The Price you pay
#16
Banned
Joined: Feb 2011
Location: Mallorca
Posts: 19,367
Re: The Price you pay
I've always wondered what their rationale could be. I tend to think it's just wishful thinking. A reasonable income from a property is far better than zero while it rots away...
#17
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Joined: Mar 2009
Location: Valencia
Posts: 1,164
Re: The Price you pay
There is always a reason why people do not do what you think they should
#18
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Joined: Jan 2007
Posts: 835
Re: The Price you pay
Our experience of Spain is that banks are holding out See Solvia es.
We were in Javea last year and rented and which we now recommend as a vehicle for deciding where you wish to live.
Again coming back in February having now negotiated a great rental deal.
However there was a ruin opposite us owned by the now Sabadell bank. They tarted it up and have just offered it to us at 288000 euros. No thanks.
If you think the process in Spain is barmy. Go to France and where we lived for many many years. Think Burgundy and think the wonderful white wines.
Some are only two to three acres why. French inheritance cannot disinherit children. So ten acres divided by five sons! Also French families never can agree upon values housing wise that is why you so many wrecks in the countryside.
We were in Javea last year and rented and which we now recommend as a vehicle for deciding where you wish to live.
Again coming back in February having now negotiated a great rental deal.
However there was a ruin opposite us owned by the now Sabadell bank. They tarted it up and have just offered it to us at 288000 euros. No thanks.
If you think the process in Spain is barmy. Go to France and where we lived for many many years. Think Burgundy and think the wonderful white wines.
Some are only two to three acres why. French inheritance cannot disinherit children. So ten acres divided by five sons! Also French families never can agree upon values housing wise that is why you so many wrecks in the countryside.
#19
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Joined: May 2006
Posts: 373
Re: The Price you pay
I'd defo agree with that. Maybe even more. But there would come a point where I would feel a bit guilty knowing people have worked hard all there lives for it and are now having to sell at cut throat prices, so a compromise never hurt anybody, obviously not going to pay what they maybe paid 15 years ago but won't abuse people's vulnerability, then everybody can stay happy.
Why a house is not an investment, a house is a home, things go up and down. Buy a car and it loses value, doesn't stop people buying a car to use.
It is the banks that lose when debt is used to buy, because the banks own the property.
Anyone who lives in a house that goes up in value does not work for that increase, it is free equity. If they sold a place and used the equity made to purchase something else, there is no guarantee of it always rising in price, value can go up, or down or sideways. The only price that matters is the price you buy it at and the price you sell it at, anything in-between is hearsay. Different times different situations.
So feeling guilty or sorry should not enter into it. Anyway about time prices came down to normality, something about 3 to 4 times local salary, means more working people can then afford to buy something for their families. Live in it longer term and there shouldn't be a loss, things should eventually even out over time. That is why it is so important to find the right property in the right place, therefore renting first for those that don't know the area is a must.
#20
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Joined: Jan 2013
Posts: 977
Re: The Price you pay
In France a house is a place in which to live. In the UK it is an investment! Much so as a placing in the Telegraph as to the estate that someone who is no longer with us has left.
Differing mentality who is to say who is correct?
Differing mentality who is to say who is correct?
#21
Re: The Price you pay
At that sort of rate there would be lots of affordable property but little investment value.
Mind you shortly afterwards the mortgage rate went up to 15% plus
#22
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Joined: Oct 2014
Location: Alicante
Posts: 327
Re: The Price you pay
It's just the difference between people who go into property as an investment and people who are not thinking about money side of things.
If your a property investor you never just look at bricks and mortor as something to live in. Not after you buy your first one anyway.
If your a property investor you never just look at bricks and mortor as something to live in. Not after you buy your first one anyway.
#23
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Joined: Apr 2014
Posts: 635
Re: The Price you pay
I don't see why it's so hard to understand why people would leave a place empty rather than settle for a rental below their target price.
Rental is hassle and leaves you open to unexpected expense. A person may put a value on the hassle and decide that it's not worth it below a certain price.
Regardless, clearly the people who would rent at 550 and leave it empty after offers of 500 don't need the cash. What's so hard to understand about that?
Whitelinen is right.
Rental is hassle and leaves you open to unexpected expense. A person may put a value on the hassle and decide that it's not worth it below a certain price.
Regardless, clearly the people who would rent at 550 and leave it empty after offers of 500 don't need the cash. What's so hard to understand about that?
Whitelinen is right.
#24
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Joined: Jan 2013
Posts: 977
Re: The Price you pay
Of course both in France and Germany house-owning is not at the top of the 'housing' list but rental is!
We rent houses albeit in France and the UK to others. We do not see the hassle but of course others do. We have in the UK the same tenant in one of our houses and he has been there for fourteen years.
As in houses rental values have ceilings.
Whilst in Spain last year our Spanish neighbour (in French!) said to me yes summer rentals are fine but the hassle and here true hassle of either weekly or fortnightly hand overs was a problem. Then someone resident in the UK did have hassle for say in the Thames Valley could not and was never quite sure of the quality of the hand overs. So both went long term rental with bonds and with a local agent on hand.
We rent houses albeit in France and the UK to others. We do not see the hassle but of course others do. We have in the UK the same tenant in one of our houses and he has been there for fourteen years.
As in houses rental values have ceilings.
Whilst in Spain last year our Spanish neighbour (in French!) said to me yes summer rentals are fine but the hassle and here true hassle of either weekly or fortnightly hand overs was a problem. Then someone resident in the UK did have hassle for say in the Thames Valley could not and was never quite sure of the quality of the hand overs. So both went long term rental with bonds and with a local agent on hand.
#25
Banned
Joined: Feb 2011
Location: Mallorca
Posts: 19,367
Re: The Price you pay
I don't see why it's so hard to understand why people would leave a place empty rather than settle for a rental below their target price.
Rental is hassle and leaves you open to unexpected expense. A person may put a value on the hassle and decide that it's not worth it below a certain price.
Regardless, clearly the people who would rent at 550 and leave it empty after offers of 500 don't need the cash. What's so hard to understand about that?
Whitelinen is right.
Rental is hassle and leaves you open to unexpected expense. A person may put a value on the hassle and decide that it's not worth it below a certain price.
Regardless, clearly the people who would rent at 550 and leave it empty after offers of 500 don't need the cash. What's so hard to understand about that?
Whitelinen is right.
I also have the benefit of hearing all the moaning. People listing homes for rent (or sale) at double or triple the market price, and then moan that nobody wants to pay a "reasonable" price for it. Well, it may seem "reasonable" to the owner, but when tenants can get something much better at half the price, people just won't pay it.
Some of it is simply people still living in the good old days when the market was booming, or naively taking the highest priced urban location in the region and applying it to their property somewhere in the campo. Or...just pick a price out of thin air, without regard to what the market price is for that class of property and location.
I think that supports the notion that locals just don't consider the value of their properties in realistic business terms.
Another problem is friends and family lying about their successes. I know of at least one owner who had a property on the market for several years, at about 3x market price, but eventually (quietly) accepted an offer for about normal market price.. but told everyone she got her millions out of it. Naturally, her friends and family had properties listed for ridiculous sums within weeks.
Just out of touch with reality. That's all. But the market eventually straightens them out.
#26
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Joined: Apr 2009
Posts: 7,749
Re: The Price you pay
My parents in-law have an empty flat which they "value" at 250k
Similar flats rent out for 500-550 euros per month
Out of this, my parents-in-law have to pay 150 euros IBI and 200 euro community fees per month. And will need to pay income tax on what they receive and landlord insurance.
They say it isn't worth the risk, tenants may trash the place or stop paying rent and even if they are good tenants, things like kitchens and bathrooms wear out and applicances need replacing.
They would rather have it empty and keep it up for sale for years and years hoping for that one elusive buyer. Millions of people across Spain feel the same way
#27
Account Closed
Joined: May 2013
Posts: 1,176
Re: The Price you pay
The truth is that rental prices are so low in Spain that often it isnt worth the hassle to rent them out
My parents in-law have an empty flat which they "value" at 250k
Similar flats rent out for 500-550 euros per month
Out of this, my parents-in-law have to pay 150 euros IBI and 200 euro community fees per month. And will need to pay income tax on what they receive and landlord insurance.
They say it isn't worth the risk, tenants may trash the place or stop paying rent and even if they are good tenants, things like kitchens and bathrooms wear out and applicances need replacing.
They would rather have it empty and keep it up for sale for years and years hoping for that one elusive buyer. Millions of people across Spain feel the same way
My parents in-law have an empty flat which they "value" at 250k
Similar flats rent out for 500-550 euros per month
Out of this, my parents-in-law have to pay 150 euros IBI and 200 euro community fees per month. And will need to pay income tax on what they receive and landlord insurance.
They say it isn't worth the risk, tenants may trash the place or stop paying rent and even if they are good tenants, things like kitchens and bathrooms wear out and applicances need replacing.
They would rather have it empty and keep it up for sale for years and years hoping for that one elusive buyer. Millions of people across Spain feel the same way
#29
Banned
Joined: Feb 2011
Location: Mallorca
Posts: 19,367
Re: The Price you pay
I know at least one agent who will accept and list the overpriced ones just to keep his website full of listings. But he'll refer all incoming inquiries to his sensibly priced offerings because he knows it's not worth his time to try to close them on the overpriced ones.
#30
Banned
Joined: Feb 2011
Location: Mallorca
Posts: 19,367
Re: The Price you pay
Depending on region, rents can be pretty astronomical, so owning for the purpose of rental income is a good investment, but most people first need a place to live, and most still can't afford to buy to just to rent it out for income.
But that's changing. Property prices are rising now, and so more and more Germans are seeing a defined "property ladder", and are more inclined to try to buy rather than pay high rents.