Could we make a living out of property development in Tenerife?

tammy · 4th June 2007, 22:09

hi can anyone tell me anything about property developing in tenerife my husband is a builder and works for himself with his dad we have just recently done up 2 houses here in england and made good profit and would like to do this in tenerife along with my husbands parants we have 2 small children and have been dreaming of moving to tenerife for 2 years could we make a living out of property developing in tenerife? thanks for any info on this

Mike in Chayofa · 4th June 2007, 23:57

Yes - you could. However .......

You need to be selective about the property that you chose.

A lot of estate agents/vendors will tell you that a property is an ideal opportinity for redvelopment. You need to bare in mind that a lot of prospective UK purchasers will have seen re-runs on Sky where you could biy a property for three shillings and six pence halfpenny ... do it up -... and sell it on for a fortune.

This is not the case, but by selecting the right property and reforming i in the right way .... there is still money to me made.

Janet · 5th June 2007, 01:20

Mike is right, but you will also need to be careful in choosing a property where the work to be done is defined, and definable, as "refurbishment" rather than "renovation". You will need licences to renovate some properties, whereas refurbishment is effectively just tarting up something that is slightly dilapidated. This, of course, can limit the amount of profit to be made.

Also be careful when looking at more rural or rustic properties. Some of these are protected, equivalent to listed buildings in the UK, and sometimes they have to be renovated to their original state (and if this means without windows, then so be it), and sometimes too they have to be renovated using "original materials" ... which may no longer be available. Some councils are more sensible than others in this latter regard.

old golfer · 5th June 2007, 10:21

Bargains here like in the UK are harder to find as nowadays everybody and their dog thinks they are property developers, due to watching too much TV where even idiots seem to make money.. no here as in the UK its getting tighter and any bargains to be found there is always some fool that will pay too much. I think you will turn higher profits in the UK if you get the right project at the right price and you have the location that will enable the properties to be sold quickly, and remember you know your home market much better......

doreen · 5th June 2007, 21:54

Another point you might not be aware of is just how long it takes to sell in the Tenerife market ... houses can be for sale for up to a year and you need to allow at least six months for apartments unless they are very keenly priced.

kathml · 5th June 2007, 23:46

I would say be very cautious unless you have very good knowledge of the langauge & the local building regulations

blackandwhite · 6th June 2007, 10:42

I know people who make good money buying off plan. seams less fuss, takes more time though. And you need to choose a good reputable company.

Janet · 6th June 2007, 16:30

But if buying to sell on before completion, there are few if any buyers at the moment ...

ainsie · 6th June 2007, 16:56

Heres a question for ya, and I know Mike wont answer this and maybe no one will but, how much under a price do you have to go with an offer before it become silly. What I mean is say a price is 200,000 and you look and say its a buyers market, its been on sale say 6 months, maybe I'll offer 170000. .
This is only a question and I dont have a property in mind but kinda wondered.

I know one agent a few years ago said , "you wont know until you ask".

Again I know theres probably no real answer to this as it depends on how desperate the seller is but I just want to know if there a line in the sand.Has anyone got away with a real bargain?

Janet · 6th June 2007, 17:28

Knew of a property once on the market (for 3 years) for 425,000. Sold for 175,000. Now THAT was a bargain.

OK, using rough figures. Let's say we have a property on the books at 200,000 with 5% commission to the agent ... the owner will be getting 190,000. If s/he's prepared to accept a 10% drop, which in the present market is not ridiculous, then s/he would be looking at getting 171,000. With 5% commission on top, that's 179,500. But it could be argued that with the vendor taking such a drop, then the agent should squeeze the commission too ... let's say to 3%. 171,000 plus 3% commission = 176,000.

Don't see why you shouldn't offer 170,000 at all. If nothing else, it's a starting point.