Bad Buildings and Worse Neighborhoods

In our search for a bank repossessed property we are quickly discovering that most of the property currently owned by banks in Madrid is not in good buildings, and they sit in mediocre or poor neighborhoods. Of course, this is totally logical that the first or most to lose their homes would be on the lower level of the socio-economic scale, having purchased only the most affordable flats in boom times.

The most interesting finding of the day was what appears to be a warzone (see photo!). It’s actually located in a very good neighborhood. The previous owners were investors trying to turn it into 2 properties but the building community wouldn’t allow it so they left this mess.

The bank is asking for 220,000 which of course is overpriced as always. I am going to check with someone I know who does building to see what the cost would be to develop the interior. If the bank would accept a much lower offer we could make it a 4 bedroom flat (it’s 100 sq usable meters), rent out each room for 350€ for a total of 1500 month. If we could get a fixed interest rate of 4% our mortgage would come out to less than 1200/month over 25 years (borrowing 160,000 to purchase and 60,000 to renovate).

Anyway, I’m a novice and this is just a rough estimate. It seems like it would be a fun project to learn from if the bank accepted a fair offer and the renovation could be done. In the meantime, the search continues. Now I’m going to start filtering out shady neighborhoods that I’m more familiar with from our visits.

I setup a Google Doc to keep track of properties and visits, also to keep tabs on the better ones to see if they are still around in several months and possibly cheaper offers would be accepted.