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Our Thinking and Research on Overseas Property Purchase

It was some 3-4 years ago having managed to pay off the mortgage on our family home that my wife and I contemplated buying a second property, primarily as an investment property. We first considered purchasing an apartment in Belfast but had some concerns as to:

  • the number of apartments being built around the Greater Belfast area
  • the price of these properties (at that stage over £100,000) for 2 bedroomed apartments, reflecting increased interest from property speculators and hence the sustainability of such prices
  • the significant increase of `investment' properties chasing what did not appear to be an equally increasing number of potential renters
  • ongoing political uncertainty and the potential impact on property prices if political developments failed
  • the ongoing decrease in mortgage costs with lower interest rates and more competitive mortgage deals, making properties in general more accessible and affordable than had been the case previously and hence reducing the number of potential renters: and finally,
  • little family interest in needing or using such an apartment, if it was vacant.

Whilst our youngest son was away at University and there was the potential to look at purchasing property for rental to his fellow students, we were not convinced that Dundee would prove to be an attractive market for investment purposes, in that the resale market appeared somewhat flat and the universities were building/refurbishing more of their own properties for their student accommodation.

As a result of our deliberations we then focussed more on a number of holiday destinations with a view to an off-season holiday home with good potential rental income during the peak holiday season. At the outset, our criteria for an investment/holiday property included:

  • the location should be attractive to us for both holidays and as a genuine `second home' where we might live for some months (for us this meant that the immediate area should be ideally `tourist free' but with easy access to good tourist facilities eg beaches, entertainment facilities, golf, watersports etc)
  • property costs should be reasonable (circa £100k), relative to the Belfast/N Ireland market
  • easily accessible, either by direct flights from Belfast and/or Dublin
  • long rental season (6 months), whilst also enabling our family to enjoy the property off season with good weather prospects
  • good prospects for reasonable capital growth (5% +) and healthy resale market (just in case our circumstances changed!)

This initial criteria started influencing the various areas we could contemplate in that long rental season, together with the desire for family use off season, meant locations where the weather was good to excellent most of the year. Locations that sprung to mind were therefore Florida, Canary Islands, Balearic Islands and Spain. Whilst we had enjoyed many excellent holidays in various parts of France and Italy, the rental season was short, weather more unsettled and accessibility off season more expensive and difficult.

We started looking seriously when we holidayed in Florida during 1998. Staying initially on the Atlantic Coast (Cocoa Beach), we then worked our way across to the Gulf Coast, towards Fort Myers/Sanibel Island, before finishing close to Orlando. Whilst Florida had much to offer us by way of attractive homes in good settings, close to many beaches, golf courses and marinas etc, the overall landscape was very flat and, in our personal opinion, somewhat uninteresting. Obviously whilst there are tremendous family entertainment facilities in general, and around the Orlando area in particular, we did not envisage wanting such facilities regularly, particularly if we were living there as a second home for some weeks/months.

Another important factor that gave us some concern was the significant land being developed and still available for property development. The scale of this land resource helped to keep house price inflation to circa 2%pa and whilst good properties were available within our target price range (100k), the land availability for ongoing development appeared to limit the opportunities for capital appreciation.

Consequently, whilst Florida had many pluses, from our perspective and criteria at the time, we were keen on finding somehwere closer to the UK.

Our next investment/holiday property research took us to Majorca and whilst we found the island very attractive, in the areas of interest to us, the property prices were high. In addition, being an island we wondered if it be too small should we be living there for any length of time. This had been the main downside of the Canary Islands, where in previous years we had enjoyed many one week autumn breaks with good weather but found the islands just too small for living there any longer than the odd week's holiday.

We therefore started to look more at mainland Spain, and in particular the Costa Blanca, which offered a good range of property options and being one of the larger Costas, it had well developed infrastructure (restaurants, leisure facilities. entertainment etc). Geographically the Costa Blanca is eastof the Costa del Sol and south of the Costa Brava. Our initial research sugg that this area appeared to offer:

  • generally good weather all year round, with seasonal variations
  • strong cultural identity, family traditions
  • wide choice of locations
  • relatively easy access

We were more interested in the Marina Alta region of the Northern Costa Blanca, south of Valencia and north of Alicante, in that it offered us a number of our key requirements:

  • area of renowned scenic beauty, both on the coastline and inland
  • better year round weather with more sun and less rain than the other Costas
  • sensitively controlled developments and less intensive than other parts of the Costa Blanca, Costa del Sol
  • good long term capital appreciation on property
  • excellent renatl potential
  • low cost of living but with good communications infrastructure

In the early part of 1999, we visited Costa Blanca, Spain and looked at various properties/locations from the relatively undeveloped Costa Calida (Mazarron - Cartagena), to the extensively built up Southern Costa Blanca area around Torrevieja, before moving north of Alicante to the area around Moraira/Javea and Denia.

We found that the landscape around the Costa Blanca changed dramatically as we moved from the Costa Calida (Mazzaron),southern Costa Blanca (Torrevieja) where the landscape was generally very flat with the odd hill/rock outcrop, as compared to the Northern Costa Blanca area where the landscape was more mountainous and undulating and much greener, and to us therefore more scenic and interesting. Further exploration of the other Costas further south (ie Costa del Sol and Costa de Almeria), also confirmed that if we were seeking an attractive landscape with green vegetation throughout the year, excellent weather and not overly commercialised or spolit by extensive tourist developments than the Northern Costa Blanca (Marina Alta region was the best location.

We were therefore immediately attracted to the marina Alta region of the Northern Costa Blanca area (Moraira, Javea, Denia, Jalon Valley) and whilst the property prices were higher than the areas south of Alicante, they still represented excellent value, with 3 bedroomed villas available in our target price range (circa 100k).

We also found that whilst the area around Moraira had been developed over the past number of years with a good road/tourist infrastructure, there was still a significant proportion of the land remaining zoned for agricultural use and which for us had a number of important benefits:

  • urbanisations (property developments) were separated by agricultural land (vineyards, olive groves, citrus orchards), making the landscape more scenically attractive than the much more intensive developments at Torrevieja, and potentially Mazzaron
  • ongoing development restrictions, predominantly villa urbanisations and low rise apartments
  • steady capital appreciation (circa 10-15% over the pprevious 2 years) and strong resale market with good resale properties appearing to sell relatively quickly
  • good rental market with long season of circa 6 -9 months, and potentially year round
  • good weather conditions all year round, enabling good use off season

Other important factors we took into consideration were:

  • 2- 3hour flight time, so long weekends were feasible with the increasing number of direct flights from Belfast or Dublin to Alicante
  • good access to the family entertainment facilities (Terra Mitica theme park, Aqualandia/Mungoland etc), some 30 minutes away by car
  • great range of restaurants with excellent menus at incredible value
  • close to unspoilt areas eg Jalon Valley,
  • number of golf courses, beaches and marinas within a few minutes drive

So having considered a number of areas over the previous 2 years, we took the plunge in March 1999 and bought a site for a 3 bedroomed villa near the very Spanish village of Benitachell, some 10kms from Moraira and Javea. Our developer promised completion of our villa by October 1999 and true to his word, our villa was completed on time to a high spec and we took possession in early November 1999, with very few `snags'. Over the next few months we finished off the site with boundary walls/fencing and gates together with an attractive pool with terracing and gardens (low maintenance).

Such has been our satisfaction with the whole process that we have done it again, this time purchasing a new build 2 bedroomed apartment in the La Sella Golf development near Denia, with the intention of renting this property all year round. However apartment rental has proved more difficult with no specific media focussed on apartment advertising as for villas and perhaps these properties more geared towards the wholesale market. Consequently we sold our apartment and have purchased another villa, but this time in Florida USA and aimed at the rental market for those staying in Kissimmee.

With regard to our Property Agents, whilst we had not experienced any particular difficulties with them, they were GB based/owned and once we had signed the purchase contract we had the clear impression that they felt their work was largely done, whereas for us it was just beginning and more accessible support would have been useful.

It is as a consequence of our own experience that we have now decided to set up a local property agency (Cielo Villas), working with the developers/constructors that we have had direct experience of dealing with and who can offer a wide range of properties in various locations within the Marina Alta region, (Northern Costa Blanca).

Rather than our involvement as Property Agents ending with the signing of the purchase contract, we will be intending to support our clients right through until their property is completely finished (ie furnished, pool, gardens etc). This level of support can be very useful, particularly if the purchasers are buying property overseas for the first time, or have limited time to progress matters and finishing off the site (pool/gardens etc).

Should you be interested in acquiring your 'heavenly home' please contact Anthea Campbell at 028 9145 5178 for further information - other than the cost of a phone call it costs nothing to enquire!

Cielo Villas - 12 Coniston Road - Bangor - Northern Ireland - BT20 4QQ

Tel: 028 91 455178 Fax: 028 91 455178 Mobile: 07802 928661

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