Investors Take Positions as the Property Market in Spain is Set to Rebound

SPANISH HOT PROPERTY LOGOlinked inIf we haven´t hit the bottom yet, we will very soon. This opinion sums up the prevailing view expressed by several leading Spanish real estate agents including Nick Stuart Managing Director of Spanish Hot Properties and Simon Jones marketing director of Sundream Estate.

According to a recent report from Knight Frank, a property consultancy, international investment fund firms could invest up to 14,000 million euros in the Spanish property market in 2014, and they are particularly keen on acquiring offices and hotels but this is small fry when compared to the big Investment and Pension funds who have recently bought substantial assets from SAREB (The bad bank of Spain)

Andrés Escarpenter, managing director at Jones Lang Lasalle, thinks that Spain is currently experiencing a spring thaw, although this is not necessarily based on an improvement in key economic indicators such as GDP, inflation, or the rate of unemployment. He went on to point out that adjustments in house prices have triggered a surge in investor interest. And how far have property prices fallen? On this point there is a diversity of opinions. Santiago Aguirre, Chairman of Aguirre Newman, estimates that prices have fallen around 50% in general terms, although this figure may vary, depending on the particular sector of the market.

However, in general terms, the experts are confident that as soon as the economy starts to rally, house prices will start to go up again. Several reports published over recent weeks predict an upturn in prices. For example Caixa Bank thinks that house prices will start to recover in 2015. This opinion is shared by the rating agency Standard & Poor’s, which also believes that prices will improve in that year. This is a view shared by Spanish Hot Properties and a message that is reguarly sent to all it’s clients.

There are several reasons to be optimistic about the housing market. One is that the total stock of housing has begun to fall, as a result of increased sales of completed homes and a slowdown in the construction of new build homes. Sales are highest in coastal areas of Spain while in other areas, where there is a shortage of available housing, developers are beginning to renew their activities. Banco Sabadell alone has 60 housing developments currently under construction.

In short, the sluggish Spanish real estate sector is beginning to stir and investors, such as international investment fund firms, are showing renewed interest in the market, although no large investment deals have been completed so far. Spain is once again considered to be a good place to invest, although this change in the trend is not based on economic indicators, but rather on a shift in investors´ perceptions, and how they view Spain. For this reason the main challenge now is to ensure that property continues to be seen as an attractive investment option for a long time, so that investors do not decamp to other countries such as Greece, Italy, China or Latin America. According to the experts.

If you would like to know more about how you can take advantage of the Spanish property crisis then contact http://www.spanishhotproperties.co.uk/

5 Tips on How to Invest in Spanish Property and Make Money.

Spanish property investmentA recent testimonial below from one of our favorite clients shows what can be achieved if you seek professional advice when investing in Spanish property.

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Another testimonial for you….  all best Celia

I am thrilled to let you know that your guidance in finding a holiday rental property on the Costa Del Sol delivered and exceeded requirements and potential holiday bookings.  I have 29 confirmed weeks of rental and have only been advertising for less than 3 months.  What a great result.

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So for those of you who are interested I thought it would be a good idea to look at the basic investment fundamentals when buying a property to let for Holiday Rentals and own use.

TIP 1

Make sure you choose a good location with demand for Holiday Rentals. For example properties close to Golf and Sea have all year round rental income potential and maybe properties close to amenities and beach do not.

TIP 2

The cheapest property might not always be the best property to buy. A property that is more expensive might be in more desirable holiday rental location thus giving you more holiday rental income. Also the best looking property that you love yourself might not be the best investment for the reason above

TIP 3

Be prepared to spend money marketing your property. These properties do not rent themselves by magic, so be prepared to invest money in the major holiday rental sites as well as making the property available to local agents in Spain.

TIP 4

Spend a little extra furnishing the property so when you put your ads onto holiday rental sites your property stands out from the crowd.

TIP 5

Consult a professional real estate agent you can trust and one that knows the market. Also one who can introduce you to good person or company to manage property for you?

We hope you find the information useful and obviously these are just key points to help point you in the right direction. Each investment is unique but with the right approach and making the right choices there is no reason why you can’t invest in Spanish property and make money.

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Serious Spanish Property Investors Making Money in the Recession

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It might be hard to believe but it’s true that the decisive decision making property investors are making money whilst the part time investor still dreams of doing so!
This was recently illustrated by two amazing sales that recently took place a Villa in 400 M2 built in Puerto Banus area selling for an Incredible 600,000 Euros when it was worth well over 1 Million and a 3 Bedroom apartment in Bahia de Banus selling for just over 370,000 Euros when the cheapest other property in this prime location development is selling for over 600,000.

Both of these properties could now be sold by the investor who could expect to sell at a profit including the high selling and buying costs in Spain and still offer the new buyer a fantastic deal. For example if you bought the same unit in Bahia de Banus for 525,000 you would have still got a brilliant deal but the investor would have made 20% on his money inside 3 months.

Saying this some investors have different exit strategies some would make a quick exit and some would hold on to prime location assets expecting as much as 100% profit before costs taking a two to three year view.

So how do these investors manage to get these deals before other would be buyers? In reality it’s all about good business decisions, preparation and professionalism.
Firstly those good business decisions include finding a professional company to represent their interests and not trying to work with lots of agents. Professional people are able to locate the right business partner and put trust in them. Whereas a part time investor would probably register with 100s of agents because they would be frightened of missing out on a deal. The other reality is that some investors won’t even visit the property and will act on the advice of their agent they have decided to work with.

Secondly a serious decision making investor would have everything in place and ready to act so that when the right property or opportunity became available they were in a position to act before anyone else. This would involve having chosen a Lawyer and having the necessary funds in place to put down the required deposit immediately.

Lastly is the degree of professionalism when choosing the company to work with and doing their homework and understanding what they want to achieve and at what level below market value they are prepared to enter the market at. These investors after taking advice from their advisors will know when to act and in reality they do act.

Unfortunately the part time investor or buyer looking for an amazing deal doesn’t follow the same professional approach. The biggest mistake they make is to approach in excess of 10 agents which shows a complete lack of understanding of the property market in Costa del Sol. Also it’s pretty clear that an agent is going to look after clients that are exclusive to them before they look after the client who is working with several agents, that’s just normal good business practice. What this means is that the part time investor is always likely to get the crumbs from the dinner table.

If you would like to know more about serious property investment in Spain visit Spanish Hot Properties investor Club or call us today.

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Is the Spanish Property Market the place to Invest in 2013?

Spanish property investmentWith the news that Spain has got off to a flyer in 2013. Spain had hoped to sell up to €5 billion Euros of bonds; instead, it managed €5.8 billion Euros—and at yields well below previous issues of similar bonds. As a result, Spanish 10-year bond yields have fallen decisively below 5% for the first time since March 2012. For Spain, the successful auction is further confirmation that it is regaining investors’ confidence and vindicated its decision not to seek emergency support from the European Central Bank. The Spanish government has also taken a range of issues but has tackled the troubled banking sector which being recapitalized and restructured. The number of banks has fallen to 12 from 50, the number of branches is down 14% and employees are down 13%, with further substantial cost cuts to come. Spanish banks have also regained access to bond markets and may be able to repay some ECB funding at the end of this month. All this puts Spain in a good position to come out of the recession a lot stronger than a lot of experts predicted.

So how does this impact on the Spanish property market? Obviously the most important point here is when trying to attract investors the number on word that screams out I CONFIDENCE. If an investor is confident in the market place then they are more likely to invest in that market. Spain is also taking real initiatives to find buyers for its huge housing stock as signaled by its intention to try and get more overseas property buyers from the Middle East, China and Russia by giving residency to those who buy a property in excess of 160,000 Euros. Whilst this has yet to become law it shows the Government is thinking outside of the box. This idea makes far much more sense than trying to reduce taxes to sell properties. Just make it easier for those who want to buy and a 160,000 is not much to pay for a safe haven. In Cyprus where they have a 300,000 Euro entry limit the number on Chinese buyers has increased considerably.

What do these initiatives mean for buying investment property in Spain? The obvious one is if some of the excess stock can be taken from the market then price rises are likely to come sooner rather than later once the housing market recovers. Let’s not forget that most bank repossessions are being sold well below replacement value thus making Spanish property very attractive from a capital growth point of view. South of Spain also has the warmest winter weather than any other part of Western Europe and will always have a substantial international property market that won’t be affected by local market conditions. The other major factor is that Spain is pretty close to the bottom of the cycle if it not already there. As any good investor will tell you the best time to buy is before it hits bottom and the best time to sell is before it hits the top.

So is the Spanish property market the best place to invest in 2013? The answer depends on your own views and interpretations of the fundamentals but Spain has a lot going for it when compared to other overseas property investment opportunities and when you can buy below replacement value its certainly worth further investigation and research.
I personally very optimistic but maybe it won’t be until the second half of 2013 until everything starts to fly off the shelf.

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Spanish Property Bargains Location or Property?

Capanes del Golf

For those of you deciding on the best Spanish property investment you will no doubt be faced with the age old problem of property V location and what is right for you.

I am sure you have seen all those TV programs like “A Place In The Sun” where the would be property buyer is given the choice between Location or the quality of the property and where the buyer in the majority of cases picks location as the criteria. However as the show unfolds it is nearly always the quality of the property that win over location. So why is this and is this the experience of Spanish Hot Properties on the ground here in Marbella and Costa del Sol.

Yep the truth is our experience very much reflects those TV programs where buyers end up choosing the property over location and the reason is the majority of the buyers just want to make their budget stretch further rather than accepting what their budget will buy in a prime location area.

Also these buyers looking at investment property in Spain actually are not basing their judgment on sound investment fundamentals of the head when it comes to buying Spanish property. The reality it’s the dream of the heart that takes over.  There is absolutely nothing wrong with this as long as you understand the reasons you are buying your property. I.e. if it is your property to live in or you want an extended home then the house you live in should be something that your 100% sure about from a living in point of view. However if it’s really for investment purposes then Location Location Location needs to enter the head and rule your decision but invariably doesn’t.

In relation to Spanish Hot Properties experiences with our average sale being around 300,000 Euros its clear those clients have a difficult choice to make but once you can look to spend more than 400.000 Euros it’s much easier to make that call as it’s possible to find good prime location property and then it has more to do with the size of the property.

So what should you do here in Costa del Sol? Well as stated above I would suggest you ask yourselves the following questions

1                    What is the property for i.e. holiday home or property investment?

2                    Do you want to receive rental income from the property or is it just for you?

3                    Do you require finance?

4                    How often will you use the property?

Your answers to these questions should allow you to make a reasoned judgment call as to whether you should be looking at investment property in Spain or buying a Spanish holiday home.

If you would like some advice or more information on the process of buying or investing in Spanish property why not contact us at Spanish Hot Properties.

 

Spanish Property Investment in 2012, 5 Tips for a Better Investment

Puerto Portals Mallorca

So the burning question is now the time to buy investment property in Spain and if so what sort of Spanish property should I buy?

In this Blog I will give you five tips that hopefully will guide you in the right direction but first you really have to come to terms with what type of investor you really are, Are you a lifestyle investor who wants to buy Spanish retreat and make some rental income from it with the possibility of Capital growth or are you a real property investor who doesn’t want to use the property and is only interested in buying at rock bottom prices with high rental yields?

The answer to that question should radically effect what you invest in but the following should help you whichever category you fall into.

TIP 1, Location is Everything

The most obvious and best advice I could give any investor but it’s truly amazing how many people choose to buy a better property in a secondary location. Now if you’re going to live in the property full time I can understand that. However from an investment point of view prime location always holds its value better and is always easier to sell should you need to.  In fact Location should be the cornerstone of your whole investment strategy. Much better to settle for a 2 bed apartment in a prime location area than a villa in a secondary location.

TIP 2, Make Sure Your Property is Rentable.

Whilst your property doesn’t have to be in prime location it does have to be where there is a demand for Holiday Homes and where you will be able to achieve good rental income. Two good examples of this would be a Golf course property due to the all year round rental potential or a beachside apartment close to amenities which is what most families look for when they book their Holiday Rental. A bad thing to do buy would be a very good looking property not close to amenities with no facilities even though the development itself has stunning views, pool and garden.

TIP 3, Make Sure You Only the Use the Best Professionals

An old adage that you should never skimp on your Accountant or Lawyer is never truer when investing in a Foreign Country. Make sure you use the best available Lawyer, Mortgage Broker and Agent when buying your Spanish properties to do anything else would be foolhardy in the extreme. A lot of the so called horror stories you read about could have been avoided if the buyers had used the best available professionals and the reality is they probably don’t cost any much more than the lesser ones.

Tip 4, Think About Your Exit Strategy

As any successful property investor would tell you it’s only when you actually dispose of your investment that you actually make a profit. So think about what you’re buying and when you’re going to sell it. As a rule it’s very difficult to make quick returns in Spain, your investment should be based on the medium to long term.

Tip 5, Beware of the Buying Costs in Spain.

One of the biggest obstacles to making large profits in Spanish property investments is the high buying costs in Spain which can be as much as 12% of the Purchase price where there is a high mortgage involved. This makes it very difficult to buy and sell quickly and make a profit.

So if you’re interested in Spanish property investment in 2012 I hope you have found this article of some use. If you need any more in depth help just drop me a line or give me a call

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