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Go Back   Pollensa Forum > LIVING & WORKING IN POLLENSA > Living & Working in the Pollensa Area

Living & Working in the Pollensa Area This forum is for any comments, questions and advice about living (permanently or temporarily) and working in the Pollensa area. Aimed at ex-pats, property owners etc.

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  • 4 Post By mallorcaboy
  • 3 Post By Rockape
  • 1 Post By alcanadakid
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  #1  
Old 21-07-2021, 16:46
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Default Thinking of buying?? Is it worth it??

Here’s an interesting question. Is owning a property in Puerto Pollensa (or Spain in general) a “good investment?”
We paid around €135000 for our one bed apartment in Pinaret in 2018. Add to that the 10%, or in our case 11% legal costs. (around €150000)
We don’t rent, so no income, which in my view would be fairly minimal when you factor in that we want to be there as much as possible (we’re retired), your tax liability, additional maintenance etc. Plus living in the Covid era reduced any renting possibilities. This may change, but who knows to what extent (You may feel differently to this, but the hassle and stress would be a nonstarter to us)
Wealth tax payable yearly on a non rental for our apartment including solicitors fees completing our tax return is around €340, additional costs like insurance, community charges etc around €450. Electricity charges aren’t easy to understand even if you are a seasoned owner, but maybe around €600 a year Add to this any minor works you might need/want to do (fix that leaking tap, move that annoyingly placed socket etc), so let’s say an outlay of around €1400 per year
We had air con fitted too at €3000 but others might not want to do this
I haven’t researched the annual increases in prices but lets say maybe 5-7% a year, so over 5 years (around €170000) so that might increase your investment on paper by €15000 with an accumulated expenditure of around €6000 leaving a paper profit of around €9000
Let me add at this juncture, I am being very approximate with these figures. There is compound interest etc which, as I have not calculated this may or may not annoy you (sorry about that if it does) I also may have overlooked something major which might alter these figures dramatically one way or another, who knows, I’m sure you’ll point them out 🤣

Of course you need to add outgoings like, actually travelling to and from your property from UK, plus spending money whilst there. You might say, “well we go on holiday anyway”, but I can assure you, actually having your own little home there, and having the odd “cheeky weekend” is going to be a difficult temptation to resist
When you come to sell, you’re going to pay maybe 5% to the Inmobiliaria, and Capital Gains Tax on any profit.
So I would say financially, not a brilliant investment, particularly when you consider the large amount of capital you put in. Also, if you are getting a mortgage, obviously that will impact these figures dramatically.
Having said this, there is one element that totally swings it in favour of owning a little place there…and that is that you own your own little place there 😎. We get huge pleasure from just being in our “own home” 200 meters from the beautiful bay. You’re not renting, you’re owning. It’s not a two week holiday, it’s spending quality time in your home. For us, being able to spend long periods (well 90 days in 180 since Brexit) and forgoing the 14 night eating out, is by far outweighed by the lovely evenings strolling up to the sea front in cut downs and an old t shirt after a day of painting a bedroom, or sorting out some cupboards, then stopping at the local bar, Bar Bondia in our case, for a beer or a coffee with other owners who have become lovely friends
You may feel very different to us. You may have had experiences that are totally opposite to ours, and for that, we are very sorry. You may see the figures differently to ours, I mean I’ve only owned property in PP for 30 years, so I might be wrong 😂, but my advice to anyone who has thought of owning and is teetering, do it. You may regret it, but I doubt it
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Old 21-07-2021, 18:22
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I agree with you 1000%. I'm not retired, I only get to stay 5-6 weeks a year at best and I bring my work with me sometimes but I'm just so happy to hide away from all the %$£ just for a few days. Looking scruffy and heading to the pub after a bit of DIY is a speciality of mine.

P.S. Have you ever worked out what your none rental tax actually is? I also pay via the solicitor but in return he does give me the odd bit of advice via email...

I've been home 2.5 weeks now and I've broken my golden rule of always having my next trip booked before leaving Pollenca!!
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Old 21-07-2021, 19:04
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Quote:
Originally Posted by bobley View Post
I agree with you 1000%. I'm not retired, I only get to stay 5-6 weeks a year at best and I bring my work with me sometimes but I'm just so happy to hide away from all the %$£ just for a few days. Looking scruffy and heading to the pub after a bit of DIY is a speciality of mine.

P.S. Have you ever worked out what your none rental tax actually is? I also pay via the solicitor but in return he does give me the odd bit of advice via email...

I've been home 2.5 weeks now and I've broken my golden rule of always having my next trip booked before leaving Pollenca!!
No I’ve never worked out what the tax is net of my solicitor’s fees. To be honest I wouldn’t want to do a Spanish Tax Return myself, although I have friends who do and say it’s straightforward. Just lazy I guess😃
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Old 22-07-2021, 10:40
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It was slightly unusual circumstances that made us buy our place at the end of 2017. I had brought my young family out to PP three times in the early 2000's and used look longingly at properties at the time. Then, we started doing the AI holidays in places like the Dom Republic, Turkey and Mexico and slowly forgot about PP.

In 2017, I thought we should buy a place in North Devon that we could do up, rent out and eventually spend a lot of our retirement there, but my wife said she didn't want to spend long winters in Devon, she wanted to be somewhere warm (er)! So I thought....hang on, what about PP and started to look online at what was available. a few weeks later we were on the plane (Late Oct) and arrived to a few days of glorious weather, which obviously sealed it. By the end of December, we were the owners of a rather tired Townhouse close to the beach.

Almost from the moment I signed on the dotted line, my business had a major downturn and I spent the next few months wondering what I had done! But fortunately things turned around and we've now managed to get the place up to scratch and are loving it. I recently took some old mates out for a six day trip and they were in no doubt I'd done the right thing.

Its definitely not for the faint hearted, but just knowing its there waiting for our next trip does give you a warm feeling inside. Is it worth all the money? I suppose if you have the money spare then for us, definitely, but if you have to scrimp for it, possibly not!
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Last edited by Rockape; 22-07-2021 at 10:43.
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Old 22-07-2021, 15:16
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Dont forget the impact of the exchange rate which can dominate any loss or gain.

We were fortunate to buy in 2004 when the exchange rate was 1.53, so that transcribes to a 33% gain in sterling terms before the other factors are condidered.
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Old 22-07-2021, 16:31
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Two weeks villa rental in the summer for our family of 6 adults and 3 children would run to over £8,500, which is about what our three bed apartment with roof terrace and shared pool (with 3 others) and running a car out here costs for the whole year. Being able to come over whenever we want (Covid allowing) is a great boon. We bought in 2018 and in a usual year the family collectively get 20 odd weeks use out of the place. Even last year we got five trips in and are currently here for our second fortnight this year. Without the apartment we simply wouldn’t be here.
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