Two Sides of Portugal
I dont know what to say about Portugal. There is such a disjunct
between what I see out my window and what I know is happening under the
hood.
Outside, the summer has arrived, and we are back in shorts and
T-shirts. Lunch by the beach is once again the norm. Sitting in the
shade is now back in fashion. It's nice. Who would want to be anywhere
else?
But what is happening under the hood? The so-called Troika, the bailout
police, are back in Lisbon. The bailout deal is verging on collapse;
the country is sliding further and further into ever more debt;
businesses are collapsing in all directions, and the country looks as
if it is about to slide back into ruin and despair. It's all very sad.
The government will not help small businesses, or business start-ups,
and without that incentive, they simply wont start up, and the dole
queues will lengthen, services will get sparser and sparser, and the
populace will sink back into the state they were in thirty years ago.
I have taken my own advice and gone over to renting. I have just taken
on a rather nice two bed apartment at the end of a country lane, but
only two miles from the nearest town. 100 metres away is a river-side
cafe, and there is a pleasant small stream running down to the river. I
have plenty of room, a large garden, peace and quiet, and a lovely view
from my balcony, and I am paying €380 a month. There is also a studio
flat for rent at €230. Let me know if you are interested in that and
I'll give you my landlady's telephone number. She speaks excellent
English.
As I have repeatedly said, buying a holiday home makes zero sense. I
reckon it used to cost me €50 a month for my internet service, another
€50 for my electricity, (all of which comes free with the rental). If I
owned a home I would be paying €500 a year and rising in rates, and at
least €1000 a year in repairs and maintenance. That all comes to
roughly €2,500 a year just in service charges, or just over €200 a
month. I dont have to pay any of that, so the net rent if you like is
about €175 a month.
If I bought the apartment at the current market price (which will
continue to drop, so you'd be buying a depreciating asset) that would
tie up about €65,000. That represents a lot more than €175 a month in
lost income from that sum even at a crummy 5% p.a. Not that subscribers
to The Big Pension, my monthly magazine, are receiving such paltry
sums. The simplest and safest of my investments which is guaranteed by
the US Government, and can be bought online in a matter of minutes, is
paying 11.25% as of yesterday. That would bring you in nearly €145 a
week if you invested €65,000. Let me know if you want to subscribe.
You'd get your subscription costs back after one week's investment.
As I keep saying, if you are buying a retirement home then the
rationale might be different, but as I get older, I dont want the worry
and the work. I'm certainly richer for renting. And If I want to move,
I just give a month's notice and go, either into town, or somewhere
totally different. I feel free again.
john