Rental Occupancy in Oasis Beach?

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Mowgli

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I've finally homed in on this project and am now seriously looking to buy an apartment here. Can anyone confirm the rental occupancy I can expect in the peak and off peak seasons? Thanks
 
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imported_simonw

Guest
Hello Chaitime,

Unlike many emerging property markets where an investor would make his investment as early as possible then sit back and wait for a period of time for the area to attract tenants and start to generate rental yields, Morocco seems to already have a solid tourism base and according to local agents, boast 85% rental occupancy in most cases over the high season.

When I spoke to my agent re: Oasis Beach, he confirmed that it is highly likely that one can entirely cover mortgage payments and bills for the year through rental gains achieved in the high season (June - September). And actually, have some extra income during the low season if you manage to find a tenant - although he did say that your property may remain empty during this time.

For a €100,000 2 bed apartment I was quoted a monthly rental income of around €2,000 for the 4 high season months and around €1,000 for the lower season. However, this does seem to be a little high. Comments anyone?
 
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imported_traceyw8727

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Im not sure you would be able to secure a 2 bedroomed apartment on the Oasis site for 100, 000 Euros, Pounds maybe( unless you bought very early on?)

I do not consider 500 euros (approx £350) to be unrealistic in the high season given the nature of the resort ie 5 star with great facilities, not when you compare what you would pay for quite a basic apartment in Spain, Turkey etc. I also believe there will be potential to rent in the low season as the weather is still reasonable and there will be other activities available. Also long week ends would be a possibility.

Whether all mortgage payments will be covered is not so clear as there will be maintenance charges and income tax payable (UK income tax)! Much will depend on how the resort takes off and as the whole site will not be finished until 2010 I think you have to accept that for the first few years at least you may have to contribute personally towards the mortgage.

My main concern is whether there will be enough airlines flying into the area to meet the no. of beds which will be available!
 
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Lee Filkins

Administrator
Staff member
Premium Member
For all of you who is looking to rent your properties or taking out mortgage please be aware of the understated and bring into your calcultions.

1) While Moroccan Govt is claiming that there is no tax on income. This is not strictly correct. You pay VAT of around 20% on your rents that you collect and than what ever service you provide e.g linen etc as this will also attract VAT.

2) If you are taking out a mortgage or intend to take out a mortgage your interest rates will attracts 10% VAT, Yes you read it correct. So if the intrest rate is say 5% you add 10% VAT and thus the interest rates payable are 5.50%. Only, country in the world where this happens and this distorts the financial market.

3) You will be asked by the lender that the mortgage ( the monthly instalment ) has to be paid in foreign currency. Even though the mortgage is Moroccan Dirhams. This means

a) If you have collected rent in Dirhams you cant credit your mortgage account by it.

b) Sending foreign exchange to clear your mortgage means exposure to currency fluctations.

c) The bank will charge you for this transaction
 
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moroccomania

New Member
Camel,

I've been looking at morocco for quite some time now, but i must admit that i never knew about the VAT issue! That is definitely an eye opener for me, and frankly, very surprising. Surprising because it has never been brought up before by agents, or developers (we all know why!),but even otherwise, no one else has ever mentioned it either!!

I have spoken to a number of developers and agents, and not one single person has mentioned the added charges/costs that you have mentioned. :confused: If that is the case, it does distort figures quite a bit, especially when you consider the rental guarantee options and finance that these developers offer.

Before I really put my foot into it, are you absolutely sure that is the case!? I mean, is it applicable to foreign buyers and not just locals?

As you can see, I am in a state of shock! :eek:
 
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moroccoproperty

Guest
Hey camel,

Thanks for all the input you have provided so far, and welcome to the moroccan forum.

You obviously seem to have a lot of inside knowledge into the facts and figures of buying, renting and selling property in morocco. It would be great if we could have a post on all the costs associated with buying, renting and selling a property in morocco. This would certainly be of help to a lot of our members and will give an excellent snapshot view of what it actually costs to invest in morocco.

Would you like to do the honours? If there's anything left out, others can add to that post, and we can make that a sticky! It would be best to put it in the General Property Market Talk section.

Thanks.
 
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Lee Filkins

Administrator
Staff member
Premium Member
If some one wishes to start a thread on it, I am happy to post and share my experience/knowledge.

The developers and agents will not tell you all and why should they. This is for obvious reasons but to be fair to them most of them will not know it. My experince in most part of the world is that the staff that you deal with and in their relevent professional capacity do not know further than their job spec.

The old "buyer be aware" applies. Further why should the developer tell you that there is VAT on rental or VAT on interest rates !!!!!!!

In so far as guanteed rental is concerned. I am not a fan of it. The so called guaranteed rent is front loaded and you are only getting your own money back over a period of the agreed time frame. In return you pay direct or indirect tax on it and if you are UK resident for tax purposes you have to declare in your UK Tax return.
 
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Lee Filkins

Administrator
Staff member
Premium Member
Morocco mania said

"Before I really put my foot into it, are you absolutely sure that is the case!? I mean, is it applicable to foreign buyers and not just locals?"

I will put my house along with the mortgage on it. The only thing I am not sure is wether the VAT on the rental is 10% or 20%.

I would also sugguest you dont read too much into locals or foreignors. The locals are given a lot of considersations and I dont have a problem with it. After all this is being done to uplift their standard of living and dare I say that the West is hoping that once their of standard improve they will abstain from destructive activities/thoughts against them.

Sorry I digressed a bit, but it is relevent in the bigger picture of things.
 
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