Khrushka

Help please folks

I'm looking to buy a modest 1- or 2-bed flat on Mallorca to use as a holiday home and also to let out for the rest of the time.

But I've only been there once so I don't really know where to begin.

So here's my question: if you had 85 000 euros to spend on a property in Mallorca, what area would you go for? Ideally not too far from the coast. Willing to consider anything from central Palma to cala millor.

Any pointers whatsoever would be massively appreciated. I'm planning a trip in May to arrange some viewings...

amideislas

Welcome in advance to our little rock in the med.

You aren't going to find much that's all that impressive for €85K - especially on or near the coast. But there are plenty of banks who would finance a €200K property with €85K down.

You can buy a sort of "wreck" - an old finca that hasn't been maintained for 30 years, and proceed to remodel it. These are perhaps the best deals you'll find, but you won't find any located on the coast for that kind of money.

Still, it's worth keeping in mind that the distance to the "coast" is measured in minutes from virtually anywhere on this island.

There are some bargains on flats to be had in the cities - and a few bargains to be had in resort areas where there was a lot of construction which had to be stopped due to the crisis, or other limitations. I know there are a lot of unsold/unfinished flats on the east coast around Porto Cristo, Calas de Mallorca, Cala Romantica, Manacor, and along the north coast, and whilst there are many in Palma, the asking prices are still a bit too high IMHO.

Mallorca is a lovely place to be. It's very diverse - from mountains to sea, from city action to wild back-country, we have it - you can have whatever you want within 100Km. It's only a couple hours' flight from most of Europe, but this island is too large to get island fever. So, it's a great balance.

The first order of business for you will be to get yourself "legalised" with a NIE number and all the necessary legalities. There are plenty of threads on this forum discussing that.

Following that, you need to spend some serious time and meet a lot of people and asking a lot of questions. There are several major real estate brokers, and there are 1000's of small ones. The small ones can offer much better deals than the major ones, because they have much lower overhead, and are hungrier for your business, but you need to take care to avoid getting shafted with anyone you deal with.

If it's obvious you aren't just another naive newbie foreigner with some extra cash, your chances of getting a fair deal are much greater. The only way to show this is to be armed with lots of knowledge about the market and the process. Otherwise, beware, it's fair game to conduct the business like a currency exchange (exchanging currency from yours to theirs).

Good luck...

Ami

Khrushka

Ami,

I've read your immense previous posts and this is really above and beyond, massive thanks for going to the trouble.

Thing is, various sites are showing up really reasonable digs in and around the resorts for that money. I'd be more than willing to take on a refurbishment project on a cheap property.

Very interesting that you think prices still have some way to fall. Could be very valuable intel, will keep that in mind.

The mortgage idea is definitely a tempting one, and the kind of place you can get for 200k is pretty fantastic. But I don't want to be tied to mortgage payments for a decade, that's the only thing.

Thanks so much for the advice on where to go from here. I will stick to it to the letter, and post updates on my progress for anyone who's interested.

Sausages

Just on that, and not wishing to impinge on the thread, is lending fairly ok at the moment then? So if I was buying somewhere a fair bit cheaper than that, with a similar deposit, good credit rating, future proof income and easy affordability it would be pretty much nailed on to get the loan?

cricketman

Depends what you call proof of income, but yes

The general rule is that you need to pay 20% deposit plus all taxes and fees. So you would need around 60k euros in cash to get a mortgage on a 200k property

And they lend on about 4 times income, so you would need to be earning 40k per year to get a 160k loan

Rotor

If 85k is your total budget you may get a shack


http://comprar-piso.nuroa.es/busqued...&order=3&way=1

avocados

100% mortgages are readily available for anyone that can provide proof of sufficient income. Don't believe all the doom and gloom. The only people that get declined are people working in the black, simply because they can't prove income.

Properties for 85k in Mallorca - a quick search in Idealista brought up 1200 props of 1 or 2 bedrooms and under 100k, mostly decent properties and certainly good enough for holiday homes and renting out.

So as you can see there is loads of choice.

Khrushka

Are these bogus then? What do you guys think?

http://www.solviaproperties.com/resu...S&mapa=N&web=O

Sausages

Thanks for that. The reality is that in my case it's on the mainland and the loan to value is about 30% and I am well withing the 4 times income scenario, don't need that much. I'm just worrying really because I'm waiting for an answer! Seems to take ages!!

Rotor

I think they look awful but then again you'd never get me to live in an apartment .

amideislas

Well, like I said, you won't get much for €85k. But it depends on what you want.

He said he wanted to rent it. Short term holiday rentals can be lucrative, but non residents are taxed to death on holiday rentals and there's lots of bureaucracy. Besides, tourists prefer coastal rentals, so you need to stay near beaches to be successful.

Long term rents are very low. You can rent a liveable apartment for as little as €200. So as a rental investment you need to carefully consider market conditions.

Also, there are complex building restrictions, and getting permits can be expensive and daunting, so be sure your dream flat is actually eligible for renovation without paying a local ajuntamento employee a few grand under the table.

Also, all of the properties in your link are in Palma. Palma is inner-city and not a beachy or otherwise desirable holiday destination, and these are very residential, most likely inhabited by not exactly the most desirable of types, and certainly not a desirable location for holidaymakers.

Try lindacasas or Mallorca MietImmobilien or some of the other really small immobilien (sorry, both sites are in german) . They usually have good bargains, and are honest, and have access to properties they don't even have listed. I'm sure they speak English. The reason I mention them is that Linda showed us a nice 100m2 place directly on the beach at Cala Mendia a few years ago - under €100K - we almost bought it, but after reviewing finances we decided against it. But now I wish we would've taken it.

EDIT: I took another look, and it appears that there are some good bargains on the link you posted. It appears to be a repossession sale.

codex70

Just a note, but isn't it unlikely that you'll get a permit to rent out an apartment or communal building as a holiday let. That would leave you renting it illegally, and that could lead to very large fines (at least it has in the canaries). The only way round that is if you're just renting to friends and family.

amideislas

You can still get Holiday Let permits here. Subject to 40% tax and lots of petty regulations.

Khrushka

amideislas, codex70 thanks guys for your pointers. So you know, this project is more a quick getaway home for me and my family than an investment opportunity. I'd view rental income as a bonus.

amideislas, can't seem to find any properties on those sites for some reason, can't find where to click.

amideislas

Click "Kaufen" (for sale). You may have to browse a bit to find bargains - and all are negotiable. Also, many people are strapped for cash, so the possibility exists to negotiate a private deal to put up say, 50% and pay the rest monthly.

Also try segundamano.es. Lots of private sale listings there (sorry only Spanish)

Good luck...