long term bars.

With the internal deflation currently being inflicted on Spain, it is only a matter of time before the ingoings and rents will have to fall to make business possible, I fear there will be many more bar leasholder casualties before that happens.


regards
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Old Aug 27th 2012, 8:39 am
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Default Re: Running a bar in spain info saught

We have quite a few brand new units on a new plaza that have been unlet for several years because of silly rent demands.
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Old Aug 27th 2012, 8:51 am
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Default Re: Running a bar in spain info saught

I dont know if its a canarian thing or a spanish thing but certainly here we have large warehouses empty that people want to rent but not at the prices advertised. The owners will not reduce the rent and so they stand empty. People have tried to explain to the owners that this seems an unprofitable way of doing business but they see it as that you are trying to rip them off by offering a lower rent.
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Old Aug 27th 2012, 9:03 am
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Default Re: Running a bar in spain info saught

Originally Posted by AL1492

If i wanted to start a good profit making business in Spain right now, i would start a british undertakers. All these retired people, getting to the end of thier lifes in Spain, with just enough of pension to keep them going, an family that need the inheritance. Given the choice, transport the body back to the UK for burial, (cutting into the inheritance) or bury in spain, the family will tell you "oh our father loved spain, it was his wish to be buried here"
I suspect that most brit retirees, when they start getting very ill, suffering from a terminal illness, would move back to the UK for family reasons, and don't forget the Spanish way of death and funerals are totally different from UK and USA. Suspect the legalities of setting up such a business might be complicated.
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Old Aug 27th 2012, 9:18 am
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Default Re: Running a bar in spain info saught

Originally Posted by AL1492
If i wanted to start a good profit making business in Spain right now, i would start a british undertakers. All these retired people, getting to the end of thier lifes in Spain, with just enough of pension to keep them going, an family that need the inheritance. Given the choice, transport the body back to the UK for burial, (cutting into the inheritance) or bury in spain, the family will tell you "oh our father loved spain, it was his wish to be buried here"
Originally Posted by mikelincs
I suspect that most brit retirees, when they start getting very ill, suffering from a terminal illness, would move back to the UK for family reasons, and don't forget the Spanish way of death and funerals are totally different from UK and USA. Suspect the legalities of setting up such a business might be complicated.
My own experience of the funeral directors in Spain and the UK has shown that it is cheaper to be cremated in Spain than in the UK. The Spanish funeral is over and done with within two days whereas in the UK it is normally a week before it can be achieved. It is not a good money earner, it is a reliable and constant source of income but the financial investment and the legalities is probably daunting.

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Old Aug 27th 2012, 10:27 am
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Default Re: Running a bar in spain info saught

Some very good points, and I too dont understand, why owners of commercial property will not reduce rents to get the place rented. I see it here in the midwest. I knew someone that opened a pool hall, and he told me, that it just wasnt making it, the utilities were too high, and their was no negotiating on the rent. June 2011 he closed, and the place is still empty. Its a awful lot of money for the owners to be losing. If I owned the place, i would be thinking of offering it, first six months at half of a reduced rent.

I think its good advice to go and stay in spain for a while. Last time i was there, i was in Santander Bilbao. Which gives a very different picture of Spain. Its all well dressed locals, going to cafes in the evening, buildings, that are a mix, of new and ancient, and factories, where the south coast, seemed to be all brand new hotels, english bars, and shirtless twenty something men from the UK.

I did get told years ago, when i was on the south coast, that, a lot of people moving to spaing, from northern europe, were moving inland, to get away from tourist areas. Is that true?

I think i am certainly going to take the risk on at least one property, for renovation. I may do a bit more research into the holiday rental market.

I have noticed regarding bars and cafes, that their are a lot, with leases going from only a thousand euros to ten thouand euros. I saw several cafes, with leases in selling for less than four thousand, and I have also noticed, a big selling point seems to be if the place runs with no staff. Saw a cafe for i think it was 3000 for the lease, same owners for seven years, husband and wife, no staff. Saw a bar for less, that had been shut for three months (which means the license should still be ok) said it was run by husband and wife, no staff.

I wouldnt really be selling up in the states right now, but divorce is kind of pushing the issue. The properties i bought, i didnt buy at the bottom of the market, but pretty close to bottom, but my plans with them, were to always keep one empty for renovation, and keep the rest rented, which is what i did, so i will make money on the flip, but not on any increase in the property market. The rental income on them, basically paid for the renovation.

I wanted to do something similar in spain, because i got quite a decent living out of it. With banks in spain, selling off properties at sixty percent below what they originally sold for, just to get rid of them, you cant really lose, the majority of property owners, will just hold onto their properties, and refuse to reduce the price of them, then as the market starts back up the way, demand for homes increases, and people start to sell at the price it was before the collapse, then the properties that had sixty percent knocked off them go up by sixty percent.

The UK, property prices cant collapse, because the law says if you buy a property, and it gets repoed by the bank, and the bank auctions for less than you owe, then you are still liable to the bank for that amount. So people will do anything, to avoid reposession. In the USA, people just walk away, and once the bank has the property, it has no claim against the person who took out the loan. So when values dropped, and people found, they were paying a 200k mortgage on a property only worth 100k, they just walked away, even though they could afford to pay the mortgage.

I dont yet know the system in spain, but it seems to be the same, that the you can just let the bank have the property back, and they have no claim against you. I am not 100% on that, but its the impression i am getting, which would mean, properties have more to fall, as the recession bites.
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Old Aug 27th 2012, 10:28 am
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Default Re: Running a bar in spain info saught

Originally Posted by MaryJones
I dont know if its a canarian thing or a spanish thing but certainly here we have large warehouses empty that people want to rent but not at the prices advertised. The owners will not reduce the rent and so they stand empty. People have tried to explain to the owners that this seems an unprofitable way of doing business but they see it as that you are trying to rip them off by offering a lower rent.
I think the problem is that many people made a lot of money 1990 to 2007. They simply don't need to be commercial. They think they can afford to wait until the market picks up.

I am interested in a villa. Advertised at €380K. I'm only interested at €300K. The spanish owner (who has 4 similar properties) cannot see that he is getting €300K. His view is that he is "giving me" €85K. Cheaper to rent than buy at some prices as the poster earlier alerted me.

This is very different for the banks who are highly motivated to sell. Problem is that there aren't any repo's for sale in areas i'm interested in. I was impressed however with the Banesto (I think it was that bank) prices
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Old Aug 27th 2012, 10:31 am
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Default Re: Running a bar in spain info saught

you can just let the bank have the property back, and they have no claim against you.
NO!

To my CERTAIN knowledge, they pursue you - at least if you move within the EEC. They have a claim on any assets, theoretically worldwide.

I think it is the case in the USA, maybe.
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