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Tenerife - anyone with good knowledge of Tenerife?

Discussion in 'Spanish property' started by John, Dec 28, 2008.

  1. John

    John New Member

    With so many cheap flights from Ireland and the excellent all year round climate, i'm thinking Tenerife is a good bet for marketing to the Irish market.

    Anyone here got any information on Tenerife they'd like to share?
     
  2. John

    John New Member

    Thanks cassiopeia, I will be in touch shortly.

    Suprising this post only got one response (and not one person PMing me!), where are all the Tenerife property people?!
     
  3. John

    John New Member

    bump for more Tenerife info...
     
  4. John

    John New Member

    Forgot about this thread, sorry! I'm still seeking Tenerife experts...

    Will be in touch with those have had responded over the weekend.. a delayed thanks to you all :)
     
  5. andyintheworld

    andyintheworld New Member

    I work with a good selection of estate agents in Tenerife but have stopped working with a lot more due to very very bad business practices which seem to be "the norm" so be careful if you are buying over there.

    It is a great place to live and there are some excellent properties with great weather all year round but I am absolutely fed up trying to do business with the estate agents there - bunch of lying vipers for the most part. It seems the bigger the agency the more crooked they are. Really puts me off the place given I work in the real estate sector and have to deal with them.
    I would say 1 in 10 is decent - the other 9 are complete con artists with no regard whatsoever for the client or their money - very annoying!
     
  6. Barry

    Barry New Member

    Totally agree with the above poster. My partner and I have holidayed in Tenerife many times. On the last couple of occasions, we decided to have a look at apartments for sale. Nothing too serious, it was a spur of the moment thing. We contacted a few agents and made appointments. Some of the apartments were lovely, but several of the agents (as the previous poster says) were (at best) ill-informed, crooked and completely untrustworthy. I love Tenerife but would definitely take my time in sourcing a good agent. Same could be said for any country, i guess.
     
  7. andyintheworld

    andyintheworld New Member

    I guess due diligence is key anywhere you buy but I really cant see how it can be effectively carried out on some agencies.
    They simply print lies - "members of XYZ organistion" "award winners 10 years running" "indemnity insurance..." blah blah blah.
    That plus pages of "testimonials" - all fantastic, no mediocre ones funnily enough.... I told people to ask about hem on forums but they then rally their staff to join and post how good they were with them during their make believe sale or they tell the site admin to delete any criticism because of libel.

    Very difficult indeed. Best thing to do is to know the process yourself and tell them how your purchase is going to go down and the T&C´s. not ideal though and unrealistic for Mr and Mrs Bloggs who don´t have any knowledge of Spanish or the purchase process, legalities in Spain.

    I set up a program through my Tenerife site where we control the sale (as the mortgage broker) and apply strict controls over what the agent can do: capped commission at 5%, mortgage and valuation clauses in the contracts, no contact details past so no endless "follow-up calls" independent lawyer, money only handed to lawyer etc etc...

    Have quite a few agents agreed and signed up, a couple of them are brilliant - no problems at all. But most of them still try and mess around once the client has made an offer and they can see a sale is realistic. They just aren´t happy with 5%, they want paid in cash, they want to write the purchase contract, they want to keep the deposit if client cant get a mortgage (them the agent, not the vendor!), they want to do the conveyance, they dont want a lawyer involved, they want black money....

    We are getting clients through but almost every sale is a battle with the agent who I am giving business to! - Exhausting....
    I think a lot of the problems relate to the fact that more than half of the estate agents in Tenerife are ex-Timeshare (ex-crooks) and these ways of working seem to be all they know.
    I work with some agents in Spain too and whilst there are con artists in Mainland Spain, overall it doesn't seem as bad as Tenerife.
     
  8. zazuip

    zazuip New Member

    Thanks for this honest appraisal

    I am looking to purchase a 2/3 bedroom apartment in Tenerife close to beach for rental income and persoanl use. Where in your opinion is likely to see the strongest rental yield over the next 5 years and why please
     
  9. andyintheworld

    andyintheworld New Member

    One of the problems here is all the newer complexes were built as residencial rather than touristic. There was a change in the law sometime in the nineties to protect the hotel industry from the competition of all the holiday apartment owners.

    Some of my favourite complexes are therefore residencial BUT everyone is doing the "families and friends" thing to get round it. I wouldn´t risk it personally as it just takes a bit of pressure from the community to kill your rentals altogether.

    So you are left with the older touristic complexes. Because rental can be so good on some of these prices don´t come tend to come down an awful lot - certainly nothing like what I have seen on the CDS.

    On rental yield I would think covering the mortgage payments (if you take one) community fees, linen, cleaning, depreciation and advertising in the first year then you´re doing well. if there is no mortgage then income can be up to (well... see example below)

    The most successful who put the hours in and get the advertising right are getting 40+ weeks per year but I wouldn´t believe anyone who told me that there is no work involved.
    You have to wait for someone wanting a quick sale as capital appreciation on exit is going to make up a huge part of any profit. Although your overall profit also depends on how much worth you place on the lifestyle aspect of owning a holiday apartment in Tenerife. Most are happy to cover all the costs with rental and use it themselves for 2 months a year.

    Las Americas and Los Cristianos are the only places to buy a renter. There is potential in the Golf del Sur are but nothing like LA and LC.

    We have a lot of repos in Spain from some of the banks we work with but looking at Tenerife there is nowhere near the same level and almost none in the tourist areas probably because the rent is always going to go along way towards covering the mortgage - kind of a shame (is it right to think that?) as plenty of people are waiting to snag a bargain.
    So, you´re left with the dreaded agents!!! Expect to pay 5% with a good agent and a lot more with a bad one.

    Mortgages if you want one are restricted to 70% of purchase price at 2.95% or 60% of purchase price at 2.35%.

    Thats about it really. Best way to judge real rental potential is to have a squint at holidaylettings and see which complexes are booked up a lot and what sort of prices to expect before you decide to buy.

    Best apartment I have seen recently is a 3 bed with very good rental:

    3 bed 2 bath in Los Cristianos 210,000€ reduced from 265k (may come down more)
    Good 3 beds on this complex get 40 weeks or more a year at an average rental price of £425
    So looking at around £17,000+ gross income pa (19,500€)

    There are a lot of "holiday" apartments here that will make you nothing though. You have to do a lot of your own checking esp on things like rental potential, state of the community, community rules etc.
    I spoke to someone early last year about this and she did a ton of research, viewed maybe 50 properties, checked this that and the other and then snagged a bargain in Torviscas Alto. Unfortunately the rental will be lousy but she was assured again and again it would be great. She has refurbed it and put a lot of work in but she´ll be lucky if she gets 15 weeks - its just not a good area for holiday lets .
     
    Last edited: Feb 26, 2010
  10. punitalemon

    punitalemon New Member

    Office Space Bristol

    Hi,
    Tenerife is very nice place. It is such a lovely island.
    There are many property for sale at good prices and location.
     
  11. wolfgangbrand

    wolfgangbrand New Member

    I dont know much about the Tenerife property market, but I do know the island as such very well. My wife is actually from there and we own a little canarian style house there. (You know the white square boxes in the little villages).

    So if you need tips for fun, whine and dine, just ask I know a couple of cool places. With regards to Property Experts: Google the name "Victor Sujanani" old friend of mine and lives since ages on tenerife (speaks English.)

    Regards

    Wolfgang Brand
     
  12. BULLS2008

    BULLS2008 New Member

    this was a really informative post. thanks!

     
  13. university

    university New Member

    I really don't know Andy. It cost me that amount in 2003 and I believe the prices are back to that level again now. There was a 3bed sold on our complex 2 months ago for €465,000. There was one purchased 4 years ago for €628,000. All our neighbours are so nice. We are never disturbed from our sleep at night as nobody makes noise. That is the problem with other areas around us, people are unable to sleep at night with parties and shouting etc. So to answer your question, it depends on what is involved in a sale. When I bought it was a simple transaction so if it was an Irish person, I would take much less as it would be much easier. When I purchased I thought I would grow old there but nobody can tell the future.
     
  14. university

    university New Member

    I much prefer Parque Tropical situation. You can't let weekly. It can be let long term. This makes it more valuable for the person who wants it for themselves. I never wanted to rent to somebody else. Parque Tropical is ideal for people who can afford to purchase and who wand to use it for themselves and friends and family. If somebody is looking to purchase a property in Tenerife to let on a week/fourthnight basis, forget it. It is not worth investing in a holiday home if you intend renting it out.
    The price for a detached house in parque Tropical 3 is €1,500,000. My friend bought one last year. He would never consider letting. I am sure you will agree that Parque Tropical is one of the best places to live in Tenerife, if not the best.
     
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