What Would YOU Do?

[madrid2008]

Hello everyone,

My name is Dean and I am from the UK.

I moved to Madrid 3 years ago, and my girlfriend's parents gave us a plot of land (South Madrid).

We build our dream house. We came into a bit of cash, so we paid off 90,000 euros of the construction costs, thus leaving us with a mortgage of around 140,000 euros.

Bear in mind the plot of land was valued at 180,000

Anyway, we now have our mortgage of 140,000 euros, and by early 08 we will have around 30,000 in cash in the bank account.

Now, here is where I need the expertise of you guys and gals to guide me. Bear in mind I know very little about this, so any complex jargon will go straight over my head.

My initial plan was to pay off our mortgage as soon as possible. The mortgage free lifestyle is everyone's dream.... or so I though. Then I met a woman who was worth 30 million+ due to property investment, and she said "Dean, if you get a bit of money, then get another mortgage on another house and rent it out, build a portfolio of property"

Ok, sounds great.

The way I see it, I have 4 distinct paths that I could take (correct me if I am wrong). Today I am asking you experts to tell me what you would do if you were me.

PATH 1 - Use the 30k to buy another property. I don't know the mortgage rules, but I am pretty sure I have to pay xx% of the mortgage and they pay the rest. Would 30k get me very far? Would having an existing valuable property help?

PATH 2 - Sell the current house and buy a smaller home outright, thus leaving me with the working class dream of no mortgage.

PATH 3 - Sell the current house, and buy numerous houses (with mortgages) around the UK and Spain.

PATH 4 - Rent my current home as a luxury rental, then use that money to travel the world, and once I am finished travelling, perhaps get another property.

Now, you guys are going to need some more info, so here goes.

We have not had our house valued. However, we have looked at houses in the area, and we believe around 600,000 euros would be the valuation.

In terms of renting our property - we are 45 mins from Madrid City Centre, this is a bit of an issue, as the business people and expats will likely want to live close by. That said, 600-800 euros in Madrid centre gets you very little, so perhaps I can tempt people to come further away? That said, I would expect at least 2,500 per month as a longterm rental, and 1,000 per week as a holiday one.

* I can't see people wanting to stay here on holiday, not many people speak english, and all the attractions are in the centre. That said, they are building a direct train route to the city from our town, that should be done in 2 years, and should make a huge difference.


Anyway, sorry for the long post.

What would you do if you were me?

Dean

[EDP24.co.uk/overseasprope]

Dean am not a professional, but i would urge you to consider what sacrifies economically tou are willing to make in order to achieve- do you have to stay in Madrid, could you cope with a downsize be honnest with yourself about the level of financial risk you are willing to take on as this will have emotional consequences. no doubt if you have the opportunity then look at investment property but be clear about the time frame you are happy for an investment to mature over.

Hope all goes well

Keir

[Costa Rica Real Estate J]

Think i have to go back to the basic questions yet paramount to examine and analyze things over again. I must do a scheme to prioritize and know what is what. Seek help from the professionals.