Friday, June 12, 2009

You have got to be kidding me

Spanish banks don't like property that is in any sort of rental program

Because they think they will have trouble repossessing it if there is a 12-month contract for rentals etc

Even though the repossession process in Spain is glacier like in speed terms

So we have a client that has a €220k property that will go into a 20 year 5% rental program

The bank are valuing it at €110k

Yes, half the price

And they will give him a mortgage of 70%

€77,000 mortgage on a property that cost about €235k after taxes

Thats about a 33% mortgage

Some risk - the income is going to be way more than this

Stupid, stupid stupid, and very expensive for our client. Like it's his fault the banks are all screwed...............

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