The Greens

[tima]

Originally Posted by marsdei

At the initial purchasing stage there were alot of us about, this was before your time on here! Most of them I think reside at the saidia forum website.

I am aware of a number of people buying on my block, am at 0602! Where are you?

I find a lot of investors only tend to view the forums when they need advice. But then some of use are saddiest enough to subscribe to new thread alerts!

0511D booking in..

[mrssmash]

Regarding rental companies if anyone is interested I have had this reply from one called Blue Sky Rental who will be/are based at Saidia (who feature on saidiavacations) giving a rough idea of what they charge to manage your apartment.

"To answer your questions, if you were to hand all arrangements over to us we would aim to keep your costs as low as possible. Our basic fees are a one off administration charge of 1500 euros, which covers the cost of getting you set up, the key handover and initial advertising of your property. After that we ask for 20% commission per rental and our cleaning and maintenance services are charged by the hour. We have found that one of our most effective points of advertisment is the company's strong links within the golfing fraternity. Our properties are available worldwide for rental. At this early stage, we are unable to offer a rental guarantee, however we aim to have these in place as the resort grows. Regarding your utility costs, our office will forward all bills to a preferred UK address, but we are unable to accept responsibilty for the payment of said costs. If you are looking to make use of the property yourself, simply advise our office 2 months prior to the date you require the property to be vacant and this will be arranged for you".

Ive seen a basic outline of the guaranteed rental option that Azur are offering - i.e. guaranteed 5% per year for 2 years payable quarterly at 1.25%, and they pay ALL costs involved (e.g. service charge/utilities) and as owners we get 4 weeks a year for personal use (just have to pay utility costs for those weeks).

What are other owners thinking of doing? Going with Azur or giving it a go themselves or signing over to an independant rental company? At this stage we are leaning towards signing up for 2 years with Azur. One reason is that these are due to be completed in Jan 2009 and its going to be a good while longer before this site is totally finished and really takes off - so I think it could be hard work generating a good rental income for the first year or two if we try and market it ourselves. So for anyone on a tight budget who needs to minimise expenditure for the next 2 years (like us) maybe the Azur deal is best..?

[tima]

I havent really thought about this at this point and most of your comments are news to me. 5% doesnt seem very much but i suppose will cover the mortgage... i guess they are talking about 5% of the value of the property or is it 5% of the purchase price because if its purchase price then some lucky ones who got in early will be onto a smaller income - anyone know which it is.. doesnt seem fair that 5% means different amounts for different people when they are the same 2 bed apartments. Does anyone have any idea of how much per week the rental could/would/should be ??

[howellmr]

These management fees seem severe. I did a quick calculation at with a 6% interest rate, 20 year mortgage for 70% of the purchase price, I would need to recover 9% (of purchase price) in rental income just to breakeven on mortgage and rental fees. I factored 3% of rental income to cover cleaning and maintenance, i.e. 23% total rental management fees. This is almost 1/4 of rental income. How can they justify such a high percentage?
I DID NOT include utilities.
These estimates are significantly higher than were communicated to me earlier on in the project.

[Mr Ri]

A couple of points on this subject:

The article I've attached earlier in this thread (How to maximise yield) provides some thinking material on this subject.

With the guaranteed rental scheme the returns may not be greatest, but you don't have to put any work in yourselves. The downsides are that you often don't get a free hand as to when you (and your friends and family) can use the property, and there are rarely any guarantees on the condition of the property at the end of the two years.

With many rental management companies, you are taking the risk on their performance. This often means you'll make some money if the resort and your property is popular.

If you do it yourself, then it can be hard work, especially in the first months. There are local companies who will provide key holding, cleaning services, etc. Again you are taking the risk, but you get the rewards that go with this. Working together with some other owners, can help with choice of service providers easier, and support group bookings.

Regards David

[mrssmash]

hello

its definately 5% of the NET purchase price (i.e before tax) so yes everyone will be getting different amounts depending on what you paid

Originally Posted by tima

I havent really thought about this at this point and most of your comments are news to me. 5% doesnt seem very much but i suppose will cover the mortgage... i guess they are talking about 5% of the value of the property or is it 5% of the purchase price because if its purchase price then some lucky ones who got in early will be onto a smaller income - anyone know which it is.. doesnt seem fair that 5% means different amounts for different people when they are the same 2 bed apartments. Does anyone have any idea of how much per week the rental could/would/should be ??

[mrssmash]

That 'How to maximise yield' doc was really helpful I thought. It certainly made me realise there is quite a lot to think about when renting your property out yourselves.

And on the other hand it can be a big gamble when handing over to a management company in terms of a decent service and whether they market your property to its full potential etc. And as you point out - I would be more than a little concerned about what the state of the apartment would be after 2 years.

Some big decisions to make come the end of the year!

Originally Posted by Mr Ri

A couple of points on this subject:

The article I've attached earlier in this thread (How to maximise yield) provides some thinking material on this subject.

With the guaranteed rental scheme the returns may not be greatest, but you don't have to put any work in yourselves. The downsides are that you often don't get a free hand as to when you (and your friends and family) can use the property, and there are rarely any guarantees on the condition of the property at the end of the two years.

With many rental management companies, you are taking the risk on their performance. This often means you'll make some money if the resort and your property is popular.

If you do it yourself, then it can be hard work, especially in the first months. There are local companies who will provide key holding, cleaning services, etc. Again you are taking the risk, but you get the rewards that go with this. Working together with some other owners, can help with choice of service providers easier, and support group bookings.

Regards David

[mrssmash]

I thought 20% commission was steep too. And 1500 euros for "setting up etc". Thats too vague for my liking. I would definately be pushing for exact marketing details nearer the time too. Unfortunately with it being a whole new resort and therefore a new service it will be harder to gather opinions on their service before signing up with them I would imagine.

Originally Posted by howellmr

These management fees seem severe. I did a quick calculation at with a 6% interest rate, 20 year mortgage for 70% of the purchase price, I would need to recover 9% (of purchase price) in rental income just to breakeven on mortgage and rental fees. I factored 3% of rental income to cover cleaning and maintenance, i.e. 23% total rental management fees. This is almost 1/4 of rental income. How can they justify such a high percentage?
I DID NOT include utilities.
These estimates are significantly higher than were communicated to me earlier on in the project.

[tima]

Originally Posted by mrssmash

hello

its definately 5% of the NET purchase price (i.e before tax) so yes everyone will be getting different amounts depending on what you paid

Hi, thanks for the info.. and all your comments which are very helpful... no doubt time will tell whats the best thing to do but i am edging towards your thoughts with regard to handing it over at 5% (i cant afford to just let it sit and not make at least enough to nearly cover the mortage) and waiting till the site starts to seriously get up and running which i feel sure will take till at least 2011... by which time.. i hope.. it'll be worth a fair bit more than i paid..

[Mr Ri]

Greens owners may be interested in a response from AZD to the Martinsa Fadesa administration news. Follow the link below:

AZD response