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Buying a villa for the first time. Part 2
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Guest
Buying a villa for the first time. Part 2
Thank to everyone for the very usefull information on'buying a villa for the first time'. Moving on slightly, we are looking to buy a 3 bedroom villa with pool and as I said in in my previous question--holiday in it ourselfs and also rent out.Approx how many weeks of the year could we expect to rent out? Also approx, what should we expect to pay to a management company to look after the renting out, looking after the garden and pool etc. :
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Gordon
Most holiday villa companies will guarantee 18 to 20 weeks per year rental for a 3 bed villa with pool if in a reasonably good location. You could probably expect up to 22 weeks. A good agent will take care of all local taxes, maid service, pool & garden maintenance etc. We had our agent (Carvosol) give us a breakdown of a typical year's expenditure for guidance. The agent will normally recommend when villa maintenance needs attending to e.g. repainting etc. and will also keep you abreast of any possible changes to laws that might affect owners (e.g. Sisa tax and offshore ownership issues).
You will generally make a reasonable income profit but not a fortune after expenses. Our agents offered an ad-hoc agreement or a guaranteed income agreement. Ad-hoc might make you more money in good years but a guaranteed income means that you make money even if your villa is not let for the full season. We have not had a full season income yet as our villa purchase was not completed until end January last year, and the majority of villa bookings are made the previous autumn. However, despite having villa income for less than half the season the income was sufficient to cover all routine expenses, plus installation of a new hot water boiler, some major pool refurbishment, repainting and other work.
We try to use our place off-season, but with a guaranteed income agreement our agent will make 2 or 3 weeks available for our use in high season if we need it.
You will generally make a reasonable income profit but not a fortune after expenses. Our agents offered an ad-hoc agreement or a guaranteed income agreement. Ad-hoc might make you more money in good years but a guaranteed income means that you make money even if your villa is not let for the full season. We have not had a full season income yet as our villa purchase was not completed until end January last year, and the majority of villa bookings are made the previous autumn. However, despite having villa income for less than half the season the income was sufficient to cover all routine expenses, plus installation of a new hot water boiler, some major pool refurbishment, repainting and other work.
We try to use our place off-season, but with a guaranteed income agreement our agent will make 2 or 3 weeks available for our use in high season if we need it.
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Guest
im not sure that i would beleive you can get 22 weeks a year..ive been looking after villas for many years and the average is more like 12 -1 4 weeks.
and watch those management expense...i know of a german couple who who rent their house out for a full season and still end up paying the agent
..in the end it was cheaper to leave it empty
all sorts of minor things become major costs..so be very careful...better to find a friend who will do it as parttime job
and watch those management expense...i know of a german couple who who rent their house out for a full season and still end up paying the agent
..in the end it was cheaper to leave it empty
all sorts of minor things become major costs..so be very careful...better to find a friend who will do it as parttime job
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Guest
Take no notice of the message above, it's nonsense, if you have a "nice" villa that in your opinion people will want to go back to. We have a 3 bed 2 bathroom (1 on suite) on ADM and we are still fighting people off for this year that have been before and our management agent is tearing what's left of his hair out because he can't let it on our behalf. This year we are full from 12th April through 30th Octocber and we as owners have 8 weeks out of that. All of the people going out are "known" to us and have either been before for 1 week and extended to 2 or friends of friends that have been recommended.If you want to speak about this, leave your email address. Mike, Chislehurst.
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Guest
the person who claims that they have their villa full from april till oct then must be very very lucky. i repeat in my experience based on 10 years the average is 12 to 14 weeks....and it matters not a jot whether its lovely or not. do not be lulled in to a sense of security that your villa will be full....in reality the more and more villas that are now built means more and more competition.
It is all a question of prices and marketing. If I post my villa on carvoeiro.com making very sure it is the cheapest in its category, chances are high I will get it full first - provided it is not a complete wreck.
Houseowners renting out theirs houses for the first time must be aware of two things:
No matter how full you pack your houses, do not ever expect to get a reasonable medium or long-term return on your purchase investment - Rentals serve the purpose of covering the running costs of a villa and leaving you with enough money to keep a villa top-notch over the years. If you are not prepared to re-invest you will loose rentals in due time as the object starts to deteriorate and you will loose money if you want to sell it.
Second, these last two years have not been a picnic to say the least. As mentioned previously, the market is flooded with rental objects. On the other hand, economical situations across europe are leading more and more people to cancel their vacation to make funds available for more crucial purchases.
Do not underestimate where we stand in the food chain down here in the land of endless sunshine - when people run out of money, they will opt out services before they do posessions.
While other areas will soon recover from this slump, tourism will only be able to recover with the delay it takes for people to get more important things out of the way before they think about vacation.
Houseowners renting out theirs houses for the first time must be aware of two things:
No matter how full you pack your houses, do not ever expect to get a reasonable medium or long-term return on your purchase investment - Rentals serve the purpose of covering the running costs of a villa and leaving you with enough money to keep a villa top-notch over the years. If you are not prepared to re-invest you will loose rentals in due time as the object starts to deteriorate and you will loose money if you want to sell it.
Second, these last two years have not been a picnic to say the least. As mentioned previously, the market is flooded with rental objects. On the other hand, economical situations across europe are leading more and more people to cancel their vacation to make funds available for more crucial purchases.
Do not underestimate where we stand in the food chain down here in the land of endless sunshine - when people run out of money, they will opt out services before they do posessions.
While other areas will soon recover from this slump, tourism will only be able to recover with the delay it takes for people to get more important things out of the way before they think about vacation.
Maybe things are different with apartments, but we are almost full from 1 March-18 September, just a couple of weeks in May and June to fill. This is much more than we would have expected so early in the year, and a lot of the bookings have been made since last summer, we also had 4 weeks filled in January and February.
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Guest
As a hardworking member of staff for a management company who deals with a large amount of rentals I think a lot of good points have been raised.
I would like to say that a lot of people are misinformed about the amount of time they can let their property and the money they can charge by the people they buy the property from. I have found this recently when a client was informed this year that their property could be let out nearly all year round and make a substantial amount of money. It is true that in the summer months, good rentals can appear to bring in a good sum, but that is not by any way guaranteed all year round. For most people, it more than covers the costs, but is not what you might call an income when you look at the upkeep over a number of years (exterior/interior painting etc).
There is definately a lot more competition in the Carvoeiro area than in previous years, and looking at various internet sites, it is a wonder that many people manage to let at all when you look at the prices some charge. This area is still ideal for families, and when you look at what some charge for a three bedroom villa, it is no wonder they stuggle for rentals, some are just plain greedy. The average family cannot aford what many charge.
I am not saying that you cannot find rentals for the summer months, I just want to say tat it is not guaranteed all year round and you have to look at the prices you are charging because quite simply there is a lot of competetion!
I would like to say that a lot of people are misinformed about the amount of time they can let their property and the money they can charge by the people they buy the property from. I have found this recently when a client was informed this year that their property could be let out nearly all year round and make a substantial amount of money. It is true that in the summer months, good rentals can appear to bring in a good sum, but that is not by any way guaranteed all year round. For most people, it more than covers the costs, but is not what you might call an income when you look at the upkeep over a number of years (exterior/interior painting etc).
There is definately a lot more competition in the Carvoeiro area than in previous years, and looking at various internet sites, it is a wonder that many people manage to let at all when you look at the prices some charge. This area is still ideal for families, and when you look at what some charge for a three bedroom villa, it is no wonder they stuggle for rentals, some are just plain greedy. The average family cannot aford what many charge.
I am not saying that you cannot find rentals for the summer months, I just want to say tat it is not guaranteed all year round and you have to look at the prices you are charging because quite simply there is a lot of competetion!
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Gordon
As a relatively recent buyer I can only say that the figure of 18 weeks rental was guaranteed by a holiday company who were interested in taking on our villa.
I agree, though, that it would be mistake to buy a villa assuming that you can make a living from the rental. We bought now with a view to semi-permanent residence following (hopefully early) retirement. The rental income we use to keep the place in good condition and to pay for improvements. Any left-over money we put aside against the possibility of having to convert from offshore to owner/occupier status and pay the Sisa tax.
Our place is along the raod from Monte Carvoeiro. It takes about 15 minutes to walk to town (downhill, gravity assisted), and about 20+ minutes to walk back (uphill, Portugese food & wine hindered).
If you have any other specific questions please email us at gslow@omantel.net.om. We are happy to give any advice/info. we can - we were greatly assisted by Carvoeiro website users when we were in the same position - a belated thanks to everone.
I agree, though, that it would be mistake to buy a villa assuming that you can make a living from the rental. We bought now with a view to semi-permanent residence following (hopefully early) retirement. The rental income we use to keep the place in good condition and to pay for improvements. Any left-over money we put aside against the possibility of having to convert from offshore to owner/occupier status and pay the Sisa tax.
Our place is along the raod from Monte Carvoeiro. It takes about 15 minutes to walk to town (downhill, gravity assisted), and about 20+ minutes to walk back (uphill, Portugese food & wine hindered).
If you have any other specific questions please email us at gslow@omantel.net.om. We are happy to give any advice/info. we can - we were greatly assisted by Carvoeiro website users when we were in the same position - a belated thanks to everone.
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Carole
Renting Villa
Renting a villa can merely be a matter of which rental company you use.
I agree with those who say that you do not make a fortune from renting, but can at least cover your running costs.
Our villa is currently with B & A in Carvoeiro and backs on to the Vale de Milho golf course. They have plenty of vacancies for this year.
However if anyone is interested they can contact me on my e-mail - no adverts or telephone 01252 370421.
I agree with those who say that you do not make a fortune from renting, but can at least cover your running costs.
Our villa is currently with B & A in Carvoeiro and backs on to the Vale de Milho golf course. They have plenty of vacancies for this year.
However if anyone is interested they can contact me on my e-mail - no adverts or telephone 01252 370421.
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Guest
the guarenteed rental of 18 weeks is usually a contract deal whereby the house is reserved and the company aims to fill it or not as the case maybe.. any income is usually less that adhoc rentals..which usually work out an average of 12 weeks.
if you are happy with a contract rental then proceed...take care that if the villa is not perfect then some holiday firms demand money back or just deduct any of the reimbursments made to their clients from your cheque.
if you are happy with a contract rental then proceed...take care that if the villa is not perfect then some holiday firms demand money back or just deduct any of the reimbursments made to their clients from your cheque.