All Forum Posts by: David Hays

 Our market is Andalucia, and we're looking to buy in Malaga along the Costa del Sol. The market has seen record growth for the last two years running (and already has a very established tourism industry, with around 70 million visitors last year). Tons of diversity in the market, multiple theme parks, zoos, water activities, golf, and casinos + 320 days of sunshine on average makes for the kind of market that we like.

We don't presently manage hotels (have in the past), but we reopened our property management division this year - we sold it in 2015 and went to California, but came back to Spain in 2016 and found that the buyer had gone under 6 months later- and now manage a collection of vacation rental properties in Andalucia. Feel free to write me directly for any specific questions you might have.

Though I'm not doing great at participating in BP much lately, hotels and the lodging industry is our full-time business. We offer management consultation, among other things, and are looking for our own hotel property at the moment. Not based in the US, though - our market is Spain.

Tatsiana,

You have to take the news on "getting harder" with short-term rentals with a large dash of salt - the Spanish have a very established history of operating in "grey" areas (or black, for that matter -  official estimates peg roughly 30% of GDP to be in "black" money right now), and especially when it comes to vacation rentals, so any governmental moves towards regulating these would be seen as an imposition. Regulations vary from region to region, and it's true that in markets like Barcelona they've clamped down hard - Madrid has pushed back against Barcelona, though, and recently vetoed a significant fine that Barcelona tried to issue against Airbnb (corporate).  In Andalucia, however, the regulations are established only since last year, and all in all, they're fairly easy to work with; there's hoops to jump through and rules to follow, of course, but all in all we don't see it as anything unreasonable.

As far as being a good market for investing in vacation rentals, it can be a fantastic one! The country has experienced record levels of tourism the past two years running, with annual visitors exceeding 76 million people (the population of Spain is around 40 million). Property prices are still depressed from the market crash that saw up to 40% decreases in value, but have been on a very slow, but steady, uptick for the past two years as well. In other words, it's a great time to buy in Spain right now if one wants to get into vacation rentals, as two months of peak pricing can pay for the whole year of PITI (especially with mortgage rates under 3%). Like @David Fernandez said, though, purchase costs are significantly higher than US real estate, so your CoC returns might be shy, but your overall ROI can be substantial. I'd say to shoot for coastal areas - these are recovering value the fastest (besides Barcelona and Madrid metro areas).

We're investing in the Malaga area, and here you've every kind of option by choosing different towns - Torremolinos, Benalmadena, Fuengirola, Mijas / Calahonda, and Marbella tend to be the popular spots, but there's myriad other smaller towns around that have their own draws. Our picks tend to be in the Torremolinos, Benalmadena, and Fuengirola areas though, as these are connected by easy train to the Malaga airport (and Malaga city center). Overall we've been happy with business here; it has its challenges, without a doubt, but the quality of life we can have while we build our business (instead of when we've made it, so to speak), is something we value highly.

Great conversation in this group, and good input from @David Fernandez - I can second his thoughts shared on just about everything, but particularly on how cautious one must be when working with "real estate agents". As he mentioned, literally anybody can call themselves an agent - there's no license for this - so in hot areas it becomes madness. For example, I moved down to the Malaga/Costa del Sol area last August, and I'll tell you, I honestly have not met a single person that won't tell you they're involved in selling/renting real estate somehow. We're very involved in tourism and travel here, though (and are on the lookout for our own hotel property), so feel free to get in touch if you want to chat a bit more.

@Sergey Tkachev Yep, we left last July after finishing the hotel flip we were working on about 7 months ahead of schedule. We tried it out, but Sacramento just wasn't the right place for us (hard to beat waking up to view of the Mediterranean and having breakfast today on the beach in 72 degrees and sunny).

@J. Martin You should come visit then! Though it looks like you're having fun in Taiwan - we spent a few months in between Korea and SE Asia in 2014, but didn't make it to either China or Japan. Saving those for independent trips a bit later on. And anyway, YOU still keep your main residence in the Bay Area, if I'm not mistaken? It'd be a long trip for us, especially with a 4-month old baby ;-).

Caroline,
What makes you think that that is so complicated? It just comes down to proper organization and automation. Though it sounds like a stereotype, I have literally managed my vacation rental properties from a beach in Thailand, and I have absolutely no problem managing other properties remotely.

Christopher, 

Well you certainly have HOAs here in Spain (at least they're totally de rigeuer in any building or complex I've seen here), and if anything the communities are more nosy into your personal affairs, but they don't seem to pull anywhere near the same legal nonsense that is so common in the States. As for laws, well those vary just about everywhere you go, though at least Madrid is working on cohesive federal regulation for short-term rentals (whereas that will never happen in the States), but I completely agree with your point on the good deals in high-crime ghettos angle - the concept of "ghetto" as it is in the States just does NOT exist in Spain, and personally I find that a much easier thing to work with in terms of identifying path-of-progress opportunities.

Our company offers a few different things, but right now we're working on rebuilding our property management division on the Costa del Sol, targeting purely vacation and short-term rentals (we sold this division last year when we got a tempting offer and knew that pending regulation was going to greatly shift the marketplace). Our primary investment focus right now is a hotel or hostal located on the coast, so it's a slow process ;-). Connection sent.

Christopher,

If you have not previously done deals in the US, don't necessarily let yourself get caught up in reading about it and think that the grass is greener. Spain, on the whole, is by far a much greater opportunistic market right now than just about anywhere in the States. After working in Sevilla for 4 years and keeping an eye on the US market, my wife (Spanish) and I (American) made a big move to the States to explore some opportunities there - though we had success in the consulting side of our business, our on-the-ground experience with investment opportunities turned out to be significantly different than what we were looking at online. Your experiences may vary, of course, but 9 months later we decided to bring our business and our investments back to Spain.

Hi Oriol,

Not to sound like a downer, but you are far from having discovered an unknown idea. Are you not familiar with inmobiliarias in Barcelona? I can´t say that I´m very familiar with the North - as my experience has all been in Andalucía - but inmobiliarias are the typical middle-man when it comes to real estate transactions here. I mention that because they almost never have any sort of legal rights to represent the property, and so are effectively just representing buyers and bringing them to the sellers. When doing so, the inmobiliaria agent asks the buyer to sign a contract agreeing to a commission in the event of a sale - something that varies greatly from operations in the US, where it is the seller that pays the agent commission. Also, you might find that British buyers have historically preferred to buy along the coasts (moreso in the south than in the north) and that in your market you'd probably see more Germans and Eastern Europeans. With that said, you could organize yourself as an inmobiliaria and setup a website with some choice properties you've picked out, and start organizing appointments... but you will be facing significant entrenched competition in this regard. Best of luck.