rental period pelseac

[stuartp]

hello,

would anybody have a rough idea how many months a year you might be able to rent a villa on the peljesac penninsula.

also are prices here still rising or have they flattened out.

many thanks

stuart

[Graham - Bosmere]

8 weeks a year. Any extra a bonus.

[AjaxKM]

Thats depressing is that because everyone between here and Dubrovnik is jumping on the bad wagon?

[Mike]

No, that's just the season. They have a much, much shorter season/summer than somewhere like Southern Spain.

[Mike]

Also I have just got back from being out there and I was talking to a guy who bought a place 2 years ago for 60 000 euros and it is now valued at 240 000 euro. So the huge gains I would definately say you have missed, it will still go up but no where near as much as it has over the last few years. The boom is definately near the top.

[Culchie]

"The boom is definitely near the top"

That was said about Ireland 8 years ago !...when the average house price cost about €70000, now it's over €250,000.

Property above all investments has historically been a low risk investment, and has shown to be a wise move.

The question for stuartp (and ajaxKM ?) is are they in a position to buy property without being reliant on rental income to subsidise their investment repayments.
If 8 weeks is predicted, can they survive if they only get 4 weeks?...it's a number crunching exercise...especially for the first year.
When their visitors come back ranting and raving about the beauty of the place, then they should have people referred to them to go out the following year, and hopefully things will look after themselves then.

If they can, then the Peljesac, as is Croatia as a whole, is in great demand, infrastructure to Dubrovnik and Split etc is improving, tourism is beginning to really boom, Croatia is in line to join the EU, and don't forget it has to be one of the most beautiful areas in Europe !!

Why wouldn't be a good investment?

P.S I also think that the tourist season will expand into May, June and September as the years go on.

Regards

Culchie

[Mike]

That's what I mean though, her place has already gone up over 400 %

[Anja]

The fact about 8 weeks a year rental is true.
The weather is not so great during the off season.
You can not relay on rental income, this is just extra to locals who live there and have normal jobs.
In many remote places there is nothing happening oct-may... if it is raining you have absolutely nothing to do..
If you want a higher income from rental you have to go
to busier places and towns like Dubrovnik and Split.

Generally, there is no many organised activities in Croatia, in past people were making renting money only on sun and sea.
This situation is about to change, less and less people in the world go on holiday just to lay on the crowded beach.
Croatia has loads more to offer and I can see people who live there are beginning to notice that.

Naybe there is soon going to be a little Las Vegas on island of Jabuka

[Culchie]

It must be some spot ! That's 100% per annum

It doesn't mean that that's the end of the growth just because it's done well in the last 2 years.
Sure 100% appreciation per annum that your friend got is something else, but what's wrong with 10 or 15% per annum, that is about 20 times what the bank will pay you.

Here's an TEXT example of a €100K purchase.

€100,000 * 15% * 3 years = €152,000

Say he's borrowing (refinancing) €100,000, 20 years = approx 550 per month repayments

36 * €550 = €19800

Still up €32,000 and bear in mind approx half his repayments went on the principal, the other half on interest, so the original debt was reduced €9900 to €90,000.


So now he has a property of €152,000 but owes €90,000...not bad I'd say.


Note, I didn't include a penny rental income in the above permutation.

So if he does get the 8 weeks per annum @ €50 per night , 3 years = €8400 rental income


(nothing wrong with that!)

In the long term, property is the best investment there is.

What stuartp needs to do is make sure he buys wisely, and can afford the repayments, especially for the first couple of years.

Culchie