Monthly Archiv: June, 2012

The Euro Is Down – Time To Buy?

The EURO has kept crashing due to the trouble in the eurozone economies. Spain, Greece, Italy, Portugal and Ireland have all been in various kinds of trouble and as a consequence you will now benefit from buying Spanish property in any other currency than the EURO itself.

Is it a good time to buy then ?

Yes and no. If you have savings in pounds, dollars, francs, Swedish kroner, rubles or whatever it might be, they will buy you more of a Spanish dream property than ever before. Not only are the prices well below their peak in EUROs, the euro itself is also cheaper to buy. Overall of course that makes coming to Spain and buying a property a unique and cheap option at the moment. However, there is a flip side to the coin. No mortgages are available from Spanish banks as they’re all overly exposed to the local property market, several of them at a level where they risk collapse.

Foreign banks in a variety of countries do have mortgages for solid customers wishing to buy a house, but may still refuse to provide one for a house in Spain. Plainly spoken, a EURO collapse or Spanish euro exit would deliver another blow to the Spanish property market and as such turn any equity into a negative immediately and/or compromise the ability to repay in case of a forced sale.

In other words, it can´t be ruled out that Spanish properties will continue to fall in prices, in the case of a default or Euro-exit it could be sudden and drastic. However, if you simply look at the prices, the value you can get right now and the long term attractiveness of the properties on the market right now, there are some fantastic bargains to be had if you have the money yourself. Buying to keep is perfectly timed, buying to enjoy is rarely a bad idea, buying with a long term purpose is most likely an excellent investment – but buying on a tight budget and a 100% mortgage with the aim of flipping the property soon is a game of Russian roulette.

Is It Actually A Dream Home ?

You know what your dream is, your perfect vision for the perfect house in Spain to be the base of a fresh lifestyle in the sun. You are probably sitting at home looking at potential rental properties on website after website. Drooling over one magnificent looking villa or apartment in Spain after the other.

But we all know pictures can be deceiving. The rental agent may have taken the charming picture of the glorious Spanish garden with palm trees, a pool and an outdoor kitchen at just the right angle to avoid revealing the shopping mall, motorway or other unpleasantnesses just behind it. A wide angel lens may have made the tiny cupboard of a lounge look like a ballroom. The mold running down the wall may just have missed the picture to make room for the stunning view towards the patio.

Obviously, actually heading to all the properties you are interested in will reveal the thin layer of make-up applied to run-down properties in unattractive locations, however many an immigration to Spain has been enacted without a previous viewing of the rental property due to time constraints or the logistics involved. It goes without saying that taking a working holiday in the area you consider moving to is preferential. Though, even if you do decide to view all properties carefully in advance – wouldn’t it be nice to be able to narrow down the attractive ones and allow yourself more time to visit and view the attractive options?

The way forward is to insist on proper, honest and thorough video footage of the rental properties before booking a viewing. Several agents do their own videos these days. Sometimes they are spot on and helpful, at other times they conveniently show a quick panorama of the good bits but fail to take you on an actual guided tour of the property. Don´t let them fool you and never settle for second best. If the agent chooses not to provide you with a complete view of the property, why could that possible be? Laziness? Something to hide? Do you really wanna waste your precious time finding out, when you could in fact be out finding the perfect future home for your family instead?

Of course not. Go with the rental agents who provide a proper service and are not afraid to give you an honest demonstration of the qualities of their properties. .

Here is an example of how a property presentation video can be done in a way that benefits the potential tenant by taking him all around the property in a series of video slides:

This one is from a villa in Javea Spain. They can be done as actual videos, a mix of video and photos or a thorough selection of photographs from around the property. We would suggest specifically looking for the agents using Property Videos Spain as they have a reputation for making not only eye-catching presentations to get the properties rented, but also for doing so in a transparent way that gives the potential tenant a clear view of the upsides as well as downsides to the properties.

As a further bonus, the Javea rental agents using the services of Property Videos Spain will be able to supply a complete property inventory video, which is something you should always ask for when renting – it saves alot of potential hassle, frustration and expense when the exact inventory and state of the villa at the time of moving in is documented in a way that can not be brought into dispute by either side later.

bob

Iron Art – Charity & Furniture Fiesta

On Saturday the 16th of June, 10:00am until 4:00pm, you should put everything aside to go to the Summer Fair at Iron Art in Gata De Gorgos. The event is a charity held by Women in Business to support shelters, which obviously is a noble cause in itself and worthy of your support, but as a furniture enthusiast in Spain this is most definitely one not to be missed.

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Iron Art in Gata De Gorgos have a huge area equipped with stylish displays of unique and high quality furniture for your Spanish home and garden. Beautiful gazebos, high quality patio sets and decorations to make any garden shine are just a few of the excellent offerings from Iron Art themselves. But on Saturday, all that is topped up by the summer fair that sports more than 40 stalls full of interesting items to stroll around and enjoy.

Women In Business are having a Summer Fair in order to raise funds for Victims of Domestic Violence in the Marina Alta area. They will be over 40 stalls and entertainment through out the day…if you wish to have a stand to promote your business please contact abiwatkins2006@gmail.com for further details or if you wish to be on stage contact candidawright@gmail.com

Do not cheat yourself of this furniture fiesta with plenty of extra activities for the entire family!

Spanish Dream Home – A Good Time To Invest ?

Plotting to invest your savings in Spain ? Worried about the collapse of Spanish banks, falling prices and the economic crisis in Europe taking its toll on Spain ? It would be strange if you were not. Investing in Spain at the moment needs to be done with your eyes wide open – but it isnt per definition a bad idea.

So, reports have stated that the Spanish banks and economy in general is about to crash and burn. Leaving the EURO is inevitable and decades of economical depression is ahead. Others argue the bottom has been reached, small signs of improvements can be found, the Spanish economy and banking sector is too big to fail and the upturn will be slow but start to happen relatively soon. If you are talking to estate agents inquiring about potential dream homes in Spain, non-surprisingly the latter story will be the one they tell you. But which one is correct?

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The crash and burn theory is the natural outcome of certain external factors and as such a likely scenario to unfold in the future. However, what is required most likely is a Greek bankruptcy leading to massive losses in banks throughout Europe. A number of these banks will fold, thus further diminishing credit rating and trust in the market, which will make funding of debts – new and old – expensive or impossible. This has the potential to stimulate further problems for Portugal first and foremost, but secondly Italy and Spain as their burdens of interest will grow significantly through the upcoming re-funding of national debts. Further contributing factors could be economic skeletons in Spanish and Italian closets, the existence of which are probably more likely than not, however them being exposed goes against the interest of big players on the market and as such it may be avoided. The same goes for the massive amounts of mortgages and other types of loans not currently written off as lost by bank in Spain, Italy and elsewhere.

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Should these loans be written off tomorrow the Spanish banking sector would most likely collapse as the solvency of a vast number of these look more artificial than real. Again, there is no interest in the market of exposing these postponed losses, to the contrary. These phenomenons could lead to a pressure from inside and out for countries like Spain to leave the euro, this would have further implications that are hard to predict, but certainly steeply rising interest rates is likely. Another scenario is a devaluation as a mean to better competitiveness and exports, which would probably help short term economic boosts but lead to inflation and further rising interest rates to combat such rises in inflation. From across the pond other economic dangers lurk, that could topple a vulnerable market like the Spanish one. Whichever way you look at it though, as a prediction of a possible future development – it could happen, it is even a likely outcome.

The hurry up and invest theory is equally true. The Greek government got their bailout and if the negotiations turn out well, the Greek economy may have been bought a couple of years before the inevitable collapse. If this holds true and no other European countries end up in economic turmoil within the foreseeable future, we may well have gotten the breathing space needed for the slow signs of bettering economic trends to be nurtured into full bloom. The interest rates are still low in historic terms, unemployment has been marginally falling in most of Europe, inflation has been on the rise but not drastically and mainly in less important areas. Time is essential even if recovery and growth is slow, as the banking sector is vulnerable and need time to spread the losses and rid themselves of dead weight, governmental reforms across Europe need time to work, market trust regrows slow. The wheels are turning slow but theres potentially light at the end of the tunnel – and though that could be a Greek train approaching – it could also be a new boom in the world economy. Again, the prediction could be correct – if all goes well, buying today would be at the bottom and in 2 years time the ROI would be excellent – it could happen, it is even a likely outcome.

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Does it matter? Yes. Whilst planning is essential, especially when emigrating, very few people have the ability to create a solid plan that entails both scenarios, as it basically needs to span everything from blooming activity all around to endless chaos and depression. What is worse is that the plans will be affected massively by the outcome of the scenarios above. If you have made a solid plan to buy a house with plenty of money upfront and a small mortgage, researched your market as a skilled professional and found a perfectly suitable area you would seem to have most bases covered. Because. It will matter to your life and your business if 25% of your expat customers suddenly leave within a year. It will matter if the purchasing power of those left behind – Spanish and expat – is diminished drastically within a short period.

It will matter if everyone gets further cautious and keep their money stashed away. It will matter to you if your mortgage is suddenly twice as expensive due to steeply rising interest rates. It will matter if you suddenly need investment in your business and no bank is willing or able to provide it. A lot of more indirect consequences would be equally likely such as services being cut harshly due to tax revenue dropping, the general dynamics of a town at a standstill being rather depressing with buzzing squares turning into abandoned heavens for whitewashed windows, a growing unemployment rate would be likely to lead to increased social problems and subsequently the idyllic town you bought your house in might suddenly be plagued by yet unseen waves of crime. Now of course, the exact opposite of all these doomsday theories and predictions could be equally true, and that is exactly why it matters.

The circumstances you move to may change but indeed so may your personal life and preferences. It is an obvious truth that if you plan to stay indefinitely in the loving relationship you’re in and the plans you made for your job and pension turn out adequate, then of course a 30% drop in price over a limited timespan matter little or not at all. However, the honeymoon is rarely spent plotting the divorce, its uncommon to debate the terms of your departure at the job interview and you can barely predict what scandals the politicians might get involved in today, much less predict what changes they may enforce on your pension in 15years. Is that relevant? Yes! Make a plan and throw it away. Plans are nice guidelines but mainly useful for hindsight and giggling over all the things you simply hadn’t foreseen. If you’re forced to sell suddenly for whatever combination of reasons, you’re almost always in an extremely difficult situation if the equity is negative and almost inevitably will be if you bought within the last 5-8years and a 30% drop happened during that period.

Having a plan. Knowing what you can afford. Its an excellent start but the warranty only lasts till the next bill comes in and the next paycheck is cashed. The Americans cant predict the future and thus you cant plan for it.