Learning to Layer: Covering the Costs of Three Properties in Iberia

We own three houses in Europe – Portugal and Spain – for less than it cost us to buy one “entry-level” property in Sturgeon Bay, Wisconsin … Staunton, Virginia … or Jacksonville, Florida (three places we’ve lived over the past 10-12 years).

Mind you, we’re not talking about upscale, Architectural Digest places in features and accoutrements. Just nice, comfortable, pleasant, typically attached homes. Of course, if it’s a spectacular stand-alone home you want here in Spain or Portugal, plenty are available for $250K or more.

But we’re basically “homebodies” who like to be connected to our neighbors, along with the savings inherent to “row” houses. Our last USA house was in Sturgeon Bay, Wisconsin. A great place for tourists, but lots of limitations for residents. We bought and sold our west side of town property – 3 BR, 2 BA, LR, DR, kitchen, two garages, fenced yard, and unfinished basement – within less than a year for the same price we paid for it: $135,000. Now, according to all reports, there aren’t any pleasant properties available in Sturgeon Bay for less than $150,000. Realtors and property agents tell us that, regardless of condition, any such property sells before it’s technically been listed!

In Charlottesville’s shadows of the Shenandoah Valley, lovely Staunton, Virginia, has plenty to offer in terms of culture and quality of life! Just ask our favorite Realtor, Jenny McGuire (who’s been successfully selling the area “yard by yard”). Go to Realtor.com and see what’s available: “$135,000?” ask the Realtors, incredulously. “Maybe two bedrooms, with one full bath. But, it will probably need work!”

Meanwhile, we follow the progress of Tony Caribaltes, our friendly Jacksonville, Florida, Realtor … along with a few others. Heck, we purchased our “historic” Springfield-zoned home – with five bedrooms, no basement, but three full bathrooms – during the housing “crisis” for almost $170,000. Between a new kitchen, new HVAC units, termite damage repairs and control, replacing the grass and the weeds with colorful pavers in its small-ish backyard, ultimately the place cost us $200,000. Two years later, with the “crisis” still going, we were ready to move on and sell, but settled for far less than we initially paid—after the house had been on the market (with three different real estate brokerage firms) for about a year and reduced in price. To be honest, had we held onto that property, today we probably could have fetched twice what we’d paid for it–or more!)

But, that’s not the point here … or maybe it is:

For a lot less than that, we now own three conjugal properties: two in Portugal and one in Spain.“Yeah, that sounds great,” mockers will say. “But what about all the costs to upkeep, maintain, and run those three properties?”

Spending less than $14,000 per year on comprehensive property insurance, taxes, heating and air conditioning, furnishings, water, twice monthly cleaning, trash pick-up, and all other living expenses, we’re maintaining all three houses on my meager Social Security payments.

The take-aways?

We don’t live in the most expensive areas: Lisbon, Madrid, Porto, Barcelona. We don’t have brand new properties with all the expected amenities. We live with the locals, driving to the “big city” about 20 minutes away for major shopping, be it groceries at a variety of supermarkets, clothing, our whatever else tickles our fancy in shopping centers and malls. Ditto for cultural pursuits: live theater, museums, movies, concerts. (Not that it matters right now, with all the social distancing and Covid restrictions.) Our two, 50-year-old row houses were created from concrete and plaster, with no insulation … except for their new, double-pane windows. So, it can be hotter inside than out during the summers and colder when it’s winter. But we compensate with inverter aircon (and heating) units and a marvelous pellet stove that we use only when occupying specific rooms.

Furniture has been moved time and again among the three properties, as artwork and furnishings are rotated for new perspectives

And we’ve learned how to layer.

Electricity is relatively expensive in Portugal and Spain. But the emphasis is on that word “relative.” Becoming accustomed to Portuguese prices for everything from health care to property insurance and taxes, we freaked when we received our first electric bill (before turning down the heat from the inverters and buying that pellet stove): about $450 for those first two months. But, after our melt-down, we remembered paying about $500 per month for electricity in Florida and $350 or so for gas and electric in Wisconsin. It’s all in one’s frame of reference …

Meanwhile, without any rental income, we’re maintaining three separate residences.

Lousa Living Room

Our primary property is in a village outside the city of Castelo Branco, Portugal, in the country’s interior. It’s a sprawling, three-level townhome comprising some 1,600-square-feet with two separate entrances, two “master” bedroom suites (one for us, the other for guests), two full and two half baths, two kitchens, a “family” room and formal living room, two smaller dens for office use and storage, and outdoor areas including a large, covered terrace, a “courtyard” outside our kitchen, and a balcony off the living room. We live on the main street in town, with our bedroom facing the street … so it can be noisy, especially during all those festas and ferias Portuguese people enjoy (while we’re trying to sleep). Our annual property taxes total $150 (dollars not euros) and insurance costs us about the same. High-speed telecommunications (Internet, cable TV, a landline and a mobile phone) run $60 per month. Purchase price of this property with all fix-ups, add-ons, and improvements: US $65,000.

Olvera Multi-Purpose Room

Home-away-from-home is also in the interior … of Spain, in an Andalucian town of about 9,000 (Olvera), where the provinces of Málaga, Sevilla, and Cádiz intersect. We’ve owned this little pied-a-terre off and on for fifteen years now: We bought the three-level pad – an “all-purpose” room on the street level, a bedroom one flight up, and the upper floor divided between a bathroom and terrace with remarkable views – at the height of the market … sold it at a major loss when housing prices crashed around the world … and then bought it back from the buyer for half the price we’d originally paid. Here, our taxes are about $60 per year (including daily trash pick-up!); we pay $200 annually for comprehensive homeowner’s insurance; and our lightning-fast Internet connection is $22 billed to our bank account monthly. We paid $26,000 (not including Spain’s 8% property transfer tax—it’s only 0.1% in Portugal!) and spent another $9,000 on home improvements (new windows, doors, appliances, cabinetry, handrails, kitchen cabinets, bathroom, etc.) Total: $35,000.

Elvas Living Room

Last, but certainly not least, is our “betwixt-and-between” home, which we recently purchased in UNESCO Heritage site Elvas (Portugal), on the border with big-city Badajoz (Spain). In some ways, this is already turning into our favored place … for a bunch of reasons: About three hours from both our house in Portugal and Spain, it’s an easy drive and great get-away. The property is about half the size of our primary residence, but twice as big as our place in Spain. With a well-proportioned living, dining, kitchen, bathroom, and two bedrooms, it benefits from a big bonus: a compact, enclosed backyard with two fruit-laden trees—perfect for the dogs (as well as grilling outdoors).

Also quite comfortable is the layout and space configuration, with a good-sized bedroom in the middle of the house. Although the “Alentejo” area of Portugal, where it’s located, tends to be a bit hotter in the summer and colder during winter, the exterior walls of this house are built from boulders between two and three feet thick. That’s what we call “natural” insulation (although we’ve replaced the windows and added air conditioning). Purchase price for this newly-renovated and refurbished property including all fix-ups, add-ons, and improvements: $50,000 in US dollars or about 42,500 euros.

So there you have it: Three very different and separate properties with a combined purchase price – including all appliances, repairs, improvements, and upgrades – of $150,000.

Capital costs are one thing, monthly expenses yet another. I did say at the beginning of this narrative that two of us live together in these three properties … at a combined cost of about $1,725 per month—my Social Security payment. How do we do it?

Here’s our budget, based on euros:

• €250 Electricity*

• €50 Water

• €120 Petrol/Gasoline for the Car

• €30 Propane/Butane for Heating/Cooking**

• €75 High-Speed Internet/TV/Telephones

• €75 Property Taxes (for all three)

• €10 Vehicle Taxes (a 2018 Ford “mini-van”)

• €150 Comprehensive Health Insurance for Two (one 70, the other 56)

• €75 Other Insurance: Car (€30)/Properties x 3 (€45)

• €500 Food: Groceries & Restaurants

• €65 Cleaning & Upkeep: Properties + Laundry

• €100 Miscellaneous (Unbudgeted)

€1,500 Total Estimated Monthly Expenses

That’s less than $1,800 per month (based upon the current currency exchange rate).

Of course, others pinch pennies or pence much better than we do and are far more frugal.

But, hopefully, I have made my point: You can live comfortably and well on a modest budget, including health care and insurance, taxes and home ownership.

The caveat? In Portugal and Spain. Probably elsewhere, as well!

*Our primary residence is all-electric: HVAC + cooking. **Our two smaller houses use propane for cooking and water heating … electric for all else.

Shared here are personal observations, experiences, and happenstance that actually occurred to us as we moved from the USA to begin a new life in Portugal and Spain. Collected and compiled in EXPAT: Leaving the USA for Good, the book is available in hardcover, paperback, and eBook editions from Amazon and most online booksellers.

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