Spanish Property - Polaris

Hi,

My husband and I are thinking of buying a property in a Polaris development outside Murcia. It is a golfing complex with good onsite amenities for the kids. We are looking for information from anyone who may have bought from a similar development.

Is there a still good capital appreciation in Spanish properties ? We intend to spend a lot of time there ourselves but would also like to rent it our for at least 4 mths of the year. Is the market here saturated with rental properties ?

We are going on an inspection trip next week but would like to know what we should be looking for before we go ?

Lysa.

All the Polaris projects are well finished and very attractive, but are often in areas that are not great; as soon as you go outside the gate you are in a wasteland. Resale prospects not great, probably ok if you are happy that you will get the use out of it and not get tired of the limitations. Selling it on won't be easy since they are priced high enough against the local market usually.

Yes, the market there is saturated with rental properties. Capital appreciation in these kinds of projects is poor generally. You will usually only get rentals if you can market it yourself, but that is difficult.

Questions to ask? What is the ongoing cost, community charges, cleaning and management for your rentals, local taxes, etc.

Would I buy a Polaris project? Only if I was a complete golf nut who was happy to play on one course day after day and didn't want to go outside the door of the complex. For what you will spend there you would buy a good second hand property in Marbella beside about ten golf courses and with a better potential for resale down the road, and probably still keep a big wad of money in your pocket.

The market in Spain has levelled out, and buying new projects like this off-plan is not a good strategy; you can save a bundle by shopping around in the resale market in better areas.

Thanks for your reply, the price on the property is 136,000 for a 3 bed semi detached apartment with a pool view which seems like very good value. Usually when we go on holidays we spend most of our time relaxing by the pool so the immediate surrounding areas and amenties would be more important than whats outside the complex, also there are some towns are only a short drive away. My only concern would be I might bore of the same place. There seems to be a property mgt company associated with the developemnt that manage rentals although I'm sure they take a nice cut of that. I would hope that this property would appreciate in value and maybe down the line we could sell it on. Is there a risk the value of the property might fall ? Would we be better off spending 3-4 k annually on package holidays as are currently doing ?

Its a good question, spend 3 to 4k per annum on rental or buy your own place?

It depends on the running costs of the Polaris world place or indeed of any place you intend to buy. If you total all the running costs (management fees, community charges, local taxers, income tax, accountant fees, cleaning, laundry, water, electricity, etc, and the total comes to more than you are paying in rent, then you are going to be better off as you are given that the Polaris development probably won't appreciate much (if at all).

Don't get pushed into buying this trip, even if "they are nearly all gone". Polaris will hold one for you for a month with no deposit if they think you are any way serious; I don't suggest messing them around either, but take time to look at the local market and see what people are achieving for 2nd hand places, particularly in the other Polaris developments.

You probably hit the nail on the head when you mentioned getting bored with it; that was exactly my point. I personally would prefer to go to the Costa del Sol if I was going to buy a coastal property, and buy second hand at a keen price. That way I would have a base in the middle of loads of golf courses and a pretty varied life with loads of amenities that are a bit lacking in the area you are looking at.

Was that 136,000 euro or pounds? If the former it isn't a bad price for that amount of apartment, but I still reckon its in the wrong place.

That price has got to be in pounds. If its in euro, its exceptionally good value as those kind of prices are unheard of which would beg the question why is the price so low.

The only thing about Polaris is that you are very limited in what you can view - its only their developments and thats it. If that price is in sterling, I would recommend that you just take a peek at some other developments on the qt. Polaris are suffering at the mo as some of their major plans were refused planning permission so make sure you get a copy of the planning permission, permits etc

The going rate in Murcia for a one bed apt in a good complex is 160k upwards and thats from all major developers there.

In Marbella, your starting prices are 200k for a small 2 bed, new or resale.
Auto, where are you getting it from that you could buy any apt in Marbella for 136k? The studios in Fungirola dive start from 100k and you would not swing a cat in them never mind live in them

A useful website for you: www.spanishpropertyinsight.com (no connection)

See this thread too.

on daft.ie polaris world through sherry fitz in mullingar have two bed penthouse apts for €119800 and 3 bed aprt for €131300. so the price is in €. but if it doesn't include the iva tax and the other fees then I assume you would have to add at least another 10% to the price.

Still the price is tempting...unless the location is way off. Well worth a trip

I would be cautious as you are limiting your market to golf in which winter/autumn would have better rental potential but at lower rates. If golf course is poor or very expensive this would impact the rental potential also.

i have been on one of the trips to the area, looked at various properties near the golf course, etc. from what i noticed, there is very little opportunity of renting out the place, and also i cannot imagine there being numch capital appreciation as there are plans for miles and miles of properties in the same area. pm me if you want more detail of what i saw.

I can't believe those prices.

Why are they so low? I haven't come across anything like it in the price range. Even in Almeria, a 2 bed starts at 160k.

I would be very curious to know how or more importantly, why it is so low. Maybe because you won't rent it out. Rental in Spain is increasingly difficult so please dont depend on it, no matter how many promises are made.

Check out the availablity of water tho. Murcia are having huge problems with shortages.

And budget 14% on the purchase price in Spain - fees have gone up and only 7% of that is IVA.

thanks for your feedback, the price is 136,800 euros alright but without any taxes so we have budgeted for another 10-15% in total we will be talking in the region of 150-160k. We have been advised of management charges of 800-1000 per annum, havent gotten the community charges yet, are there water charges too, what would be normally come in at ?

The property is 20mins inland from Murcia so this is the reason we have been given for the cheaper prices, the other Polaris resorts closer to the beach are charging over 200k for an apt of the same size (60m2 and garden 40m2).

We could probably get over not renting the property out but no capital appreciation ? I had a look at the spanishpropertyinsight website, very informative, Murcia comes in at 15.8% up on last year. I would hope to be able to sell this property on in 5 years time at a profit if we bore of it.

The city of Murcia has had large increases last year because of a shortage of good housing. I wouldn't lump one of these Polaris resorts in the same book though.

Forget rentals in these resorts unless you can get them yourself, and then look to the cost of servicing these rentals. The basic decision you have to make though is as follows:

1. Will you be happy to keep this property for a long term as a holiday home, and will you be likely to tire of it?

2. Will the costs compare favourably with what you normaily pay in rental?

If you are happy with all that, then at least you can be sure that it is well built and fairly well designed -- Polaris do some nice stuff. The price isn't bad, just make sure it is't a bady placed apartment or that it hasn't some other problem with it. Check also that it has a building license; the Almazora Country Club a bit further south was building away merrily without one and has now hit problems.

Remember though that you can get good value in Spain, and at least you are pretty sure of the weather for most of the year. Also, you can get there easily from Ireland. Alicante isn't too far away, also Murcia airport has been given the go-ahead. The existing airport at San Xavier also has regular flghts thru the uk. At a pinch, its not a long drive from Almeria and its motorway all the way with no tolls.

My own view though is that most of the Polaris resorts are located in the middle of nowhere, and don't do anything for me.

I am trying to figure out the annual charges payable on a spanish property, there seems to be maintenance, community, water, IBI (?) does anyone have any idea what these should cost and who they are payable to ?

Are there any other charges i have missed ?

There's 3 taxes to be paid annually

IBI Tax : Paid from July to September each year.
Rubbish Tax: Jan & July
Income and Wealth Tax: Usually December

Also,

- Community charges, depends on the cost of running the complex, places with golf and lots of landscaping tend to cost more to run.

- Management fees to look after the property in your absence, check for leaking pipes etc, and to provide keyholding/cleaning/laundry etc.

- insurance on contents, as well as liability insurance if renting out.

- electricity

- gas (if installed)

- water from metered supply

Dub75; does that IBI tax include the 'notional' rental of the property? I know it's based on the value of the propety and they actual formula was posted a few weeks ago on another thread.

thanks again for feedback, I have heard of the IBI tax something like 25% of 1% catastral value of the property but didnt know there was rubbish and wealth tax, what are these charged at ?

these costs are really starting to add up, starting to wonder if its worth the hassle .....

Lysa.

and don't forget the fixed water and electricity charges and Fiscal Representative Fees

At the moment my taxes are roughly;

IBI €750
Rubbish Tax 2 * €80
Income & Wealth Tax €830

The above is for the Marbella region based on a 3 bed apt. The water rates only work out at about €20 per month. That could be every 2 months I'll have to check. Electricity works out at about €60-€100 every 2 months. Community charges are €460 per quarter. These figures are based on private use only. We use the place about 10 times a year.

One last charges I forgot to mention. Management fees are €48 per month. That's to look after the apt etc.