Is now the time? Javea Spain.
 

Hello all,

Looks like a valuable forum!.

Can you help us please?

A bit of background.

A couple, still working. Planned for 50-55 retirement but might be 70 and working.

Having holidayed in the South-Of-France and Javea for many years. We have recently started to spend some more time around the Javea region for the last 4 years. Mostly due to the cheaper and longer season.

We have been visiting Javea for some 25 years. From Family holidays with our own Children and other family members. Now recently been lucky to enjoy trips with our Grandchildren and would like now to buy villa there.

Despite working silly long hard hours for many years, Everything we have touched financially has turned to mud. From Mortgages to Low Cost endowments, pensions, investments and re-mortgages to pay off tyrant business landlords.

Despite this, we have now managed to save hard and have a deposit fund of £80,000.

Are we aiming too high?

*Who will loan us money for a decent family €250,000 villa?
*IS Javea the Place to buy?
*What are the pitfalls?

We are aiming to buy and rent out, with a view to moving full time and start a small business or full time in retirement.

I speak some French and we both get by in vary Basic Spanish.

Not Getting any younger.

Any Help or advice appreciated.

TAM

Re: Is now the time? Javea Spain.
 

Hi!!

I've lived in Jávea for 10 years - & I'd say that yes, you should easily get a villa in that price range right now - however, although the rental market is still good - we've had a lot of families move here to rent in the past year, if you NEED the rental income it's never the right time

Re: Is now the time? Javea Spain.
 

The advice is generally to rent first, and even though you have been visiting for many years and have decided it's for you, I think I'd still be inclined to rent for 6-12 months first (taking in the winter and renting out your UK home), living there full time can be very different to holidaying. As many have found out to their cost. We have all met and read here of people similar to yourself, convinced it was for them, but for a variety of reasons have ended up returning to UK, poorer but wiser. Missing the grandchildren is often high on the list. I'm not a huge fan of Costa Blanca, especially the southern half, but we visited Jávea for several years and really enjoyed it. Like everywhere else up there, it started to get very built up, so we haven't been back. (remember when the bit between the town and Arenal was mainly scubland? ;)) Lynnxa says your 80k would get you a decent place, I've no idea of current prices but that surprises me, I thought even in these times you'd have to pay a lot more than that.

Re: Is now the time? Javea Spain.
 

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

Re: Is now the time? Javea Spain.
 

Hello,

Thank you for the replies.

My apologies, I should have mentioned.

We both still work full time in the UK. So moving there for 6-12 months is not an option.

TAM

Re: Is now the time? Javea Spain.
 

If you want to buy a villa for €250k using finance and have €80k cash, you'll immediately lose at least €30k on purchase costs, furniture, etc, leaving at most€50k to put down. I doubt you'll get credit for such a small amount. Also I doubt you'll make much money from rental income by the time you've taken into account service charges, mortgage costs, maintenance charges, taxes, etc. In fact you'll almost certainly lose money.

Re: Is now the time? Javea Spain.
 

Yes if you are working full time in the UK it really doesnt make much sense to buy in Spain

Come on some nice holidays instead

Re: Is now the time? Javea Spain.
 

Thank you Chopera.

We have £80k cash, so I guess around €94,000.

We do have some other monies due from sale of a Property we half own with our daughter and vehicles. So maybe push the funds to €120,000.

Then I guess most sellers with an Asking price of €250,000 must have at least 10% to give away.

If we budget €250k less 10% + Fees so say €247k less €120k deposit leaves just under 127 Euros to finance.

I have also heard the idea of buying a property with a limited company?

TAM

Re: Is now the time? Javea Spain.
 

The question is why do you want to buy?

Prices have dropped a lot but they are not a good investment because there are millions of empty properties. It will be hard to rent out and empty properties get destroyed by the sun in the summer and wind and rain in winter while you are not there

Then your holidays will be spent repairing the property

Keep your money in the bank and go and visit 5 start hotels!

That's what I do

Re: Is now the time? Javea Spain.
 

You should offer no more than 80% of asking prices in the current market. Be prepared to offer about 70% and walk away, unless it's a real bargain that you really want. If you can finance 50% then it might be self financing. But I doubt it'll work out as a good financial investment, but something that will provide enjoyment. Remember that maintaining a property and dealing with all the issues doesn't always provide enjoyment. I've been keeping an eye on Javea and could spend a similar amount, but every time I do the sums it doesn't make sense, given my situation.

Re: Is now the time? Javea Spain.
 

Agree, lots of people that can't sell are going down the rental route, they are all chasing the same market. Not saying it's the case of the OP, but there are people that buy relying on rentals to pay the mortgage, a risky strategy. Look at some of the rentals online, some do very well, others very badly, maybe some bookings in the summer and a very quiet winter. Friends of ours bought a holiday bolthole years ago, great, but like you say, they spent most of every visit painting, cleaning, running around chasing up the reams of paperwork, builders etc. Me, I'd rather save my money and spend it on some nice relaxed holidays. ;)

Re: Is now the time? Javea Spain.
 

We buy in the UK because the rental market is very limited, in most other EU states renting is quite normal and respectable.

Re: Is now the time? Javea Spain.
 

That's not true

Hardly anyone in Spain rents. It is down around 15-20%, compared to 25-30% in the UK

In Germany and France renting is popular

The difference between the UK and Spain is that Spain has a vast oversupply of properties

Re: Is now the time? Javea Spain.
 

France and Germany are not insignificant rental areas, you could also add the many ex pats in EU states who have seen the sense in renting. I believe that renting is also popular in large Spanish and Italian cities, I have a mate in Switzerland who states that rental is quite normal, as it is in Luxemburg.

Awaits CM's comments.

Re: Is now the time? Javea Spain.
 

What? Who cares what they do in Switzerland?

This thread is about Spain. You said rental is normal and more frequent than in the UK. You are wrong, it isnt. Do some googling if you don't believe me

Re: Is now the time? Javea Spain.
 

Renting is relatively common in large cities anywhere because you have lots of temporary and migrant workers who only plan to be in the city for a few years. However the Spanish are culturally a nation of home owners - they traditionally dislike renting and see it as wasted money, and tend to buy at the first opportunity (which might not be until they are 35 or so). Also property has traditionally been the most attractive investment to them (of course that's changing a bit now). Buying your first home is almost a "coming of age" ritual, and I know a few Spaniards who didn't move in until the place was completely decorated and furnished, down to the last teaspoon. They wanted it to be perfect for the big day they moved in.

Re: Is now the time? Javea Spain.
 

Absolutely

We were nagged by my in-laws that renting was throwing away money and why do it. I think the quote was "Why work hard all week to pay someone else's mortage". So much so that they have given us their old flat to live in for free ;)

Re: Is now the time? Javea Spain.
 

My original one that you rubbished wasn't, so do some reading and less sniping, banning man.

Re: Is now the time? Javea Spain.
 

Is it me but £250,000 seems an awful lot for a villa, especcially when only £80,000 is put down. How old are you? Nearing retirement? it will take more than a few years to repay a hefty £170,000 mortgage, I doubt if the rent you will receive will cover the mortgage repayments each year.The ware and tear, plus the maintenance costs and other bills and taxes are not to be ignored.:unsure:

Re: Is now the time? Javea Spain.
 

It's not much when you say it quickly, however there are plenty of decent 2 bed villas on the Costa Blanca for circa €200.000.

Re: Is now the time? Javea Spain.
 

£200,000 is also overpriced imo all depending......you can get something very nice for around £100,000 to £150,000....go inland a bit and there is a great choice of nice comfortable relaxing homes for under £100,000......that leaves you with plenty left over to enjoy living with. No good living in an expensive house you can't enjoy, with no money left to have a relaxing time without having to worry about every euro you spend. :)

Re: Is now the time? Javea Spain.
 

I said € not £, so I don't think that circa £170,000 for something that was possibly £300,000 pre crash is a bad deal.

Re: Is now the time? Javea Spain.
 

If you do your homework and research you will find something very nice for less than that not far from the beach, from costa blanca to costa del sol and other warm places. There are many distressed sellers out there, and there are a few who are not desperate to sell but will for their right price, some have been on the market for years, that must be telling something.

Re: Is now the time? Javea Spain.
 

I've done my homework, I just pointed out your currency error. I use the very same strategy in Spain as I use in the UK, that is to locate the area before the property. Yes there are many distressed properties out there, many of them because someone paid an 'A' price in a 'C' area, when banks were lending freely and buyers left their brains back home.

Re: Is now the time? Javea Spain.
 

80k deposit.... you'd barely get a garage here for 80k

they'll get something nice for the 250 they say they have though :)

Re: Is now the time? Javea Spain.
 

That's what I thought, I read it wrong, 80K was just the deposit! ;)

Re: Is now the time? Javea Spain.
 

Good point, the banks are no longer lending freely that one of the reasons why property has fallen so readily. Who are people who need to borrow going to borrow the money from to buy. I understand the banks are also holding many properties on their books, some of them will be sold below the said 'market value'.

Re: Is now the time? Javea Spain.
 

And how well will they credit score? I ask because as the owners of several properties with no mortgages on them and no other loans at all, our score was not good. We now put all supermarket shopping, car fuel, internet purchases etc; on a credit card with a DDM authorising monthly settlement.

Re: Is now the time? Javea Spain.
 

It depends what sort of a property he has in mind. If he wants location, 4 beds/baths. Good location, then 500,000 could be a bargain.

I think to go in and offer 20%+ less you need to do a bit of research. How would you know if the person hasn't just slashed the price...again! I hear mortgages are very difficult to obtain in Spain unless buying a property off their books. Our sale was held up for months because the buyer had difficulties raising the money, even though he had 50% deposit and is an eye surgeon. He finally borrowed off 2 banks so we had 3 bank drafts:blink:

Re: Is now the time? Javea Spain.
 

Spot on :thumbsup:

Re: Is now the time? Javea Spain.
 

Javea is perhaps the most upmarket area along the Costa Blanca and you should expect correspondingly higher rental returns compared to inland areas. Also they are relatively careful about planning there, so properties tend to hold their value a bit more. Of course it depends on personal circumstances and taste, but I can understand why Javea is a bit more expensive in general: simple supply and demand. Having said that, the market there is still overpriced, as shown by the number of properties that have been on the market for years.

Re: Is now the time? Javea Spain.
 

Also there seems to be an assumption that everyone is desperate to sell...they aren't.

Re: Is now the time? Javea Spain.
 

Seems, in view of the replies. We may not be as wealthy as some of the respondents?.

A Villa in Spain is something we have wanted for a very long time. Currently, we have a Luxury motorhome. As lovely a past time as it is, it costs a small fortune in running costs and trips away. That and Our Family cannot use it as only myself and my Wife are licensed to drive it.

If we had a villa, our immediate Daughters and their families could also use it, if available.

Thank you all for the replies.

TAM

Re: Is now the time? Javea Spain.
 

We have a villa near Denia and do just that ... over the past 10 years we have enjoyed many lovely holidays with family and friends and we have also lent it to them so that they can enjoy holidays independently of us. We hope to spend a lot more time in Spain when we retire!:) Yes, we could have stayed in a hotel each time or rented someone else's villa so that we would not have to do small maintenance jobs whilst we visit, but we've never regretted our decision to purchase.

Re: Is now the time? Javea Spain.
 

I've just re-read your original post and if you plan to buy and rent out, you should bear this in mind, just in case it turns out to have an element of truth (which can't always be said for the Daily Mail) http://www.dailymail.co.uk/news/arti...-tourists.html

Re: Is now the time? Javea Spain.
 

At last, a more positive response.

Thank you.

Re: Is now the time? Javea Spain.
 

Aided and Abetted by the Hotel Industry who have falling sales. All-Inclusive deals that they did, failed to work as expected.

Who wants to share a hotel canteen or pool with the Clampetts. If they are not poking your food, grabbing every ice cream from the fridge or dive bombing you in the pool, they are just bloody annoying. I deal with idiots on a daily basis at work. I want privacy on holiday. As do many others who choose the Villa option.

Having rented everything from a run shack in Western coast of France to a Ten Million Euro Mansion in St. Tropez. We have only ever encountered one very bad property, the shack. Which I eventually got 100% of the rental returned.

Having said that, I quite welcome the Idea of some form of inspection. Electrical Safety tests, gas tests and pool monitoring would be the first on my list for the license. Just so long as they do not take things too far.

TAM

Re: Is now the time? Javea Spain.
 

That's perfectly understandable, friends of ours did exactly the same and have been enjoying their property for over 25 years. However they (and I suspect you) could afford the purchase outright and certainly haven't relied on letting out the property, if fact they have never rented it out. They have retired there now and have three properties, one was bought purely for rental, the other two have only ever been for themselves. I've always said, Spain is a great place to move to if you have sufficient money not to have to worry about bills, exchange rates etc, but for those that buy expecting future bookings to fund the project, that's risky.

Re: Is now the time? Javea Spain.
 

We have a mortgage on ours ... we bought with the intention of moving out to Spain when we retire and selling our UK house to buy two flats here to provide rental income in our old age (assuming we ever get that far). The amount of pleasure the villa has given us and others more than makes up for the tax relief we could have obtained if we put the Spanish mortgage payments into our pension fund. But it is purely a personal decision (whether or not it was wise remains to be seen) ...

Re: Is now the time? Javea Spain.
 

Is it a rental villa? Big difference between needing or not needing to rent out your villa, and when you bought, 10 years ago, things were very different.