Renting or buying....again - Page 4

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Renting or buying....again - Page 4


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  #31 (permalink)  
Old 26th August 2019, 11:09 PM
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I've bought twice in Madrid. The costs associated with ownership vary but generally I think for a 2 bed apartment you end up paying about 100 euros a month on community fees and maybe 50 euros a month on the local council tax. If the apartment has a pool, gardens, central heating, or is in an older building with higher maintenance then the community fees will be higher to cover these. The purchase costs are about 10% (more if it's a new property). You will also have costs of maybe 3% to sell it.

So let's say you want to buy an apartment for 200k euros and live in it for 5 years. That's about 20k in purchase costs, 9k in community and tax costs over 5 years, and 6k to sell it. So 35k euros altogether (assuming the value of the property doesn't change).

If renting the same apartment was say 700 euros a month then over those 5 years you end up spending 42k euros. So over a 5 year period buying wins, with those figures.

I haven't factored in lost interest on the money that has been used to buy the property, but then again I assumed it wouldn't go up in value either.

Of course you'd need to adjust the figures to suit the apartment you are considering buying, but that's how I would work it out.

BTW you say you're not concerned about leaving the apartment for someone else as an inheritance, but it inevitably will go to someone else if you die while it is in your possession. That someone else might well be decided by the Spanish government under Spanish inheritance law. It might be something you need to look into.
Thanks, youíve made many good points. Iíll have to sit down and do the math.
A couple of things.
I didnít mean I donít have a will. Although I have to re-do it I believe now that I m living here. Thatís a whole other subject! I meant I donít care if the value increases when Iím dead. But it would be part of my estate.
One point that I see differently is your comparison of output. I would include the hypothetical 200kÄ. Iím not looking at this as an investment to make money from on resale. This is what I want to be a permanent home. Homes Iíve purchased in the past , I lived on for over 10 years and only moved out of necessity.

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  #32 (permalink)  
Old 27th August 2019, 12:13 PM
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Thanks, youíve made many good points. Iíll have to sit down and do the math.
A couple of things.
I didnít mean I donít have a will. Although I have to re-do it I believe now that I m living here. Thatís a whole other subject! I meant I donít care if the value increases when Iím dead. But it would be part of my estate.


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One point that I see differently is your comparison of output. I would include the hypothetical 200kÄ. Iím not looking at this as an investment to make money from on resale. This is what I want to be a permanent home. Homes Iíve purchased in the past , I lived on for over 10 years and only moved out of necessity.
I've basically assumed you've got 200k to spend and you can either invest it elsewhere or in a property, but either way you start off with 200k and end up with 200k (after selling the property if you had chosen to buy).

But if you intend to spend the rest of your years in the property then yes you won't have to consider the selling costs (the inheritors would have to deal with those instead)

Also, as an aside, quite often older people in Spain who own their property outright sell what is known as the "nuda propiedad". Basically they sell the rights to the property upon their death. So if you own a 200k property you could sell the nuda propiedad for say 130k and still live in it as before. The difference being that the property passes to whoever bought the nuda propiedad when you die, but you get the 130k to play with. If you consider going this route you'd need to get professional advice, as I'm sure there are many pitfalls, but it might be worth investigating.

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Old 27th August 2019, 12:31 PM
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Making a will, you need to have it made under the European Succession Regulations, Article 22. This enables you to have your estate distributed according to the law of your nationality, rather than under Spanish law which says specifically who gets what and maybe not what you would wish.
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  #34 (permalink)  
Old 27th August 2019, 01:20 PM
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I've basically assumed you've got 200k to spend and you can either invest it elsewhere or in a property, but either way you start off with 200k and end up with 200k (after selling the property if you had chosen to buy).

But if you intend to spend the rest of your years in the property then yes you won't have to consider the selling costs (the inheritors would have to deal with those instead)

Also, as an aside, quite often older people in Spain who own their property outright sell what is known as the "nuda propiedad". Basically they sell the rights to the property upon their death. So if you own a 200k property you could sell the nuda propiedad for say 130k and still live in it as before. The difference being that the property passes to whoever bought the nuda propiedad when you die, but you get the 130k to play with. If you consider going this route you'd need to get professional advice, as I'm sure there are many pitfalls, but it might be worth investigating.
As I ďcasuallyĒ look at properties online, Iíve seen a few of these. Considering how long people can live that does not seem like a wise investment for the buyer. Remember the case of the woman in France who lived to 123? She outlived the buyer. Do people really do that?

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  #35 (permalink)  
Old 27th August 2019, 01:23 PM
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Making a will, you need to have it made under the European Succession Regulations, Article 22. This enables you to have your estate distributed according to the law of your nationality, rather than under Spanish law which says specifically who gets what and maybe not what you would wish.
Thanks Baldi. Iíve got a couple of things to settle first. After all...Iíve only been here 1 and 1/2 years! Iím just a child in that regard.
There is still the issue of wether I will apply for citizenship through my father who was born here. That might effect any USA will that I have.

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  #36 (permalink)  
Old 27th August 2019, 02:08 PM
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As I ďcasuallyĒ look at properties online, Iíve seen a few of these. Considering how long people can live that does not seem like a wise investment for the buyer. Remember the case of the woman in France who lived to 123? She outlived the buyer. Do people really do that?
Yes the buyer has to make calculations similar to those made by life insurance companies, i.e. estimate how long the owner will live for and work out the value of the property accordingly. I guess if the buyer thinks the property will go up in value during the remaining lifetime of the occupants he/she might think it worth a punt.

Also you have to bear in mind that it's much harder to work out the market value of properties in Spain since actual selling prices of properties aren't published, and estate agents ("realtors" in the US?) seem to be happy to let the seller name the price of the property, even if it means the price is way too high and sits on their books for years. The upshot is that most properties are overvalued and there should be room to negotiate.

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Old 10th September 2019, 05:35 PM
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Well, I think no matter what you do - rent or buy property in Spain (an apartment or a house), it is now three times cheaper (−35%) than in 2005. It's just necessary to ensure that you are getting a legal sale and there won’t be any troubles. As I know, there have been some big scandals over this in the last years. There is a national register of properties and so it is not hard to guess you buy a safe property. The process of buying for non-residential is pretty fast.
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  #38 (permalink)  
Old 14th September 2019, 05:15 PM
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I know this has been discussed before but it keeps coming up in my mind. Iím older, 70, and I rent in Madrid. I had every intention when I came here a year and a half ago, of buying a place. Itís how I lived in NY. But then I read about all the added taxes and fees.

There are added cost in NY too like high maintenance fees..Iím talking apartments, not homes . But as I read stuff here I thought it would be wiser to rent. Iím older, there are more taxes here, I think....Iím not actually sure. Renting seems very precarious to me. I have a nice landlord but I was thinking of moving. I pay a lot of rent and while I do have a lot of space, the way itís laid out, is not useful for me, Iím an artist and I wanted a bedroom to be my studio. But the second bedroom is the size of a nursery.

I should add that the issue of inheritance, of leaving something for someone else, is not a factor for me. Nor is having a mortgage. I would prefer to pay outright.

But for those of you who did buy apartments and homes, could you describe what the pros and cons are? Gracias.


I was a broker in the US long before I became a psychologist. Ownership is purely emotional. Renting however is smart for anyone wanting to look around at different stuff available on the market. Real estate ls like values in color. There are many values for each color thus, many types of property available. I have no idea what energy you have put into your search but, it may take time. You are an artist, needing studio space? Try moving outside the city. Just out of personal curiosity, what type of artist are you.

More on advantages
1. Sense of ownership
2. Control of how the property is set up
3. Etc.

Disadvantages
1. Not paying 12% up front sales cost
2. Not paying community fees
3. Being under the control of the landlord
4. Being restricted to a lease
5. Being stuck with what is already in the apt.


Sent from my iPad using Tapatalk

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Old 14th September 2019, 07:11 PM
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Live is what you choose, but rental accommodations give you the advantages of move on very quickly, property-ownership does not. I own a property in Malaga and it set in a negative equity, so should I have put that capital Ä350000 in the stock market in London I would have generate a income above 8 to 11 % per anon, and in Spain has generated nothing but lost of his value that I have paid by 21.5%,as the Spanish economy move in reverse. So my advise keep on renting that is fare better for you.

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  #40 (permalink)  
Old 15th September 2019, 02:01 PM
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Quote:
Originally Posted by Elyles View Post
I was a broker in the US long before I became a psychologist. Ownership is purely emotional. Renting however is smart for anyone wanting to look around at different stuff available on the market. Real estate ls like values in color. There are many values for each color thus, many types of property available. I have no idea what energy you have put into your search but, it may take time. You are an artist, needing studio space? Try moving outside the city. Just out of personal curiosity, what type of artist are you.

More on advantages
1. Sense of ownership
2. Control of how the property is set up
3. Etc.

Disadvantages
1. Not paying 12% up front sales cost
2. Not paying community fees
3. Being under the control of the landlord
4. Being restricted to a lease
5. Being stuck with what is already in the apt.


Sent from my iPad using Tapatalk
Well, as you must know, emotions are important. I want to settle without the whims of a landlord or changes in rent. Then Iíd have to move. Renting, I wouldnít be able to change the space to my needs. And in the situation Iím in now, I have to be extra careful preserving the furniture, which is hard, because itís cheap ikea laminate.
These issues are emotional but also practical.
Iím a city person.
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