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1 year of owning property in Egypt

Discussion in 'Egypt property' started by crombiestone, Dec 8, 2007.

  1. crombiestone

    crombiestone New Member

    It has been really interesting to read the posts in this forum . I thought people may like to hear about my owning and renting experiences .

    I had visited various areas of Egypt over the years and holidayed in El Gouna in 2004 . I was aware of the real estate in the resort before going and was curious if a little wary so thought I would wait until checking out the resort before committing .

    I basically fell for El Gouna immediately . At the time I paid £22000 for a 1 bed apartment . Prices in Hurghada were about half of that but I just didnt like it there and thought that the premium for El Gouna was worth it . We signed contracts and waited for the development to be built . It was a long wait but the apartment was handed over ,on time, in December 2006.

    All in all after some alterations and buying of furniture I paid around £30,000 total original investment . I was very pleased with the whole process and because we had no loans on the property I was initially not too bothered about renting it out and even considered ditching the rat race and living there full time.

    In about March 2007 we placed an ad on villa-vacation

    In 9 Months we have had 5 rentals over a total of 9 weeks and have 2 bookings in the coming months (one a repeat visit) totalling around £1600 gross which is around 6% of original investment . This may not seem a lot but I have really not made much of an effort to Market the property and I am very happy with this return .It covers maintenance charges and gets me a couple of free holidays.Of course prices have now risen so if I had paid current prices for the apartment this return would be more like a 3% return. I had an enquiry about long term rental but rejected it as I didnt want too much wear & tear on the property .

    I have previously posted on another forum asking holidaymakers whether they would consider a self catering holiday in Egypt . The responses were mixed but most cited that it would have to be cheaper than a hotel deal ,they didnt want to cook & clean and that Egypt was an unknown quantity for safety as to reasons why they wouldn't.

    My counter argument was that I prefer the extra space and privacy of an apartment .I hate being woken by the cleaners every morning . I hate having to get up at 5 am to get a sunbed round the pool .I hate loud "entertainment" around the pool I hate to be tagged and have to eat the same bland food and drink cheap spirits that comes with an AI holiday and that you ultimately get what you pay for .I love however having my own living and separte bedroom ,my own sunbeds to put round a usually deserted pool or on the lagoon beach,sitting on the terrace looking out over a beautiful lagoon and eating where and when I like .

    I did manage to persuade a couple who had stayed in a hotel in El Gouna to try self catering and they are now firm converts and are telling all of their friends.There is a market for both but I think that it is a more discerning and savvy client that will choose the self catering option and high standards will be expected.I think this will be an Easier task in El Gouna or Sahl than it would be in downtown Hurghada . Over pricing of property ,over supply of beds and limited flights are concerns for future years .

    To summarise I would say that Egypt is a fantastic place to have a property and a great lifestyle purchase . If rental returns are important to you to cover loans I think that its a more risky investment.

    This post got a bit long !! Hope its of some interest ?
     
    Last edited: Dec 8, 2007
  2. awahee123

    awahee123 Banned

    Hi,
    Looks like you made the right choice as El Gouna is no doubtedly beautiful.
    Regarding self cateringI think we will all find that in time All the Redsea area will become very popular for self catering rentals,it's just a case of waiting,Egypt is truly a special place and will always be just that.
     
  3. Peter Mitry

    Peter Mitry <B>Egypt Forum Founder Member</B>

    Welcome to the forum and thank you for sharing your experiences with us. You are right; many people prefer the informality of staying in an apartment and particularly when you find somewhere that you particularly like.
    I agree with all of your observations on the all inclusive hotels; we just need more and cheaper flights. I have heard this week that Easy Jet will begin flights to Hurghada in April 2008.This is still unconfirmed but it will be a definate step in the right direction if true.
     
  4. propertastic

    propertastic New Member

    Thanks for the information - that made for some very useful and interesting information.

    I too much prefer apartments. I must say that I loathe the expression 'self catering' though as it just says 'domestic drudgery' to me. I don't do any 'self catering' when I'm at home, so I certainly wouldn't be doing any on holiday! Certainly not when eating out in Egypt is cheaper than eating in in the UK. Unfortunately, the AI deals usually work out as being a lot cheaper when part of a package than putting the elements together seperately.

    Peter - I would imagine that the EasyJet rumour has something to do with their takeover of GB Airways at the end of October. I imagine that they are just going to be continuing GB Airways' routes rather than adding more, although we can all live in hope.

    BTW - all Brits should be jealous of the Germans when it comes to getting to Egypt. Condor fly from just about every major German airport to Hurghada with prices a lot cheaper than the UK. Lucky b-----s!

    Someone really needs to set up a decent rental agency in Hurghada.

    Come on, RedSeaFurniture - I nominate you and your wife for the job. I reckon that you'd make a great success of it and it would also be a very profitable venture for you. And it would stop you getting too bored as well!
     
  5. awahee123

    awahee123 Banned

    Hello Crombiestone,

    Is you property registered and how long did registration take??
     
  6. Mark .Y.

    Mark .Y. New Member

    I have been trying to find if there are any resale properties in El Gouna (just to look at the prices being charged) but can't find any. I did email Orascom twice but got nothing back.
    Does anybody a website where resale El Gouna properties are sold ?

    Mark .Y.
     
  7. crombiestone

    crombiestone New Member

    Resales in El Gouna

    Hi Mark .Y

    I have sent you a PM as I cant post URL's on the forum yet.
     
  8. distant dreamer

    distant dreamer New Member

    El Gouna Rental and resale site

    Hi Mark

    I'm unable to post a link to an agency in El Gouna that deals with rentals and re-sales. So I'll pm you.
     
  9. Len Deeley

    Len Deeley New Member

    My growing concern with owning a property in Sahl Hasheesh is that the managing agent is charging 7% increase in maintenance per annum. The contract allowed upto 7% but it is simply being increased to the full. They refuse to provide accounts. We own the properties and they provide the service yet there is no accountability to ensure that they are serving the owners the way we want it.

    I would like to know if anyone is aware of the correct authorities in Egypt to go to to complain about this as it is going to have a negative impact on Sahl Hasheesh if it becomes widespread knowledge. I have tried to have dialogue but just get completely stonewalled. Any good company would provide accounts as a matter of course so this is extremely worrying as the cost of maintenance is high anyway (£1300 last year) and 7% increases compounded each years is going to make this highly unattractive. We need to know how to bring this to the knowledge of the appropriate tourism authorities in Egypt

    Rgds
    Len
     
  10. Peter Mitry

    Peter Mitry <B>Egypt Forum Founder Member</B>

    Len where is it that you own? In the past many Developers have used management fees as an ongoing income stream and have built in these large increases to your contract. You have a legal right now as owners to challenge these increases and should consider forming an owners committee and getting legal representation. For anyone considering purchasing in Egypt it is important to check the section in your contract which deals with management fees and ask your lawyer to challenge anything which seems unfair.
     
  11. NeilHollingsworth

    NeilHollingsworth New Member

    Len, visit the ERC office on site in Sahl Hasheesh and speak to a Mohamed El Hakeem he is really helpful.
     
  12. simonee

    simonee New Member

    How long did the registration take?
     
  13. Len Deeley

    Len Deeley New Member

    Thanks for responses. I have been in touch with ERC for some time and they do make the right noises but nothing happens. They sympathise but do not seem to be able to do anything. We had a meeting in London some time ago with them and they were then talking about open book accounting etc etc but nothing came of it. They seem powerless to control the company providing the maintenance and site management services.

    Like many owners I did not appreciate at the time that we would have needed to get in the contract the need for open book accounting. I know people who are now aware asking for it and it being refused. I fear the worst because of the attitude and we need to elevate this to Egypt Tourist Board of whoever.

    We were told it is illegal to set up an owners committee but that also may be deception. Any guidance on who to go to to elevate this would be helpful.

    We need to fight it ::fight:
     
  14. Alan Cockayne

    Alan Cockayne Banned

    Home Owners Associations are legal. They have to be set up like a company with accounts and articles, with a committee running them. Len, you are correct. This clause must be in each sale contract, but the Egyptian lawyers hands are always tied.

    The excuses made are deliberate.
    Lies to create smokescreens and to avoid being accountible and transparant.
    One of the very reasons the revolution took place.

    Alan.
     
  15. Len Deeley

    Len Deeley New Member

    Thank you for the information. It is most valuable. Could you give guidance on the best way to go to set up an association. What would be the correct procedure in Egypt?
    Rgds
    Len
     
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