Most common problems when buying in Spain?

Hi, i'm a Journalism student and in the early stages of researching into the problems when buying abroad and would appreciate any help.
I've heard that some common problems that you should look out for is making sure you have the relevant planning permission and buying without a bank guarantee. What are other common problems that arise when buying in Spain?
If anyone has any experiences of any troubles they have experienced or are experiencing then i would be very grateful to hear them!
Ideally for my project I should have a case study of a person who has experienced trouble whilst buying abroad so if you could help me out it would be very much appreciated.

Hannah

Hello,

I think it would be true to say that most people who are purchasing off-plan apartments have really been taken for a ride in many ways and because they have relied upon the marketing agencies of these properties and put trust in them buyers are now finding out that all is not well with their purchases.

Many people have been taken on excursions by the marketing agency called (promotor) to vacany building lots where they have established a caravan and some flags denoting their company and where they have set up maps of the area and have designer brochures telling you all about the properties you can buy.

Next you are taken by coach to very upmarket places for lunch and you stay at an upmarket hotel.  (All paid for by you at discounted prices).  You are taken to see yacht clubs and upmarket shopping malls, and restaurants and basically sold the life-style.

From there you are taken back to the hotel where you stay and are high pressured into signing for an apartment but when you actually get back to reality you have a package of little information.  These are franchise operations and let the Buyer Beware of what he is buying. You will never see the agent again who sold you the apartment because he has already moved on with your deposit and out of the company!

The package has no dimensions of anything you are purchasing just architect drawings.There are no time lines, no guarantees, no decent contract which you can amend or add to to protect yourself.  Many people have been caught with these franchises and are paying dearly for them.

Firstly, the property doesn't take 13 months to complete it can take as long as five years! There is no way you can escape the contract except to lose your money.  The builder ties you up with legalities and being far from home you cannot contact him at all easily.  There are no costs put anywhere in any of the documents which you have which tell you what you will be paying to buy your property and a small property costs just under Euros 19,000 to buy.  You more or less pay the same again to sell it! 

All of these properties are Buy to Rent and when you look at the outlay you have and the bills you have before you rent out the only person who gains is the Promotor! For example. 

You buy and put down your deposit and then you have a small mortgage over 20 years which starts even though the final building isn't finished because you are pressured to purchase by your attorney in Spain who in turn is pushed by the Promotor.  So you have your mortgage in place and six months down the line you still cannot rent out because there is no water or electricity hook up, no garbage collection, nothing!  You furnish at Euros 14,000 but the furniture hasn't arrived and now you are six months into trying to get rental but the agent cannot rent out and doesn't advertise because the apartment is not ready yet.  Problems installing air conditioners.

Now the season for rental is passing by and rental income is slipping away.  You can only rent in a season 10-12 weeks at Euros 45 per day!  I worked out our own scenario which is:

Mortgage Euros 700 per month

Monthly fees for garbage collection, etc. Euros 100+

Electricity & Water monthly fees Euros 25

Property Insurance per month Euros 30

Insurance against damage and non rental payment per month

 Euros 30

Management Fees for Promotor is one month's rental, keyholding fee, monthly charges for maintaining building on your behalf. Euros 120+ Cleaning up after tenants, supplying car for renter another Euros 100 oh and the start up grocery pack which you purchase out of the rental too.

Total Euros 1,000+

Euros 12,000+ for the year

Rental Income for the 10-12 weeks = Euros 45x70 days if you are lucky  = 3,150

Deficit almost Euros 9,000 approx. 

The only person making money is Promotor and you get all the bills and hassle.

These are all approximate amounts but almost right but if you would like more information you can write me privately and I wlll be happy to share this information with you.

If you genuinely are interested in these stories you only have to look at the forums here to see what is going on.

C. Frayne

Oh, I also forgot to put in the 25% withholding tax which is deducted from your rent before you get it because you are non-resident in Spain.  Don't believe you will get that back without a hassle as it is taken at source on your behalf! 

Also forgot to mention all the maintenance once your tenants move out possibly another Euros 100 for repainting and fixing things!

C. Frayne

There are very many points to be careful about.

In fact, if you haven't already been in Spain for a couple of years its best to get help from somebody who has.

If you don't speak Spanish, get somebody to translate documents for you. If possible, get a lawyer to check documents to make sure there are no snags or hidden clauses.

Make sure the property is legal (ie, the person who is selling it to you actually owns it in the first place and has the permit to build there)

Try to find out something about the area before you buy. Google for it. Also go to the local bar and chat with some locals to see what's going on in terms of social activities, do they regret having moved there. Ask whether your agent has a good reputation locally. Identify other people who have brought through him and talk to them.

Also check with the Ayuntamiento that there are no plans to build a motorway through your garden.

Hi all,

I agree with many points mentioned in one of the threads but, everyone should do a bit of research before you put your money into anything like property,shares or whathever you think is a good investment, i dont understand how some people can risk their life saving without even having a look at where their are investing and not knowing even if they can afford it.

Everyone situation is different and you buy property for different reasons so if it doesnt work for you, you are one of the unluky ones because there are plenty people that bought in spain and they are quite happy.

I am spanish living in the uk for a few years and i always thougt of the english and other foreigners as very privilige to be able to buy propertys in the best areas in spain and enjoy the weather and the beer. Partly because of that now myself i am strugling to get a decent place for me to go back to and have to hear about all this people complaining about losing their big profits because of the credit crunch.

Is no good to be greedy.

Jon