Renting v Buying

[Steve&Yvonne]

Can anyone help with this?

What are the relative pros and cons of buysing or renting a villa for the first year or two of living in Andalucia.

Steve

[chrisuk]

Hi Steve, not one of the easiest posts to answer but I'll give it my best..
For awhile Im going to rent as I'll then get used to the region as a whole, as for the house it depends but renting for me is going to work out just great, where Im staying right now for example is not practical as it doesnt suite my needs, to far from anywhere for me from suppliers and things to do so alot closer to Malaga Im heading as Im roughly a good hours drive from there

[lis48]

If you rent first you can suss out the areas and avoid expensive mistakes in setting up such as an inappropriate boiler or not having a landline when you use a pc daily, however you might be affected by rising house prices. If you buy first it is more settling for the family, schooling etc. and I guess you feel more committed to living here but how do you know which area suits you best till you've lived there? All depends I think on whether you have children as they will have enough to cope with moving out here without changing school and home as well. I've seen kids be sent to three or four different schools in a year as parents move from one rental property to another and they wonder why the kids won't settle in Spain!

[silver]

There is another option...of renting with an option to buy after one year..this would only be valid if you all ready have a good idea of where you want to be and if the seller would agree to this... With this option if you decide to buy then the rent you have payed would be deducted from the established sale price...
If you don't have children..a flat would do as a base while you look around.

pros and cons of buysing or renting a villa for the first year or two of living in Andalucia

The same pros and cons for moving anywhere.

[katy]

It maybe better to rent at the moment as doubtful that property will rise short term. many people I know who bought first very quickly moved on as its like marriage you don't know until you've experienced it Its also expensive to buy and sell here.

We loved our first place here when we were just coming and going but found we couldn't wait to move when living here permanantly

In a property boom its different as a friend rented for a couple of years trying to decide and they were priced out of the market.

[safeashouses]

Paying rent is of course putting your money into someone else's bank account and assisting them with their purchase.

Silver your renting with an option to buy sounds a great idea.

[silver]

Silver your renting with an option to buy sounds a great idea

Thanks..but its not my idea...Its not unusual, I have know a few who have opted for this way..Its not always possible..but well worth trying when/if you find a place you would like to buy you can offer this option to the seller...more often than not they will take it...and it works out good for both.

[Blubba]

Can anyone help with this?

What are the relative pros and cons of buysing or renting a villa for the first year or two of living in Andalucia.

Steve

Hi, I'm recently divorced and soon to be moving to Spain, I have thought of buying but not yet the prices are totally out of line with reality so I'll wait a bit, I've rented a nice apt in Rota 2 bed, 2 bath, 3rd floor, nice balcony, 550 a month, not bad at all, but villas can be hellish expensive, I would definitely rent first and take a good look around!

[citymike]

Paying rent is of course putting your money into someone else's bank account and assisting them with their purchase.

Silver your renting with an option to buy sounds a great idea.

Of course it all depends on circumstances and the level of rent. I had enough money to buy a 2 bed apartment but I chose to rent instead. My monthly rent was 230 euros. To buy the same apartment would have cost 120K which with transaction costs would have increased to 132K. The interest on 132K at 4.5% is 495 euros a month. The owner of the apartment is losing 265 euros a month, imagine if they have to pay off the capital as well!!! In those circumstances I would rent.

[safeashouses]

The property would presumably go up in value during a one or two year rental period. Also a property to rent for €230 a month has to be an extremely rare find.

[Sad K]

Paying rent is of course putting your money into someone else's bank account and assisting them with their purchase.

Silver your renting with an option to buy sounds a great idea.

Of course it all depends on circumstances and the level of rent. I had enough money to buy a 2 bed apartment but I chose to rent instead. My monthly rent was 230 euros. To buy the same apartment would have cost 120K which with transaction costs would have increased to 132K. The interest on 132K at 4.5% is 495 euros a month. The owner of the apartment is losing 265 euros a month, imagine if they have to pay off the capital as well!!! In those circumstances I would rent.

CityMike, Hi, I and probably several million more people would be obliged to you if you could supply us with the name and contact details of the organisation that will give you a return of 4.5% on a mere 132k, is this a dream you had or do you have a deal with some eastern Europeans, please give us the info, thanks Sad K.

[citymike]

I'm delighted to help, please don't resort to dodgy deals with eastern Europeans when you can get returns of 4.5% with ING bank in the UK, or 5% from First direct or a whopping 5.15% from ICICI bank

If you were to buy the apartment at 132K then your return would be 2% and that assumes no voids and no maintenance charges.

[citymike]

The property would presumably go up in value during a one or two year rental period. Also a property to rent for €230 a month has to be an extremely rare find.

Why do you assume that the property will go up in value? Do you believe that property will continue to increase in value indefinitely? Is there a point at which property in Spain will be fairly valued and how far away are we from that point.

230 euros is cheap rent but then 130K to buy an apartment is also cheap. I imagine that on the coast it would cost twice as much to rent an apartment but also twice as much to buy such an apartment which still leaves a rental yield of 2% IF you don't have voids or maintenance expenses.

[safeashouses]

I didn't say ASSUME.

[citymike]

From the Merriam-Webster Online Dictionary, http://www.m-w.com/dictionary/presume. One definition of presume is to " to expect or assume especially with confidence" so let me ask again, why do you expect or assume with confidence that Spanish property will increase in value in the future? Is that clearer?

[lis48]

Any student of English will tell you that there is a difference between assume and presume though the two words are today often confused as meaning the same. Presume is used when you suppose something to be purely for the basis of an argument. Assume is stronger and where you count on something definitely being the case. Look at the difference between saying "I presume that if it rains, we won't go" and "I assume that if it rains we won't go". The latter is much more definite isn't it? I assume Safeashouses was just presuming about house prices as an argument as no-one could assume them these days.

[citymike]

Any student of English will tell you that there is a difference between assume and presume though the two words are today often confused as meaning the same. Presume is used when you suppose something to be purely for the basis of an argument. Assume is stronger and where you count on something definitely being the case. Look at the difference between saying "I presume that if it rains, we won't go" and "I assume that if it rains we won't go". The latter is much more definite isn't it? I assume Safeashouses was just presuming about house prices as an argument as no-one could assume them these days.

Thanks for that, Lisa. I'd agree that assume does seem to be more definite and I can see the difference in the context that you gave. I also agree that no one can assume house price rises these days so I imagine given the figures that it would be better to rent?

[katy]

Estate agents say they assume prices will rise

[Chalky]

There's an old saying - To assume is to make an ASS out of U and ME

[Sad K]

To "presume" is to take for granted in the absence of proof to the contrary, ie a suspected criminal is "presumed" to be innocent, until proven guilty.

To "assume" is to take opon oneself, ie "assume" responsibility.

Both words are interchangeable when the general connotation is "to suppose".

This expalanation was given to me by my neighbour and friend who is a senior grade schoolteacher, I "presume" it to be true!