Valencia Property Blog

There is only one definitive answer to any question about real estate in Valencia or elsewhere. Anyone who tells you anything that is a universal truth, a well known fact or an accepted norm is either lying to you or not taking into consideration your personal circumstances or situation. In this week's blog we are going to look into some of those "Universal Truths" you get told, what they can really mean and where they might well be wrong.

We have a history of going against the grain at Valencia Property. We have clients who have thanked us in our excellent reviews for warning them off certain properties that we knew wouldn't be right for them. Telling you that universal truths are actually not true, telling you the truth that goes against accepted wisdom is something we like doing. Let's look at eight universal truths and what they actually mean. Do they hold or do we believe that in the end... it depends?

1) Negotiate Hard

We were thinking about this last week about how negotiating hard is often seen as something you have to do to get the best price and guess what? It's totally wrong. Counterintuitive though it may be, negotiating too hard will usually lose you the property and it's because of something that is inherently wrong in the thought process and that is that you are negotiating against the owner. You aren't. We have been insisting on this recently and as a result I actually made a special edition of the podcast last week. You can listen to it below.

It's worth listening to the podcast in full for all of the nuggets it contains, it will only take up ten minutes of your time, and it's worth subscribing and listening to all of the episodes as they appear but for those of you wanting to move onto the next universal truth here's the lowdown.

You are competing against other buyers, not the owner. Most people see the owner as their adversary. They aren't. They are your true ally in the purchase process. Your lowball bid will be used as ammunition by the owner and selling agent to prove to other buyers that the property is in demand and the owner is in no hurry to accept your "frankly ridiculous" offer. And the only truth here is that the owner will not come down in price for anyone they believe to be trying to price gouge them. They might come down for someone else, just not you.

2) Always Buy in the City Centre

If you are looking for a city property then the universal truth is the more central the better. Properties in the centre hold their value better and are easier to sell on in the future apparently. It ain't necessarily so.

Where this isn't really true is on the lifestyle issue. It assumes your life in the place you are buying is going to be happening just in the centre. The centre may have all of the tourist attractions you love, the cathedral, the best restaurants, the old town cafes, bars and shops but it also has what you may not want, the noise, the tourist trail and the tourist tat shops and the lack of a resident community as tourist transcience takes hold, especially when you are no longer a tourist but a resident.

It might well be a great place to visit and hang out but if everybody else thinks the same and your day to day life involves peace and quiet and wanting to take your bike out into the fields and mountains then the city centre may not work for you. It might turn out to be hell on Earth. And of course in Valencia you may want the choice of a short walk to the beach and that's not an option from the city centre.

If we talk about the main argument for this though, that values go up in the good times and hold better in the bad times in the city centre. Well that's not true either, at least not in Valencia. Alternatively prices may fall more from a higher point if prices were previously exuberant. That's certainly what happened after 2008 and the financial crisis. And in terms of rising in percentage terms there are many other places that have risen more, in fact much more than the centre in the last decade.

3) Never Buy a Reform Project

I'd say this is the stupidest of all universal truths especially in a market where finding exactly what you want may well be a total impossibility. As long as the price of a property to modernise is right and you have a trusted reform crew (We have) I'd actually turn this one on its head and say always buy a reform project.

If you buy a new property or a recently modernised property you pay for that modernisation and the high building costs associated with it and it still may not be exactly to your tastes. You may still want to open the kitchen to the living room, create a second en-suite or make two small bedrooms (that the developer has made in order to lie about there being "Three large bedrooms") into one.

Buying a place that you can make exactly as you want it by starting with a blank canvas might actually save you money. Even if it doesn't, and the modernisation cost when added to the purchase cost is slightly higher, it still means you get what you want without compromising. New builds and other people's tastes in reforms are usually a compromise (And often those modernisations have been done cheaply and can start looking shabby pretty quickly)

4) Always Get a Mortgage (It's Free Money)

This is probably the universal truth that holds true for most people. It's not "free money" exactly but it's pretty cheap money. You need to keep your eye out for things that can make things more expensive than they need to be when asking for a mortgage such as arrangement fees, early repayment penalties, the rate you actually get versus the one on the advert, lifetime insurances built into the money they offer you and whether your income profile qualifies. It can depend on your tax situation, your country of origin, how long you're thinking of holding the property and whether you'd sleep at night with a payment. Free money isn't exactly free if you're paying interest for it for 25 years but if your investments are paying you a higher percentage and you qualify, then a mortgage continues to be a no-brainer for most people.

5) Never Buy Near a Bar

What this translates to is the fear of noise and most especially night-time noise. A bar that closes at 4pm because it does all of its business via breakfasts, the famous Valencian Almuerzo mid-morning then a few lunches isn't really an issue. Equally a third floor with excellent double glazing is not the same as a first floor with a terrace overlooking the bar. Conversely a "quiet" street might have a school, church bells nearby and a bin lorry collecting outside your bedroom window at three in the morning. Go and stand outside the property at different times. You might be pleasantly surprised. A bar in itself isn't a problem but a bar that is still open at two in the morning with the windows open in July and all the smokers standing outside and taking no notice of the "please keep quiet because the neighbours don't like the noise" sign is most definitely a problem.

6) Buy the Worst House on the Best Street

A universal truth that may work for rows of identical looking houses but most certainly does not work when we are talking about apartments. This truth assumes that not only can you afford to improve it but also that the community not only allows it but is proactive in maintaining the building itself and obviously, if it is currently in a state it's unlikely that you will be able to convince the community to do something different. The "worst property" isn't the worst for a reason nobody's mentioned, you can see it. Structural issues, a dysfunctional community, an expensive listed facade, a neighbourhood dispute, a building with a pending ITE (Buildings over 50 years old need this building certificate). Sometimes the worst property on the best street is cheap because it has the potential to be or is becoming a money pit despite the nice address. And sometimes the best house on an average street is the better buy because you get the space, the light and the terrace you actually wanted and maybe in the future the rest of the street can catch up.

7) Rent First. Don't Buy Until You Know The City

What this really means is don't buy in a drunken haze on your first weekend in the city. What it doesn't mean is rent for a year or even longer while prices rise and force you to downgrade your requirements. Use Stepping Stone Rentals for an initial three month rental by all means but if you know that you want to buy then don't tie yourself into a long term rental.

If you know the city and you are comfortable with it then why not take the plunge when the right property comes up? It might cost you 10% more for something that doesn't suit you as well next year. We once wrote an article that for some "The train has left the station and it's not coming back any time soon". Sitting around renting for a few years can mean this is true. We took out a client last year who had been renting a rather exclusive property for five years at 2k per month. Everything they could afford was a downgrade on where they were living so they continued to rent to the tune of 24k annually. They have currently paid the owner over 160k depleting their savings while prices have risen by around 80%. Imagine what they could have got originally and how much it would be worth now.

8) Prices Have Peaked. Wait For The Crash

We had one client who kept telling me this for three years before Covid. Then they insisted after Covid. It's now six years since Covid and prices continue to rise. They waited. They eventually stopped insisting they were right. All quiet on the western front. They missed out. As stated above while they waited prices rose by more than 80%. I remember them telling me a modernised three bedroomed place in the Cabanyal was overpriced at 125k and they would only offer 110k. It sold at asking price. That same place would now sell at double that price. But they knew better than me.

Now if you had this conversation with me in 2007 I might agree with you, in fact I said it myself at the time for many overpriced properties back then. However, and here goes with the famous last words, this time it's different. There is no oversupply, interest rates are low still, demand is high, banks are willing to give mortgages currently, there are few new builds, the economy is actually thriving.

Conditions could change. There could be a crash. I could be wrong. If you wait for the crash you might be waiting until you draw your dying breath. If the property suits and the price is right for you then go for it. Waiting for the owner to come down in price, as I said in the podcast above usually means we have to tell you "It's just been sold". If you're buying to live in for ten years or more then the price you pay matters far less than whether the property is the right one for you, 5k extra than you'd ideally pay shouldn't move any needle (In fact if you are financing that would probably mean an extra 25 euros per month). If you're buying to flip in eighteen months, firstly don't, and secondly it's an entirely different conversation and you shouldn't be having it.

Conclusion

Universal truths are neither universal nor truths in the Valencia Property market currently and honestly, they never really have been. Some things hold true to a certain extent but most fall down under the slightest stress test and the stress test has to be your personal circumstances. By all means keep them in mind but make sure to stress test all of these no-brainers and any other assumptions or universal truths you hold. You never know how right, or wrong, they may be.

Valencia Property of the Week

Sea Breeze If You Please 348K

If you do like to be beside the seaside then we have just what you are looking for. Just 100m from the Malvarossa beach and right across the street from the 5-star Las arenas hotel, this first floor walk up is big, bright and a perfect base whether it’s as a permanent residence, a bolthole to spend a few months of the year or even as a rental investment. To see all of the photos click here.

Stepping Stone Rental of the Week

Among The Palaces

We are quite delighted with this exceptionally beautiful flat that has undergone an incredible transformation from ruins to palace.

Located on the third floor of a building dating from 1830. The location of the flat is unique, right in the heart of the old town. From one of the two balconies, you can see the Torres de Serrano, historic facades, and the other balcony overlooks one of the oldest towers in the city.

When you step out of the apartment, you are moments away from Turia Park on one end and at the Cathedral plaza del Virgen on the other end.

The flat is located on a corner with big windows which makes it is very light and you have no neighbours above. Well insolated and quiet. It is completely renovated, however fortunately, the owners have preserved the original details as much as possible - giving the apartment a mix of old and new.

Two large bedrooms, one with a double bed, and the other furnished as a workspace with a sofa bed. There is a bright and high ceilinged living room and separate kitchen. The bathroom has a large walk-in shower.

High quality finish, stylish decoration, and everything has been thought of. All you have to do is put down your suitcase and start immersing yourself in to the rest of Valencian life.