El Cabanyal is a hot-spot valencia property market now and it seems that prices have started to rise. The Valencia newspaper Levante-EMV published last week that overseas buyers and investors are buying more than 50% of the properties for sale in the district El Cabanyal in Valencia.
This rather shocking news could be good news, but most likely isn’t… Potentially many overseas buyers and investors could get caught in the trap of certain deceitful local estate agents operating in El Cabanyal who also advertise in the UK, namely by the use of a lack of essential information and a strong push to buy a “bargain”.
Not all of agents are bad, but in certain cases we have heard directly from investors during the last weeks, some local agents have been commercialising properties dishonestly, not being transparent with the information given and giving them bad advice.
Our careful investigation with some cases have proven that, potentially, small budget overseas investors (below 100k) are in risk of buying “illegal” properties or properties that cannot be renovated according to the expectations given by agents.
El Cabanyal is like a basket with rotten apples. There are good properties, but others are “toxic”… even good looking apartments.
If you have had issues when buying in El Cabanyal, whether you have bought an illegal property and now realise it, or want to be sure of your next step, feel free CONTACT US for advice about your property investment in Valencia Cabanyal
This is the main problem for the buyers:
The main problem in the Cabanyal is that buyers find apparently cheap properties in a hot-spot market which in some cases cannot be renovated as the local agent suggested when selling the property due to legal restrictions.
In other cases, you will not get a licence to renovate for at least 6-9 months.
In the worst of cases, the apartments are in buildings that will never get be remodelled because the local authority has ruled them out of the legal urban plan called PGOU.
The consequences of buying the wrong property are:
1) You may not be able to resell the property in the future because the next buyer will probably find out that the property is illegal or has several restrictions. Buy to Let investors do not contemplate the selling option yet, but the time will certainly come when you need to sell the property.
2) You may not be able to do the desired remodelling. When viewing properties, the expectations of converting an apartment in the dreamed holiday home tends to be high. Later on, given the complex plan restrictions in this specific area of Valencia, you may not be able to knock walls off, fit a new kitchen or do structural changes or improvements because your apartment is in a particular building or in a certain part of a street.
3) Because of all of this, the value of your property or investment will be affected in a negative way.
4) You may buy a property and not be aware of the restrictions and conduct renovations without being aware of those legal constraints. Doing so will put you in an unenviable place, putting you at risk of having problems with the authorities and having to undo what you have refurbished
Case 1: Illegal reform suggested by a local agent
Gary J. and C. B. are two investors from Brighton who moved two months ago to El Cabanyal district in Valencia. They are investors. “We had been in various local estate agencies, and we had seen dozens of properties. But we got suspicious due to the permanent positive point of view and response from few agents to some of our key questions related to renovation and licences. We found out that, for example, one of the properties on the ground floor we liked could not be split into two properties with two different main entrances as the agent had suggested. It is good that we did not book that property”.
Gary and C. B. now work with independent support (an independent agent) that we have hired, and also with an architect. “They are working together to help us find the investments we want”.
Case 2: Covered defects
Another case is Andy and his wife. They viewed a few properties in May, and the one they liked was illegal. They gave an offer of 55k for an apartment on the fifth floor which was accepted. Luckily, they hadn’t committed to giving any money until the investigation was carried out.
Surprisingly, after their offer was accepted (before any booking) and just one day before the investigation about the property was completed, the agent sold the property to another investor for €57.5k… all in only two days. They sold an illegal property after having accepted Andy’s offer to someone else in the blink of an eye!
The report of the investigation said: “How does this non-compliment affect the building? It affects any building permit. This status means that the public administration wants to let the building exhaust its useful life, most of the time denying building permits which could lengthen its useful life.”
Case 3: The case of the illegal fifth floor
Khaled is a buyer from Saudi Arabia, he viewed about 8 properties from different sources. Before risking any money, we found out that the one he liked was illegal since it was built on the fifth floor in a block of flats where only four flours are allowed. This means that in the case where the building is demolished, such as because of an earthquake, the building can only be rebuilt up to the fourth floor, causing the owner to lose their flat! Nevertheless, Khaled did not mind buying it since the apartment was relatively cheap, believing the building will stay there for a long enough time to make the investment worthwhile. A different point of view!
How to avoid any of this
Do not start contacting several agents to arrange random visits… you will only end up viewing a multitude of bad properties and get emotionally attached to them.
Book visits carefully with the right agent, and be diligent before committing to buy anything. Be weary of very old properties and buildings higher that four floors.