Posts Tagged ‘Holiday Home’

Of course, like anywhere in the world, there are secrets to buying property in Spain. To know these is vitally important, particularly if you are thinking of moving to Spain. Buying a holiday home is one thing, but buying when you intend making Spain your new permanent home is another matter altogether, because – to put it mildly – the stakes are very high. Without question, where and what you buy will define the long term success of any move to Spain

Spain is a complicated place to move to as its land law and culture are very different from other north European countries. It is notoriously easy to buy a Spanish property that is illegal or which, although legal, has very considerable potential future liabilities (for example, urbanisation costs). These could quickly distort your finances and place you under enormous stress.

Equally, Spain offers a bewildering choice of areas in which to live – often not appreciated by relocating Europeans, who tend to automatically buy within expensive ‘ghettos’ of their own nationality. Whilst this can work well, it is often limiting and can lack the challenge and life enrichment of trying to integrate with the Spanish themselves.

Almost all ‘rules’ are there to be broken, but the ones below should be studied carefully before breaching them. In fact, when looking for a permanent property in Spain, you should try to use the list below as your first test of a Spanish property’s long term worth and only break one of the rules – if you can replace it with something else outstanding.

So, for example, always try to buy a Spanish property with a flat plot. To do otherwise can make a re-sale difficult as your property in Spain will not appeal, logically, to a large section of the market (elderly people – often with small grandchildren, couples with small children and anyone even mildly disabled). This does not mean that you do not buy a Spanish property with a steep plot – but make sure that the view, for example, is truly spectacular. Always, practically, look at your re-sale market and only disregard a ‘rule’ if, objectively, you can replace it with a major positive alternative.

And when you do look at buying a Spanish property, always keep in mind the re-sale qualities that exist to the biggest market share possible. Moving abroad is always something of a jump into uncertainty and you may find that you simply do not like it after a few months. In which case, you must, before you buy, have made sure that your property was easily re-saleable. So, always compromise on your personal likes and dislikes – rather than buy (or reform) a property that only you and you alone are likely to want!

Of course, if you buy within carefully thought-out parameters then, more than likely, your Spanish property will also be a fine long term investment! So, buy carefully, never be rushed and look at things with cold objectivity…

THE RULES:

Villa Vital Characteristics

Make sure you buy:

o Urbano
o Fully urbanised
o Maximum 2/3 minutes from a village
o 15-20 minutes (approx) from the sea
o I hour (max) from an international airport

A property that has:

o 3 bedrooms (min)
o 2 Bathrooms (min)
o Flat plot
o Swimming pool
o An individual character

On an estate that:

o Has a mixed community of Spanish and Internationals (bigger future re-sale market and a hedge against a single country having particular problems i.e. tax changes on second homes, currency fluctuations)
o Is not a ‘ghetto’ comprised of a single nationality (agorophobic and often boring in the long term)

Town House Essentials

o Dedicated parking or an easy- to-access garage
o A good sized ground floor courtyard

Apartment Hints

o Check the community charge fees
o Buy south facing or facing the sea
o Make sure you have dedicated parking
o Ensure that the common parts are attractive and well maintained maintenance
o Watch out for poor build quality and sound proofing

Nick Snelling is a freelance journalist and author of How to Move Safely to Spain http://www.movetospain-safely.com and has a Blog at: http://informationspain.blogspot.com

Author: Nick Snelling
Article Source: EzineArticles.com
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Contrary to belief, there are various options in which to hold property. The extent and type of property investment, one wishes to have is largely determined by the level of personal involvement during the life span of the investment, as well as the reason for the investment. Owning property for the purposes of renting to third parties may require substantial personal involvement as apposed to investing in a holiday home. For the average person in South Africa, property investment means obtaining a physical shelter for their families. Some investors may be interested in property due to its capital growth component as well as its ability to generate attractive yields and returns over time. For others it may be to pursue non financial objectives, such as being able to control a tangible asset. Thus before one decides to invest in property one needs to clearly define the reasons behind the investment. Furthermore, from an investment perspective considerations of ownership tax and management issues are of vital importance. This decision needs to be considered carefully as shifting from one type of ownership to the next may be very costly. The property conveyancing process is a lengthy process which one would not like to encounter more frequent than necessary. In this newsletter we discuss the most prominent ways in which investors can hold property in South Africa

Freehold Ownership:
This is by far the most common form of ownership in South Africa. It implies the owner holds direct title over the property. Ownership would be registered in the deeds office in the name of the owner. Freehold property may be owned by both companies and individuals alike. The advantage of this type of ownership is that the owner has maximum control over his/her investment and may dispose of the property as they wish. Ownership in this form also means the property may be used as security to obtain loans and finances.

Leasehold:
Leasehold, also referred to as renting property does not give ownership to the tenant, however throughout the duration of the lease or rental agreement, the lessee (person who pays rent for the property) will enjoy virtually the same benefit as in the case of freehold above. It allows them to use and occupy the property for the duration of the agreement. The tenant pays over a monthly agreed rental to the landlord (Lessor) which entitles them to stay in the property. There are various types of lease agreements which include short term rentals, long term rentals or even rentals structured with the option to buy the property. Often the Landlord will have a very important right called a “tacit hypothec” included in the rental agreement, which entitles him to take possession of movable goods in the rented premises should the tenant or lessee not be able to pay their rent timelessly. Rental agreements are good options to consider for individuals who may not qualify for mortgage bonds as well as those who do not wish to settle permanently at a particular residence. Money paid out is money lost, thus this may not be a long term profitable investment vehicle.

Sectional Title
Under Sectional Title, there are several owners owning different sections of property. An example would be owners of townhouses and clusters all built on the same portion of land, albeit in various sections. Each owner has exclusive ownership of his own section as well as shared ownership in the communal property such as the swimming pool, clubhouse and staircases. Sectional Title in South Africa is regulated through the Sectional Titles Acts No 95 of 1986. The Act requires that a Body Corporate be created to govern the interest of the various owners. The Body Corporate collect levies, pays rates and taxes, insurance and maintenance expenses.

Syndication
This refers to the grouping together of individuals to pool finances in order to invest in property. Syndication provides the small investor with an opportunity to invest in a specific property which would otherwise not have been possible considering the size of the total capital outlay.

Property Companies:
Property companies are similar to the above however more formalized in the form of a company specifically established for the purpose of owning property. Under this type of ownership, a company is established in terms of the Company Act 61 of 1973. These are largely institutions and individuals who form these companies and use them as intermediary vehicles to invest in property. For the investor, a property company offers the advantage of it being a separate legal entity which has distinct liability from its shareholders. Property companies tend to be large entities that are mostly listed on the Stock Exchange.

Share block Companies
A share block company is similar to the above, however it is governed by the Share block Control Act 59 of 1980. These are specifically formed companies with shareholders each owning a share in the company. Income is taxed in the hands of each individual shareholder, thus making it a convenient vehicle for investors who wish to invest in property, allowing each to have their own tax profile. Owning a share in the property entitles to use and occupy the share of property they own. The rights are stipulated in the memorandum and articles of the share block company. A variant of this form of ownership would be Fractional Title, normally associated with owning a fraction of a holiday home. This form of ownership is also governed by the Share block Act alongside the Sectional Title Act. The difference is that Fractional Title has a management company setting up a defined roster for the scheduled periods of usage throughout the year, whilst usage is informally discussed with shareholders of a share block company.

Timesharing
Unlike the above discussed forms of ownership, owning timeshare is much like Fractional ownership, however it only entitles the owner to usage for a week or more of a particular unit. This is applied primarily to holiday accommodation. Timeshare in South Africa is governed by the Timesharing Contract Act, Act 75 of 1983. Beware of falling for the “Timeshare trap”. Owning timeshare does not equate to holding property, it merely entitles the holder to usage rights for a specific week/s during the year. Furthermore Timeshare in South Africa does not have a good reputation and thus sales agents will often use aggressive selling tactics to lock people into buying timeshares. This is particularly evident along the Durban coastal beaches and holiday resorts such as Sun City. Timeshare is often associated with accommodation establishments which are of lower quality. Exchanging weeks across resorts is also often difficult since it is subject to availability at the particular resort. It will also be very difficult to get rid of the purchased timeshare depending on the weeks during the year purchased, in the meantime levies will still have to be serviced.

Listed Property Investments
There are various ways in which one can invest in property indirectly without having to physically hold the property. This includes Property Unit Trusts, Property Loan Trusts, Investment Trusts and Collective Investment Schemes. Listed property investments are listed on the Johannesburg Stock Exchange and traded similar to equity stocks. As this topic is voluminous, it will be discussed further in future newsletters. It is however important to note that one can invest in property stocks listed on the stock exchange thus capitalizing on trading movements.

From the above it is thus essential that the property investor pays careful attention to the type of property ownership that they wish to use before investing in property. This need to be considered thoroughly since shifting from one property investment vehicle to another may be costly. It is vital to do all the necessary investment research, with focus on the macro economy, property sector performance as well as specific property funds, trusts or companies one wishes to invest in. Holding exclusive freehold title to property is not the only form of investment. As listed below there are various property investment types that can be considered which may also produce generous yields. The secret to building a healthy property portfolio however exists in firstly ensuring ownership to your primary residence is secured and you have the necessary Title deeds to show. Thereafter the playing field is diverse and hungry for new investors to participate.

Luciel Steele
MANFACT PROPERTIES
P.O.Box 61301
Marshalltown
Johannesburg
2107
T: +27 11 855 5371
C: +27 73 817 1127
F: 086 670 6064
E: lucielsteele@manfact.co.za
Skype: MANFACT

Author: Luciel Steele
Article Source: EzineArticles.com
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There seems to be a new trend on the rise for buying property overseas. The idea is that you rent a property from the owner or developer for a period of time and then buy, allowing you to test out the reality of your decision first.

The rent to buy idea is not new and is gaining ground, especially for first time buyers in many places in the UK but now the idea seems to have spread to the purchase of overseas property, especially in Spain and France.

As a buyer the process is quite straightforward. You take out a rent to buy contract on a property. This contract is a combination of an option to buy and a rental agreement and can be for a period of between 3 and 24 months. It gives you the exclusive right to buy the property under the terms agreed, at any time during the duration of the contract at the original agreed price. At the same time you get a tenancy in the property, at a previously agreed rental, for the duration of the contract. If you do decide to go ahead with the purchase the combined costs of the option and the rental paid are taken off the purchase price.

For example you could purchase a 2 bedroom apartment on the Costa Tropical in Spain with a purchase price of EUR109,200 plus taxes. A 6 months rent to buy contract on this apartment would cost EUR5,200.

On newly built properties some developers allow a buyer to sublet the property for the duration of the contract, so if your purchase is for investment purposes or perhaps a holiday home that you wish to rent out for the rest of the year you can start doing so even before you have bought the property.

While this sort of arrangement will not be suitable for all buyers it does have benefits for some. For example features and benefits include:-

• The right choice in property, by living in a property first you can make sure it is the right one for you
• Relocation and lifestyle, time to adjust to all aspects of relocation, either personal or for the whole family, giving you time to get to know the area, choose schools, jobs etc
• Peace of mind, giving you time to check that all the licences and legalities are in place and correct
• Rent to buy cost option payment and rent payment is credited towards purchase of the property
• Test the market. For rent to buy contracts with a minimum duration of 6 months, certain developments offer the possibility of subletting the property, which would enable you to rent to holiday makers during the term of your rent to buy contract
• Costs and taxes. You won’t have to pay property taxes etc. until you decide to purchase
• Quick move in time. You can typically move in a month or less
• Time to repair your credit. Before you actually buy the property, you will have from 3 to 24 months (depending on your agreement) to repair your credit

Property owners are also becoming interested in the rent to buy concept. In the economic climate at the moment it is difficult to sell your property abroad and offering it on the rent to buy scheme could ensure you get a return on your investment. Many private owners, especially of some of the larger, more expensive villas, are seeing this as a viable option and, in some cases, are increasing the option period beyond 24 months.

So, if you are buying or selling it could be to your advantage to check out rent to buy and see if it can help you.

Nicky Furre

Rent2Buy Properties – a new way to buy and sell overseas properties, particularly in Spain and France. See http://www.rent2buy-properties.com

Author: Nicky Furre
Article Source: EzineArticles.com
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With the recent credit crunch and issues with sterling falling against other currencies, many overseas owners are thinking of selling rather than buying a property abroad. However, there is little advice and help out there to know how to do this successfully.

The Five Key Issues when Selling a Property Abroad: Selling a home abroad is very different to selling a property in the UK. We often complain about the ‘slow’ process here, but in fact versus other countries we are:

1. Quite quick at selling property
2. Our estate agents charge less than MOST others in the rest of the world

One: It may take two years or more to sell your property. If you are in rural France, people don’t move very often and most property is passed down from one to another generation. As a result, it can take years rather than months or even weeks to sell a home, so before you decide to sell, make sure you understand how long it will take so you can plan ahead.

Two: The legals: It’s important to be sure that all the legal paperwork is in place for you to sell the home and that you understand how property is transferred from you to another party successfully. You need to know who to involve and be around for any paperwork that needs to be signed.

Three: Who should you sell through and who should you sell too? With the internet offering to ‘sell your property for free’ it’s easy to be drawn into these services in the belief they will do the job for you. This might work if your property is likely to be bought by another Brit, but unlikely to work if you could sell to the local market.

Typically a local agent, and/or an agent that is established locally but also has an international arm such as Savills or Hamptons allows you take advantage of both markets and will help you value the property correctly too. You may have to pay up to 10% to an agent to sell a property, but if they do it you still bank 90% of the money, which may be a lot better than banking £0 because you advertise somewhere that costs nothing too.

Four: Currency Exchange Issues With current market uncertainty, currency fluctuations are rife. The £1 against the $1 for example has fluctuated from £1 to $1.96 in January 2007 and in September 2009, was £1 to $1.68 but at one time went even lower! Of course a falling pound against a foreign currency might be good for you if you selling the property and own it in a foreign currency.

So it is essential before you decide to sell, visit sites such as Forecasts.org and talk to a currency exchange specialist to make sure you receive the best advice and if you need to fix an exchange rate you can.  However, do not go to your bank for this service, they will charge a lot more than a specialist will!

Five: Tax When you come to sell the property it’s likely that you will owe tax in the country that you sell the property in (in their currency) and then you may well have to pay tax in the UK too. It’s important to consult a specialist property tax advisor to make sure that you pay what you owe and have professional advice on how to mitigate your tax bill.

I am one of the UK’s top property experts being regularly quoted in the press including the Telegraph, Independent, Times, Daily Mail and Express and have appeared on BBC2, featured on BBC Radio 4, Channel 4 and a number of local BBC Radio stations. I have been a consultant to the property sector for a number of years and renovating properties for over 20 years. I have also written a number of books, including four for Which? – Buy, Sell, Move House, Renting and Letting, Develop your Property and the Property Investment Handbook.

For answers to all your property questions, contact me at Designs on Property on 0845 838 1763 or visit our website and blog using the links below:

http://www.designsonproperty.co.uk/
http://factsnotheadlines.blogspot.com/

Author: Kate Faulkner
Article Source: EzineArticles.com
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