Value in the Algarve? - was "Reality Check"

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Homer

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We've been looking at properties in the Algarve for the last couple of years, but have been unable to find anything that we really like at a reasonable price.

There was one two bed roomed apartment in Alvor that ticked all the boxes, but at €350,000 we felt it was just too expensive. We saw a number of other places for around €250,000 to €300,000 that were nice enough, but at that money, we wanted better than just nice.

Imagine then our surprise when we saw a program on Channel 4 last week in which a couple with £80,000 (around €115,000) to spend were shown four options around that price range including what looked like a really nice two bed roomed apartment a few miles outside Alvor that they bought for £78,000.

There's a huge disconnect in price terms between the apartments shown on that program and what we were shown by various estate agents in Portugal. What we want to know is, who's kidding whom? Are we being shown vastly overpriced apartments (maybe on the not unreasonable assumption that Irish investors are prepared to pay vastly inflated prices) or were the prices shown on the program a scam and not really representative of what is available in the market there.

If the latter, we may hold off a while before buying (if at all). If the former, how do we go about locating the type of value shown on teh Channel 4 program?

Regards
Homer
 
Re: Reality Check

Homer,
That few miles outside Alvor makes a big, big difference.
I'm inclined to believe there's still good value if you search for it, and particularly if you're willing & able to do some decorating.

For what it's worth, A Place in the Sun prog can go the other way too. They had a show on Rhodes recently, showing very ordinary apartments at €200K +. If you look yourself, you'll find one for not much more than half that.
 
Re: Reality Check

Check when the programme was made as well as where exactly they were looking. In general, these programmes are a poor guide to investing abroad, and are simply a brochure format for whatever agency is working with the programme team.

The other thing to watch with these programmes is the nonsense that is almost always inserted about rent. "You can of course get up to £500 a wek for the property should you decide to rent it" is typical, and nonsense in most cases, but it helps to sell the property.

These programmes should be taken with a huge grain of salt. They are selling dreams, and most of theior target audience will never buy a home in the sun, so it doesn't matter if they ladle on the bull**** in large doses.
 
Re: Reality Check



I disagree in the case of "A place in the sun" anway. I find this programme good in the sense of finding properties that match people's requirements; pointing out the extent and cost of any renovations/improvement and providing some expecation of what rental income is achieved. I would accept that the Irish equivalent "Househunters" is a lazy, half-arsed excuse of a programme which makes little attempt to actually listen to, much less respond to, the requirements of those they make out to be helping.
 
Re: Reality Check



€350k for 2 bed apartment in Alvor does not look anything like good value - its largely a very unremarkable village along the coast. Also have to be careful as Portugese are going to cover the coast in apartments.

ECB interest rises will deflate these prices thru 07 and 08.
 
Re: Reality Check

The series of Place in the sun currently running on channel 4 is recently made.
Beware of years-old repeats on the discovery channels though.

And in any event, I'm sure you're doing your homework & not putting too much emphasis on their glib comments regarding rental potential.
Also agree that the Irish version of the show is a pale imitation - started off not bad, but has gone way downhill.
Good luck with your search - I believe there are still good properties out there if you look hard enough.
 
Re: Reality Check

Jock04 said:
Good luck with your search - I believe there are still good properties out there if you look hard enough.
Click to expand...

Thanks Jock

I'm realistic enough to accept that rental income can be very hit and miss and my view is that anyone who buys a foreign holiday property purely as an investment needs their head examined. And anyone who buys a foreign holiday property in circumstances where they are relying on the rental income in order to pay the mortgage should have their passport confiscated for their own sake.

Having said that, it would be nice if you could get enough rental income to cover your annual service cost, rates, depreciation, etc. so that you don't end up just having a very very expensive holiday in the same place every year.

I agree that there probably is some value to be had somewhere if you look hard enough, but I am struggling to look in the right places. The approach we have taken so far is to talk to a number of estate agents at the various foreign property exhibitions that are held in the RDS from time to time, visit properties with them when in Portugal (though not on formal inspection trips; we don't want to feel like we're being held hostage for a few days), look at various websites, including sundry google searches and look in estate agents' windows when we are over there.

To date, we have not come across anything that would qualify as even close to a bargain and I imagine there must be at least some people who own properties in the Algarve who would be willing to accept a realistic price in exchange for a quick, hassle free sale. If they're out there, how do we find them?

Incidentally, in response to Maine's comments, I agree that €350k is too expensive for a 2 bed apartment in Alvor (even if it is a very nice apartment on a very nice complex), but I don't agree with his overall assessment of Alvor. We've been there on several occasions and really love the place. I guess that's just a matter of taste; if we all liked exactly the same things, it would be a very dull world indeed.

Regards
Homer
 
Re: Reality Check

Thanks Sarah

I'll post the result here if I end up buying something.

Homer
 
Often these programmes are repeats that can be around 3 or 4 years old. SOmetime even if a prgramme is a year old prices can be way out. It is these programmes which have a profound effect on what then become "bang wagon" investments such as Bulgaria. It is flogged to death on tv programmes then sales agents but then with repeats of the shows time and time again on Sky and channel 4 people are watching programmes fro over year ago. A prime example is Real Estate TV. They have a programme called next big thing (Next Big Thing: Morocco, Next Big Thing, Caribbean, etc etc). These are reruns of programmes some nearly 2 years ago and they are shown every week!
 
I've managed to locate an apartment in Alvor at what seems like a reasonable price (at least, more reasonable than some of the other properties I've seen over the last couple of years) and I'm hoping to close within the next month or so.

One issue that has come up has slightly surprised me. When I spoke to my lawyer about getting a survey done, I was told that it is very unusual to have an apartment surveyed, other than by a bank when a local mortgage is being obtained. The lawyer did however give me contact details for two surveyors and said it was up to me if I wanted to have a survey done.

As we will not be getting a local mortgage, I would welcome any advice on whether or not it makes sense to have a survey carried out. I don't want to be foolhardy for the sake of a few hundred euro and a slight delay in closing the sale, but nor do I want to throw away money if there is no point or value in having the survey done.

The apartment is on the ground floor of a smallish apartment block in a large complex and is about 12 to 15 years old.

Thanks

Homer
 
Maybe the solicitor misunderstood and is confusing the buyer's private survey with the lender's valuation survey? If s/he was then I would be concerned about either (a) a communication/language gap or (b) a lack of expertise. If I was buying a property anywhere then I would always get a professional to look at it. So I personally would recommend that you get a reliable and properly qualified/authorised surveyor to check it out. Not necessarily those to whom I was referred by this solicitor who I would also be questionable about. Of course I am working off partial information here.
 
My lawyer has fluent English and seems to be very professional. She was recommended to me by someone who had used her.

I initially raised the question with her about the survey and she said that it was probably unnecessary if the apartment was relatively new. We subsequently had a telephone conversation and she said that it was entirely up to me but that none of her clients buying an apartment had ever had a structural survey done, although it would always be done if you were buying a villa.

She sent me two names, both of whom sound English, but I have not yet contacted either of them. My gut instinct is to have the apartment surveyed, but I just wanted to get some advice before making a final decision.

Thanks

Homer
 
The same reasons for having a survey done on a house apply when buying an apartment. In particular, you need to be sure there are no serious structural problems with the building as a whole. Why would an apartment block necessarily be less prone to such problems than a house?

If it was me, I'd get a survey.
 
Thanks for the advice.

I've arranged to have the property surveyed this Friday and it will hopefully get a (relatively) clean bill of health. The surveyor remembers surveying the property when it was new and said that he figures he's not likely to find anything major, but he will give it a thorough going over just to be on the safe side.

Homer
 
The apartment has been surveyed and is structurally sound. There are one or two minor problems, but no deal breakers so we're going ahead.

Can anyone suggest where we might find an online guide to buying/owning a property in Portugal? I know about the various taxes and charges payable on the purchase and the amount of the annual community charge and local property taxes, but something that has a checklist of other things we need to do would be very helpful.

We've already gone through a lot of this with our lawyer (fiscal number, property insurance, bank account, fiscal representative, utility bills, advisability of having a Portuguese will, etc.) but there may be other things we need to think about that we might overlook and I would also like to know where we could find out about what taxes we might have to pay on any rental income, what expenses we can offset against this, what records we should keep and what are the Irish tax consequences.

Apologies if this is all covered in another thread, but the very helpful thread at the start of this section is primarily about buying rather than owning a property.

Thanks
Homer
 
Hi Folks

I'm still trying to find something that would take me through the nuts and bolts of owning a property in Portugal.

I've tried various searches, but they all seem to direct me to sites that are selling or renting properties and the advice they give, while helpful, is generally quite superficial.

I'm coming to the conclusion that there may not be a suitable online guide that can be accessed on the internet. This leads me to ask if anyone can recommend a book I can buy on the subject. I'm sure there are quite a few out there, but a recommendation from someone who has been there, done that, would be very helpful in narrowing down the field.

Thanks
Homer
 
is based over in Portugal these days as far as I know. Maybe she could point you in the right direction?
 
On Amazon: "The Complete Guide To Buying Property In Portugal"
 


Are these sites any good

[broken link removed]
http://britishexpats.com/forum/forumdisplay.php?f=89

Murt
 
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