Episode 22: David who purchased in Oliva, Valencia

4th June 2018
Podcast host

Guest

David

Host

Beth Davison

Podcast location

Relocated from

Durham

To

Oliva, Valencia

Podcast agent

Real estate company

Oliva Casas properties for sale
Episode 22: David who purchased in Oliva, Valencia

This week we’re joined by David, enjoying his retirement with his wife in Spain as both landlords and property owners in Oliva, Valencia. We discover how he and his wife bought their first place in Oliva in the 1980s after relocating from Indonesia. Tune in to hear David’s advice about hidden costs and the importance of learning from experience when buying abroad.

Show Notes

  • [1:45] When David first thought about buying in Spain
  • [2:55] How David has seen Oliva change over the decades
  • [4:20] How David and his wife decided to rent out their properties
  • [5:37] What’s it like being a landlord in Spain
  • [6:37] What it’s like to relocate permanently
  • [13:20] How David found the place he was looking for to live in permanently
  • [15:23] Description of his house
  • [16:40] David’s budget
  • [20:10] David’s advice on buying for the first time

Links:

Kyero.com

Oliva Casas

Read Full Transcript

Intro


Welcome to the Kyero.com Spanish Property podcast where we interview people who recently purchased a home in Spain.

They tell us what worked, what didn’t and what they’d do differently next time.

I’m Beth Davison and today I’m speaking with David, from Durham, who owns four houses in Oliva, Valencia.

Now landlords as well as property owners, David and his wife Cynthia have seen the region change a great deal over the years and, despite the expat community, would love Oliva to stay their best kept secret.

He worked with estate agent Oliva Casas to find his dream home in Spain.  

Check out the show notes at kyero.com/podcast to find links and resources mentioned in this episode

 

Body of Transcript

David:  My name’s Dave and I am retired and I live in Oliva. Currently I have four houses in Oliva. One I live in, two that we do long-term rents in and one that we do short-term rent in.

Beth:  Was it always the plan to have multiple properties?

David:  No, it wasn’t. Unfortunately, I had to retire early. So, that puts us in Oliva many years ahead of what we thought, so that gave us different opportunities and we’ve been very lucky to have Jane from Oliva Casas guide us over the last few years. We’ve picked up some good properties and made them into a bit of a pension fund for ourselves.

Beth:  Yeah, it sounds like a big venture. So, how long ago were the very first conversations of, “Let’s head to Spain?”

David:  I believe around 1985 we bought our first property. That was literally just somewhere to get out of the UK. It was a miserable rainy, bleak Sunderland Easter Sunday and we thought that we just can’t stand it anymore. We needed somewhere where the sun shines. So, we bought a house then and we’ve been coming for twenty-five years for the odd summers and eventually we decided we’d like to live here in Oliva, so we bought the second house and it has gone on from there.

Beth:  Was it Oliva that you were in 1985? Was that where you were visiting? Or have the regions that you go to changed over the years?

David:  No, it has always been Oliva. It seems to just be the sort of town we like. We came, and fell in love with it the first few days we were here and have been in love with it ever since.

Beth:  Wow, that’s great. So, you’ve really seen the area change and evolve over time.

David:  Yeah. Back in 1985, 1986, 1987 there were very few expats and then quite a few Brits came and went, and then the Germans came and went, and the Dutch came and went, then the Brits came back and now, right now, there are these huge influx of Brits and Germans and a few French. So, it’s becoming very cosmopolitan here in Oliva.

Beth:  Do you like that? Do like the kind of socialising element to it and the multiculturalism of it all?

David:  I do but I hope it doesn’t get too full of expats because I do love where we live now. We’re surrounded by Spanish people. They speak Valencian here in Oliva, so they don’t speak Castilian. So, it’s nice to feel a part of the real Spain. It’s a working town that has a couple of orange factories – orange juice factories. So, yeah, I think the expats coming helped here to revitalise the town but hopefully not too many because we do want to live in a Spanish town.

Beth:  Yeah, that’s fair enough. I can understand that. So, how long ago was the purchase of the second place?

David:  The second house was in 2000.

Beth:  Was it always your plan for that to be a kind investment and that to make you some money? What lead to that conversation?

David:  Yeah, again, Cynthia and I had been living in Indonesia and we came back to Europe and we came back with our expat bonus and nothing was happening in the banks, so we bought a two bedroom bungalow with the thought that it might be a good retirement home because there are not many bungalows in Oliva. So, two double bedrooms on the ground floor, sitting room, dining room, nice big huge sun terrace, if you can get up the one set of stairs.

I originally bought with a vision of that we could retire in it. Then we did a lot of work to it and got it fully renovated and looking very pretty. Then a single Dutch couple came along and asked if they could rent it, so we rented it to them. Now we have a Romanian family living in that house currently. That’s one of our long-term rentals that we have.

Beth:  Yeah, so it all kind of evolved. It was never the original plan for it. Was it a daunting thing to become landlords in a foreign country?

David:  Yes and no, it’s always a little bit scary because of the tax implications and making sure you don’t upset too many locals, or upset the local authorities. Again, with Jane’s help and our lawyer, Joaquin, we tread our way through it the second time – not a problem.

Then the third time was 2014, which is the one we bought for us. That’s when I retired, and we bought this one to live in. This, the one that we are living in was pretty much already renovated, so we just had to add some final touches to it to make it livable.

Beth:  So, it was in 2014 that you moved permanently out there and that was when the big relocation happened. How difficult was that? How hard is it to relocate permanently?

David:  I think if you do you research and you use reputable companies, it’s very easy. We used a local company to us, in Essex, who advertised that they had a Spanish partner. So, we researched the Spanish partner and we got some good feelings from them. I sent them a few emails and told them the address they were going to be delivering to because a lot of Spanish towns are one way streets, just wide enough for a car never mind a big truck.

To my surprise, the company here in Spain sent me a photo of the house and asked, “Is this your house, is this your street?” We found it on Google Maps and we were very happy that we can deliver all of your stuff there no problem. So, they made it very easy for us.

Beth:  Fantastic, and did it make the landlord process easier now that you’re in the same country, presumably? How far are you from your tenants right now?

David:  This very moment I’m five minutes from two of the houses and seven minutes from the other.

Beth:  Yeah, so it’s all really nice.

David:  Yeah, it’s all boots on the ground for us. The last house we bought through Jane and we use Jane as our rental agent. So, she controls everything for us and makes sure that we’re all legal and she’s there as the emergency contact. It is nice to be around.

For example, this morning some of our short-term renters have come back. They’re from Darlington and they’ve come back to stay with us for six weeks and they couldn’t get on the internet. So, rather than Jane having to do it, George just called me and I just popped around and I set up the internet for him and got him some wood for later. So, it’s nice to be able to be available to your tenants, but also to have Oliva Casas and Jane to do the legal stuff and to be the main focal point.

Beth:  Yeah, totally, it’s a really nice combination of the two. When you were looking at the properties initially, how did looking for a property to rent differ to looking for a property that you guys were going to live in? What priorities changed for you?

David:  I think you need to understand the market. For example, here in Oliva probably five hundred Euros a month is the maximum you’re ever going to get. So, then you have to say, if I’m only going to get to five hundred or I’m going to get five hundred what’s that percentage in return for you?

So you have to set your budget according to what you want on your return on investment. So, for example, the one we just bought in November, we were looking for upwards of four per cent. So, we looked at several houses with Jane and found the one we liked. It sort of fell into our price range, and then in Spain you need to work out or find out from the estate agent who is paying the fees.

In Jane’s case the seller pays the fee but in some Spanish estate agents it’s 50/50 the seller and the buyer pay the fee. Some of them only charge the buyer so it’s like a finder’s fee. So, you need to understand those things. Once you know that bit you then have to roughly add fifteen per cent onto your buying price to cover your purchase tax, which is ten per cent, and then your legal fees and your notary fees. So then you build it up from there. So, you’ve got your base price plus your fifteen per cent and then you look at what renovations you’re going to do, whether you’re going to rent it with furniture or without furniture, roughly how much that costs, then you get your rough or park figure at the end and work on how much rent you can get and have you got ROI or not?

Beth:  Right, you sound very knowledgeable in this, probably because you’ve done it several times now. How much of that knowledge did you have already, going in, and how much of it was entirely new to you and just research that you did?

David:  I had no knowledge when I went in. I think we learned a lot from the first house and then learned more from the second house. Once we got to know Jane and Oliva Casas and Joaquin, our lawyer, they just make it much more fun.

The more we looked the more we realized what the opportunities were, the more we realized the pitfalls. So again, here in Oliva, there are problems or there can be problems with electricity, so you need to understand how the electrics work. What potential is it? Do you need a new bulletin? Do you need an outside meter?

So, understanding what the local bylaws and what it’s going to cost you, because a lot of houses still have an inside electric meter and a new law says the meter must be outside. So that can easily add six hundred to seven hundred Euros to your purchase price because you’re turning the meter around. Once you’ve turned the meter around, unfortunately, you have to have Iberdrola, the state electric company, come and check it for you and approve it, which is another three hundred Euros.

So, it’s all those little things that you learn and just pick up along the way. If you have good folks like Jane or Joaquin then they’re holding your hand and now, if Jane’s a little bit pushed, she’ll ask me if I’ll show a house to somebody and then I can explain all that to them, add your fifteen percent, look at the electrics, this is potentially another four thousand to have it rewired. Look at your water pressure, stuff like that.

Beth:  So the student becomes the master, I love that.

When it comes to your own house, so the one that you then decided to live in, talk me through that process a little bit. How many did you view before you found the right one? What was it that you were looking for?

David:  Originally the two bedroom bungalow that I told you about, we thought we would maybe renovate that and put a second floor on it and so we went off and found an excellent architect who had a lot of sway with the local town hall and he came up with four or five ideas for us.

But then when we asked him if he was project managing, how much would he charge, how much did he think the project would be, and he said between seven hundred and eight hundred Euros per square meter. Then we suddenly realized, wow, it’s cheaper to buy a house that’s already available and pretty much done.

So, we started to look and probably saw somewhere between fifteen and twenty, twenty-five houses and had pretty much given up on finding what we wanted. Suddenly, a friend of ours said, “You know there’s a house around the corner, and the guys are selling it, and we have keys.” We got to the front door and opened it and looked at each other and said, “This is it.”

Beth:  Which must have been a good moment - when you say you were at the point of giving up was that because everything that you were seeing wasn’t quite right?

David;  That’s right, it just didn’t have the wow factor, that cozy feeling that you need, I think. I told that lately over the last three years in particular there’s been lots of people who have moved to Oliva - friends of ours, or friends of friends, and when I show them around I tell them the same thing, “Just keep looking and keep looking and when you look at each other and smile you know you’ve found the right one.”

Beth:  So what was it about this house that made you look at each other and smile?

David:  The initial impact was the two huge original front doors. That would allow the donkey and cart to come into the house and go to the barn at the back. So those were still there intact. As we came into the house the big high ceilings – it was just the layout.

Having lived in Indonesia we had a lot of big, heavy wooden furniture that we brought back with us and we could see it would all fit in this house. As we got further into it we realized that at the back of the house is an almost private apartment, which is where we live. So we have our own bedroom and ensuite at the back of the house. Here in the front of the house, upstairs, there are two double bedrooms and a bathroom and a sitting room.

So, just instantly there was all sorts of imagination going on as to how we could adapt it and develop it to what we want. Then our family and friends can come and visit and they live at the front of the house and we live at the back and we meet in the middle for lunches and dinners.

Beth:  Yeah, so, do you mind me asking what your budget was for something of that size?

David:  For this house we were hoping to get it under two hundred thousand.

Beth:  And that’s Euros?

David:  Euros, correct, and we got it for substantially less than that, so we were very blessed.

Beth:  Wow, it seems amazing for that much space that you’re describing it seems like a really good value.

David:  Yeah, it really is. Compared to other parts of Spain, I think Oliva is still the best value for your pound or Euro. It’s in the middle of the two airports. So, you can fly to Alicante or Valencia. It’s on the auto vista so you’ve got a toll road that can get you right here that has its own off ramp.

I think because it’s still a working town you can pick up some good properties. The one that we just bought through Jane and have almost finished renovating we just actually had a tenant sign on the dotted line today, a Dutch gentleman to rent it for a year.

In our research for looking at where we could pitch the rent on that, we had some German friends from Stuttgart that were over looking at the house, looking for apartments rather than houses to buy, and Jonathan went to look at it and we said to him, “What do you think? We’re looking at four, four-fifty a month for this.” He told us that in Stuttgart you would be paying four thousand a month for it. So, in Oliva and the surrounding area is a very good value for money. The great thing about Oliva is literally, this house is three and a half kilometers from the sea and we have more than thirty kilometers of blue ribbon beach. So, it’s ideal.

Beth:  Lovely, so you’ve loads of… And how often do you have visitors? How often are there people staying in your house?

David:  You know, to come and actually stay with us, probably every couple of months. We’ve got some friends coming to stay for Easter. We had friends just leaving. In our rental houses, George and Carol are back, so they’re the short-term renters and tend to come back two and three times a year.

So yeah, we’re constantly getting visitors. We’re very lucky that our closest friends have a house just down the corner from us. They moved here from Essex as well. They have a bar, so we’re only five minutes away from Bar Amigos which is their bar and they’ve just been on TV bringing people to Oliva. They were part of A New Life in the Sun Show that just literally was on TV last week. So, most of our friends are sort of slowly moving here and having their own houses.

Beth:  Brilliant, you started the wave, you started the trend, that’s great. So, what would be your central advice to people thinking about doing what you did? I know it was in the eighties that you originally did this and times have changed a lot and the landscape has changed a lot, but what would your central piece of advice be?

David:  I think the main thing is to take your time and if you can possibly afford it, to rent for three or four months and know that this is the town, or the country that you want to be in because if you make that mistake you could possibly never recover from it. I tell all my friends rent for a little while and make sure.

When you’re renting and you’re wandering around you’re getting a feel, not just for the town but for parts of the town, for the areas that you like, for the areas you don’t like, the people you like, the facilities. It’s all about, and you hear it all the time, location, location, location. You hear it all the time, but it truly is.

Find the right location, get the right contacts. Again, I know I keep pushing Jane, but Jane is an amazing lady and she will hold your hand through everything even down to how you pay your taxes. Who your tax advisor should be, she’ll give you two or three choices, lawyers, get the right lawyer. Get one that you can trust and if possible, find somebody like me or another friend who can go into the house with you and share their experiences of how dirty it can be to renovate a house or how clean it can be depending on how you do it.

Beth:  Yeah, totally, well it sounds like you’re a wealth of advice. Speaking of that location, location, location, what is it that you love most about your new Spanish life as opposed to your old British life?

David;  I think the wonderful thing about Spain is that the sun shines more than three hundred days a year, which is amazing to wake up every morning and see the sunshine. Spanish people have this amazing habit of wanting to say hello to you even if you don’t know them.

Everybody says hello how are you, everybody is smiling all the time. So, I like that. I like to wake up in the morning and think it’s going to be an amazing day. Back in the UK, the last few years, I’ve felt that the weather wasn’t very nice. It’s always quite dark and gloomy and that reflects in the people too. The people have heads down and getting on with their lives and not particularly enjoying it where in Spain enjoying life comes first and making money comes second. There’s a big difference in the mental attitude.

Beth:  Yeah, well it sounds fantastic. You’ve got me convinced. Thank you so much for answering all of my questions. It was really, really helpful and you had some great advice.

David:  Well, if I can help anybody I will. That’s what it’s all about.

Beth:  Marvelous, cheers David, have a great day.

David:  Thank you.

Outtro

Thank you for listening and thanks to David for sharing his experiences along with Oliva Casas for their help to make this episode possible

I admire how David turned his early retirement into an exciting opportunity into property development and how close their new home is to their tenants

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And, whenever you’re ready, here are four ways we can help you:

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Next week I speak with Nikki, from Braintree, who purchased a house in Galera, Granada with her husband

Tune in to hear why Nikki described their purchase as the craziest thing that they’ve ever done and how their new life involves salsa three times a week

I’m Beth Davison and you’ve been listening to the Kyero.com Spanish property podcast. I’ll see you next week!

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