Advice on buying a riad in Marrakech

I also would love to know the answer to your question as this would be a great opportunity for someone to consider something of this nature . Having a place while on vacation of your own and then renting the rest of the year while not there .

Awesome

tommymanchester wrote:

Hi, I am hoping to get some advice here regarding investing in a riad in Marrakech. I am looking to purchase a modest 3 bedroom riad, somewhere in the medina. It will be a holiday home for my own private use a couple of months a year, and then short term lets on Airbnb for the rest of the year.
Am I right to think that riad prices are quite good at the moment? I am a bit concerned about the holiday let market though. There seems to be plenty of similar riads on booking sites that have received very very few bookings for the rest of 2022. I know tourists have only just started returning to Marrakech, but many of these riad have none bookings at all, ie all dates available.
I have also read somewhere that the riad market is very saturated, not sure how well a small 3 bedroom riad will do these days?
I am financing this purchase with a mortgage. Do you think this is a good investment long term? Any comments would be greatly appreciated, thanks! 🙏🏻

Hi Tommie

Riad in genreal are good opportunities but the rental maker in Morocco is booming. To hold onto an assets within Morocco will only increase in value if maintained correctly.

As it's a three bed property I would not call it a riad but you would target it more towards the everyday person local and foreigners.

Riads are generally called riads when a local family is living inside and managing it to give tourist a local experience

There are lots of things you can do with the property.

I myself, am an expat from the U.K. living in Morocco for 7 years several companies globally but asset management and property investment holder also within Morocco marrekech.

I strongly recommend the rental market and depending on your budget you could even buy land and build as prices are affordable and prices are rising on a daily bases.

Feel free to private message for contact info if you or anyone wants to.

Hope it helps.

Thanks

Arif Esa

Hi

We bought a riad in the medina in 2019 and it did very well on Airbnb until the pandemic.

I wouldn't worry too much about holiday let rentals not being very booked up into 2022. We usually get booking at pretty short notice, usually less than three weeks.

I wish you the best of luck
J

tommymanchester wrote:

Hi, I am hoping to get some advice here regarding investing in a riad in Marrakech. I am looking to purchase a modest 3 bedroom riad, somewhere in the medina. It will be a holiday home for my own private use a couple of months a year, and then short term lets on Airbnb for the rest of the year.
Am I right to think that riad prices are quite good at the moment? I am a bit concerned about the holiday let market though. There seems to be plenty of similar riads on booking sites that have received very very few bookings for the rest of 2022. I know tourists have only just started returning to Marrakech, but many of these riad have none bookings at all, ie all dates available.
I have also read somewhere that the riad market is very saturated, not sure how well a small 3 bedroom riad will do these days?
I am financing this purchase with a mortgage. Do you think this is a good investment long term? Any comments would be greatly appreciated, thanks! 🙏🏻

Tommy Manchester,

I have to be honest with you.

1. The run-of-the-mill Riad Market in Marrakech (costing 400K Euro or less) is saturated. Yes.

2. Can you make money from holiday let out? It depends on one's definition of “making money”. If it is interpreted as “cash surplus income from a specific property” then it's only possibly if you buy cash (no mortgage). This is the truth. Remember maintenance is a great part of owning a property.

3. Should one buy a Riad with mortgage? Only if your job abroad can finance it. Note that this option is Not available to U.S. Citizens; We must buy cash, as the U.S. Government forbids bank financing on properties in foreign lands. This is also one of the reasons we U.S. Citizens are granted with a 10-year Carte de Séjour on our second application as long as we own valuable property: We have proven that we are not a burden to Moroccan society.

4. Do you know who makes money from the mid-to-low price Riad Market in Marrakech, or any where in Morocco for that matter? The Real Estate agents, the independant Street Samsars (who will bleed you to death, so stay clear), the General Contractor (because one cannot buy a property and not spending money to fix it), and the Notaries.

5. Is it a good Long-term investment? Yes; for two reasons alone: There is no inheritance tax if you are going to give your property to your Legal Spouse or Children; No Capital Gain Tax (CGT) once you own it for more than 8 years. Note that in order to proof the latter requirement the address on your Carte de Séjour has to match the address of the property (main residence in Morocco), and ideally you need to be able to come up with proof of payment of utilities for 8 years. When all of these met, the proceed of the sales can be repatriated to your home country within one year in stages.

Just to put it in perspective, Vanessa Branson injects between 1M and 1.2M Euros of cash every year to keep her Riad in Marrakech - the one in the Medina - in operation (you know which one, right?), since 2018. It has nothing to do with the Pandemic. Of course she operates her Riad in a calibre that can make Marie-Antoinette jealous, but you get the idea.

Despite its reputation of being affordable, Morocco is not the playground of the poor, be it local or foreigners. Just like I have mentioned in another post, the only advantages of owning properties in Morocco - and living in Morocco - are the affordable cost of living (1/5 London or Singapore; 1/4 Los Angeles or NYC), its low Property Tax, and its proximity to Europe.

Hi

We bought a riad in the medina and it's wonderful to be able to come and enjoy it but while we aren't there it provides a good extra income renting it out on Airbnb. (probably paying for itself in 10-15 years, to give you an idea of the RoI). We bought from Bosworth Property Marrakech and we would recommend them wholeheartedly.

Good luck
J

@Abe123

I love your response. Can I get your private messaging details?

@Vakil

Hi Vakil,

What's your private messaging details pls?

@Abe123

@Abe123

Hi Abe, great input thank you. Is the low cost of living really worth it?

Can affordability justify the everyday"eye-sore" scenes of poverty. I am specifically referring to desperate beggars, dirty streets, chaotic and risky behaviors as well as tragic poverty that is impossible to not witness even if you live in the most luxurious part of town.

I am only asking because I am moroccan and have lived abroad for 15 years now between the Us and Australia . I have a fantasy of coming back and living / investing in my country in a riad just like my peers but I change my mind everytime I visit Morocco.

Your input is helpful.

I think everything was said by Abe123 - the only addition I might add relates to the cost of living.

Yes - Morocco's cost of living is a fraction of London's or NY, but there is a cost to this (the other side of the coin). If you have kids, then you'll find that schooling isn't great (I am talking about international schools and not public ones). This was the major 'surprise' that we discovered when moving to Morocco (I spare you the details, but the level isn't there - most schools are run like a profit making companies - charge incredible fees and provide poor services). There is also the  current crisis - the gap between the Haves and the Have Nots (for lack of a better word), has never that big. The number of beggars has increased five folds (I live in a remote village and we've never had people knocking on our doors - now it's almost a daily occurrence (usually two or three women with their kids). Of course you can insulate yourself from all this, by mingling only in Expat circles (usually Europeans)  - but what's the point moving from Europe?

Lastly - the health service isn't up to scratch - even private clinics (there are there to bleed you to death - literally and figuratively! I had a worker doing some repairs work at my place - on his first day, he complained of have fever (he's an honest guy and there was no reason for him to make things up) - I decided to take him to a private clinic (they made me regret that decision - they run all kind of test, only to tell me that he has AIDS (no kidding!) and that he'll soon die, if they don't perform additional tests, etc. I am not a gullible person, but that scared the hell out of me (also I didn't want to take the risk) ....I decided to pay for the additional test.....cut a long story short - I left the clinic at 4am, with an empty wallet (I dropped the guy in a public hospital as I didn't have sufficient funds to keep him in the clinic. I went back to check on him the same day (after I returned home to get some rest) and he was fine (he just stayed too long under the sun...).

Anyway, this is not to discourage anyone from moving to Morocco - I guess that if you don't have kids and can afford frequent visits to your home country, for medical check-ups, etc...and you don't mind mingling only in the Expats circles - then Morocco is fine, I guess.

@Abe123
@Abe123


Hi Abe, great input thank you. Is the low cost of living really worth it?

Can affordability justify the everyday"eye-sore" scenes of poverty. I am specifically referring to desperate beggars, dirty streets, chaotic and risky behaviors as well as tragic poverty that is impossible to not witness even if you live in the most luxurious part of town.
I am only asking because I am moroccan and have lived abroad for 15 years now between the Us and Australia . I have a fantasy of coming back and living / investing in my country in a riad just like my peers but I change my mind everytime I visit Morocco.
Your input is helpful.
@einstat; I've lived in Singapore (the cleanest city in the universe), Santa Monica and Manhattan.

Yes, it's worth to keep a place in Morocco as long as you live in the rather posh or super posh neighbourhood (Grand Montaigne or Merçhane in Tangier; Gueliz in Marrakech; and the Dunes Quartier facing the promenade in Essaouira) - Avoid Agadir - too many poor French expats trying to live large, Sidi Kaouki, for same reason, and Fez - it's crime ridden - or anywhere in the Medina in Tangier. Rabat is OK but it's too sleepy.

My favorite city in the entire Morocco is Tangier as one can have breakfast in one's home, catch a ferry for lunch in Tarifa, and be home for early dinner or supper in any place in Tangier. Also, the TGV really changed the way we travel internationally as now we can avoid the totally confusing and convoluted Madrid Airport whenever we need to go to USS / New York.

We use the small international airport in Tangier to hop on small cities in Europe and take the TGV (from Tangier) to Casablanca whenever we need to go to New York / Washington / Asia.

My second favourite city is Essaouira - it's calm but only 2.5 hours by cab or bus to Marrakech, the center of entertainment (it's basically Miami wearing Kaftan, so desperately touristic). It's a nice place to visit but not to live throughout the year. People like the Medina in Marrakech. I never understand why. The mythical status (YSL and those Euro trash hanger ons) are simply gone. And we just have tourists, like Time Squares in Manhattan; A place that we New Yorkers avoid at all cost. Things only work to one's advantage when one keeps a large (and costly to maintained) Riad or Dar, with a large enough garden with a pool, a necessity in July and August in Marrakech. Also, what's the positive aspect of a city that depends 100% on tourism? Any big city needs to diversified.

Yes, we do see lots of beggars, everywhere in Morocco. But we do so in Manhattan, even in Soho, the meat-packing district or Upper East Side. The streets in Tangier are definitely cleaner than ones in Manhattan, and the area where I keep a residence - Mershane - is being cleaned 3X a day in the Summer and 2X a day in the Winter, simply because it's within 50 meter radius of the Royal Palace. The eldest of the King's sister - Lalla Meryem - keeps a house there, too. She likes to walks alone in the morning whenever she is in Tangier. In Le Grand Montaigne (J'bel Khebir?) It's even better; The grass and trees were tended just like in Bell Air, Los Angeles.

The safest city in the entire Morocco is Tangier, followed by Marrakech, then Essaouira / Rabat.

The British and American expats naturally have the best properties and frequent the best places in the north, but it doesn't mean one must hang out with them (us) 24/7 to have a enjoyable life. They tend to be of a certain age group (over 65), and things can get tedious. If you are young(er) but already semi retired like me, we have other groups that always include the locals. Activities evolve around sport, movies, philharmonic concerts, gallery exhibitions, trying out new eateries and long lunches by the beaches along the Mediterranean or the Atlantic between May and October. We entertain inside our homes between November and April, if we stay in Morocco. The French expats in Tangier have their own group. They tend to be even older than the Brits and Americans. On a side note, we the younger Americans tend to drink very little compared to the old Brits and the French. For this specific reason only we often get together without involving the older generation of expats.

Since you are a Moroccan (@einstat), I have no doubts you'll enjoy living here. If not throughout the year at least 50-60% of the time. I was born in the US, lived 5 years in Singapore, 10 years in Los Angeles, 25 years in Manhattan, and feel very much at home in Merçhane (Tangier), Gueliz (Marrakech) and Les Dunes (Essaouira). And where else can you transfer your assets to your descendants tax free?

@Vakil Hi Arif,

I am also interested in investing in rental property/half rental house residential for myself. I am wondering what I could get for 100,000 USD? Could I get some thing for that amount where I could reside and also make an income? And if so, what type of monthly income could I anticipate? If you have any idea, I would so appreciate your expertise and opinion. Thank you so much!

sincerely, Tami

@Tami Poostpasand

Let's be realistic Tami. $100K will get you no Riad in the big cities in Morocco. A hole in the ground, close to Jmaa Al-Fna, maybe.

If you just want to live in Morocco using your pension; $100K will get you a two-bedroom in Gueliz neighborhood of Marrakech including 25% renovation cost, and an extra 10-30K in a Moroccan bank that you can use as a guarantee to apply for a Permanent Residency (assuming you hold European, UK or US Passport).

There are only two things that are cheap / more affordable in Morocco compared to Europe: Cost of Living and Taxes (property + habitation).

Prices of good properties are comparable to Spain, Sicily and Naples for the most part. —— Let's emphasize on “Good Properties”. Not a decaying and delapidated structure in dangerous neighborhood that you need to tear down completely once you spend $80K-$100K ——— I am sorry to rain on your parade. ——- Several contributors here are simply Moroccans (some with dual citizenships) realtors masquerading as “concerned citizens”. Not me. I keep three very good properties in three cities in Morocco: Tangier + Marrakech + Essaouira. I know exactly the complexities of getting good properties in desirable areas in Morocco. There is no ulterior motives in my post other than presenting reality to other foreigners. . 

Great information - we are actively looking to buy a Riad in Morocco - we are property investors and experienced with all types of tenants as well as Air B&B type rentals.  Thanks for all the interesting input - Interested to know more about residency and what this gives you if you have it.

@Abe123  Hi Abe I have been following this link with interest.

I am seriously considering buying in Marrakesh I know we all mention riads.  I have viewed a few and am pay off by how much real estate agents charge ???

my budget is probably around €200k.  It would be cash and I don't need to make a fortune but would like to make money am guessing Airbnb. 

i gave researches the legal side extensively.  My partner is Moroccan and he would run it with me which obviously helps with language barriers.

I would appreciate your honest opinion as it does concern me some of the comments you have made.  I would like to offer more than just accommodation but offer guests a real experience including taking them on tours offering cooking experiences etc

I would really appreciate any honest advice you can give

@Vakil salam Arif. I am from the UK. We are relocating to marrakech in September. I got some investors and a group of people looking to relocate as well. Anyhow, let's connect privately.