• Listen Live
  • Advertise
  • Contact TKO
WhatsApp +34 603 330 618
Thursday, April 15, 2021
  • Login
TKO Radio
  • Listen Live
  • On Air
    • Schedule
    • Mystery Voice
    • Workplace of the Day
  • Local Information
    • Local Weather
    • Local Live Traffic Conditions
    • Airport Arrivals & Departures
  • Whats On Guide
  • News
    • All
    • International News
    • Local News
    • Showbiz News
    • Spanish National News
    • Strange News
    • Technology News
    • UK News
    Royals will not wear military uniform at Philips funeral

    Royals will not wear military uniform at Philips funeral

    Psychedelic compound in magic mushrooms ‘promising’ for treating depression

    Psychedelic compound in magic mushrooms ‘promising’ for treating depression

    All Out Politics! Canadian MP completely naked in parliamentary Zoom call

    All Out Politics! Canadian MP completely naked in parliamentary Zoom call

    Sanchez announces extension to eviction regulations

    Sanchez announces extension to eviction regulations

    OECD calls for Government to stop tax increases until economy recovering

    OECD calls for Government to stop tax increases until economy recovering

    Mass vaccination centre opens it’s doors in Gran Canaria

    Mass vaccination centre opens it’s doors in Gran Canaria

    • Local News
    • Spanish National News
    • UK News
    • International News
  • Contact TKO
No Result
View All Result
TKO Radio
  • Listen Live
  • On Air
    • Schedule
    • Mystery Voice
    • Workplace of the Day
  • Local Information
    • Local Weather
    • Local Live Traffic Conditions
    • Airport Arrivals & Departures
  • Whats On Guide
  • News
    • All
    • International News
    • Local News
    • Showbiz News
    • Spanish National News
    • Strange News
    • Technology News
    • UK News
    Royals will not wear military uniform at Philips funeral

    Royals will not wear military uniform at Philips funeral

    Psychedelic compound in magic mushrooms ‘promising’ for treating depression

    Psychedelic compound in magic mushrooms ‘promising’ for treating depression

    All Out Politics! Canadian MP completely naked in parliamentary Zoom call

    All Out Politics! Canadian MP completely naked in parliamentary Zoom call

    Sanchez announces extension to eviction regulations

    Sanchez announces extension to eviction regulations

    OECD calls for Government to stop tax increases until economy recovering

    OECD calls for Government to stop tax increases until economy recovering

    Mass vaccination centre opens it’s doors in Gran Canaria

    Mass vaccination centre opens it’s doors in Gran Canaria

    • Local News
    • Spanish National News
    • UK News
    • International News
  • Contact TKO
No Result
View All Result
TKO Radio
Home News Spanish National News

In Madrid, investors eye tenants who still pay just €7 a month

TKO News by TKO News
1 year ago
in Spanish National News
0
In Madrid, investors eye tenants who still pay just €7 a month
Share on FacebookShare on Twitter
Almagro Capital has bought two properties on García de Paredes street in Madrid.
Almagro Capital has bought two properties on García de Paredes street in Madrid.KIKE PARA

The businessman Luis de Ulibarri has just snapped up eight apartments in the center of Madrid for €1.8 million, which comes out to just €225,000 each. Given the current property market, it seems like a great deal, but there is a catch. All the apartments come with a tenant on the old rental contracts fixed by law during Franco’s dictatorship. The lowest rent is €7; the highest is €700 for a place that would cost €1,800 a month at current market prices.

These rents have been frozen in time. While thousands of people in Madrid are struggling to pay exorbitant property prices, these tenants are enjoying the terms of contracts signed before May 9, 1985. Thirty-five years on, there is only a handful of these fortunate tenants left in Madrid, and most prefer to keep quiet, perhaps fearing the envy of neighbors who are paying so much more.

Might we have to wait until 2050 in some cases? Well, we’ll suck that up

Luis de Ulibarri, Almagro Capital

READ ALSO

Sanchez announces extension to eviction regulations

Sanchez announces extension to eviction regulations

15 April 2021
OECD calls for Government to stop tax increases until economy recovering

OECD calls for Government to stop tax increases until economy recovering

14 April 2021

For the landlords, these units have proved an enduring headache. But De Ulibarri, a 40-year-old tax attorney, is one of a number of investors willing to risk taking the properties off their hands. He is the president of Almagro Capital, a Real Estate Investment Trust (REIT) with a portfolio of 48 properties, sizeable enough for a margin of error. The REIT calculates the tenants’ life expectancy, buys the properties, then waits for them to enter the market, when they can expect a return on their investment. “Might we have to wait until 2050 in some cases? Well, we’ll suck that up,” says De Ulibarri.

The eight apartments in Madrid have been purchased from Sareb, the company set up after the property bubble bust to help banks offload their toxic real estate assets. All the units are located in Centro and Chamberí, the two most expensive districts of the capital, where according to the online real-estate site Idealista, a 76-square-meter unit will go for €1,421 and €1,375 a month, respectively. A spokeswoman for Sareb says they have fewer than 100 old-rent properties across Spain out of around 50,000, and the package bought by De Ulibarri was the last of them in Madrid.

These kinds of properties are not registered as such anywhere, but the number of individuals in the Madrid region paying rent far below the market price represents 2.7% of the population, according to a National Statistics Institute (INE) Standard of Living survey, though that figure also includes other groups such as those on subsidized housing.

Luis de Ulibarri, head of the REIT Almagro Capital.
Luis de Ulibarri, head of the REIT Almagro Capital.INMA FLORES

When the owners of these old rental contracts die off, the law allows a maximum of two subrogations, one for the contract holder’s spouse to assume the contract indefinitely, and one for the contract holder’s children for a limited period of two years. These homes have always been sought by investors, and now more than ever as the clock ticks and the rental market continues to boom.

Pay-offs

“Previously, it was big businessmen like López Brea and Francis Franco [one of the late dictator’s grandchildren] who were in it, but ever since the Real Estate Investment Funds (REITs) were set up, many of them have entered the arena,” says Adolfo Calvo-Parra, a lawyer at Madrid’s Association of Property Administrators.

Properties with tenants on old rental contracts used to be considered high-risk purchases, and some landlords notoriously resorted to intimidating the occupants to see if they could chase them out. Less well known are the stories of tenants who received large amounts in exchange for breaking their old rental contracts, according to Calvo-Parra. Other lawyers consulted by this newspaper say they have met tenants who were given more than €100,000 to leave.

But at this point, most of the remaining old-contract tenants aim to be there until the end of their days. “They are the ones who have turned down the offers,” says Ramón Gutiérrez of Adarve Abogados. There is also a risk that the person on the old rental contract will suddenly produce a relative to hand the lease to. “We are aware that an older man might marry his carer,” says De Ulibarri.

These homes have always been sought after by investors, and now more than ever as the clock ticks and the rental market continues to boom

The eight apartments are the first old rent purchases Almagro Capital has made, and De Ulibarri points out that this line of business will not be central to the REIT. The main thrust of their business consists of properties that they have bought from elderly people who then lease the same property right back from them until they die. Consequently, their shareholder reports include the ages of their tenants and their life expectancy.

Another investor in property with occupants on old rental contracts is Alejandro Bancalero, a 47-year-old lawyer who runs the law firm Bancalero Abogados. He only buys homes with tenants over the age of 80 because anything less seems like a poor investment, given life expectancy nowadays. His company has seven properties in Madrid: in La Latina, on Serrano street and in Carabanchel, and others in Seville and Marbella.

They may lose money temporarily on some of these properties. For example, one 83-year-old tenant pays just €90 per month and the company foots the community bill of €300 as well as the annual IBI property tax. Bancalero’s advice is to foster a sense of resignation if you want to get into the game. “We work in the long term. You have to be patient,” he says.

When Franco was a progressive

The Franco regime”s urban rental law of 1964 could have been the work of today”s Socialist government: “The liberalization movement of urban property must be tempered, not only at the rate determined by the country”s economic circumstances, but also according to the undeniable demands of social justice, which constitute the core and the raison d”être of our political regime,” began the legislation protecting tenants.

Franco established the law some years after the Civil War to protect people who had lost their homes in the conflict. Consequently, landlords had little control over how they rented their properties. “Landlords harbored a tremendous animosity towards our ‘friend’ Paco [Francisco Franco],” says lawyer Calvo-Parra.

Ironically, it was a Socialist government that eventually put an end to Franco’s rental system. Proposed by the Socialist Party (PSOE) minister Miguel Boyer and known as the Boyer Law, the new legislation ended the obligatory renewals of contracts signed after May 9, 1985. Later, the Urban Leases Act of 1994 limited the number of people who could assume the old contract to a maximum of two, with a view to phasing them out.

Now, tenant protection has once again become a pressing issue. Franco’s solution was to maintain the price that was fixed by the landlord and tenant when the contract was first signed; now, the governing Socialist coalition is proposing price caps according to the district. The measure would be put in the hands of regional governments and local councils, but the Madrid regional government has already rejected the measure.

Source : EL PAÍS

TKO News
Author: TKO News

ShareTweet
ADVERTISEMENT

Related Posts

Sanchez announces extension to eviction regulations
Spanish National News

Sanchez announces extension to eviction regulations

15 April 2021
OECD calls for Government to stop tax increases until economy recovering
Spanish National News

OECD calls for Government to stop tax increases until economy recovering

14 April 2021
Mass vaccination centre opens it’s doors in Gran Canaria
Spanish National News

Mass vaccination centre opens it’s doors in Gran Canaria

14 April 2021
Regional authorities informed of delay of Johnson & Johnson vaccine over blood clot concerns
Spanish National News

Regional authorities informed of delay of Johnson & Johnson vaccine over blood clot concerns

13 April 2021
Man arrested after two die in Gran Canaria in suspected family violence case
Spanish National News

Man arrested after two die in Gran Canaria in suspected family violence case

13 April 2021
Commission to be set up to mark half century since Picasso death
Spanish National News

Commission to be set up to mark half century since Picasso death

13 April 2021

Currently On Air

  • The Bigger Breakfast Show
    with Trev Massey
    Thursday, 9:00 am - 12:00 pm

Coming Up On TKO

  • The Light Lunch
    with Carla Stone
    Thursday, 12:00 pm - 3:00 pm
  • Chris Dyson in the Afternoon
    with Chris Dyson
    Thursday, 3:00 pm - 6:00 pm
  • The Gold Show
    with Paul Baker
    Thursday, 6:00 pm - 8:00 pm

Playing on TKO Gold

Loading ...

Local Weather

Local Traffic

Currency Exchange Rates

Сurrency converter by mconvert.net

Music History

No Result
View All Result

Recent Posts

  • Royals will not wear military uniform at Philips funeral
  • Psychedelic compound in magic mushrooms ‘promising’ for treating depression
  • All Out Politics! Canadian MP completely naked in parliamentary Zoom call
  • Sanchez announces extension to eviction regulations
  • OECD calls for Government to stop tax increases until economy recovering

Recent Comments

    Archives

    • April 2021
    • March 2021
    • February 2021
    • January 2021
    • December 2020
    • January 2020
    • December 2019
    • November 2019
    • October 2019
    • July 2019
    • September 2017
    • January 2017

    Categories

    • International News
    • Local News
    • Music
    • Mystery Voice
    • News
    • On Air
    • Showbiz News
    • Spanish National News
    • Strange News
    • Technology News
    • UK News
    • Win

    Meta

    • Log in
    • Entries feed
    • Comments feed
    • WordPress.org

    Categories

    • International News
    • Local News
    • Music
    • Mystery Voice
    • News
    • On Air
    • Showbiz News
    • Spanish National News
    • Strange News
    • Technology News
    • UK News
    • Win

    Recent Posts

    • Royals will not wear military uniform at Philips funeral
    • Psychedelic compound in magic mushrooms ‘promising’ for treating depression
    • All Out Politics! Canadian MP completely naked in parliamentary Zoom call
    • Sanchez announces extension to eviction regulations
    • Listen Live
    • What’s On Guide
    • News
    • Advertise on TKO

    © 2020 TKO Radio - Love Music... Love Life... Love TKO...

    No Result
    View All Result
    • Listen Live
    • On Air
      • Schedule
      • Mystery Voice
      • Workplace of the Day
    • Local Information
      • Local Weather
      • Local Live Traffic Conditions
      • Airport Arrivals & Departures
    • Whats On Guide
    • News
      • Local News
      • Spanish National News
      • UK News
      • International News
    • Contact TKO

    © 2020 TKO Radio - Love Music... Love Life... Love TKO...

    Welcome Back!

    Login to your account below

    Forgotten Password?

    Create New Account!

    Fill the forms below to register

    All fields are required. Log In

    Retrieve your password

    Please enter your username or email address to reset your password.

    Log In