All EOS blogs All Spain blogs  Start your own blog Start your own blog 

Spanish Eyes, English Words

A blended blog - Spanish life and culture meets English freelancer who often gets mistaken for Spanish senora. It's the eyes that do it, rather than the command of the language. Anything can and probably will happen here.

Renting or buying - which is best?
02 March 2013 @ 23:10

At the moment, it's a buyer's market in Spain. Prices are probably as low as they're likely to go, and people desperate to sell are throwing in extras like a car with the property, or membership to the local golf club. That said, it may not be in your best interests to buy, so how do you decide what to do? Here's a breakdown of the plus points for buying and renting in Spain in 2013.

Buying

For some people, buying is the only way to go. They want something to call their own, and to pass on to their heirs when the time comes. You should considet buying in Spain if you have liquid assets and therefore will not need a mortgage or any other sort of finance from an outside agent to buy a property.

At the moment, it's possible to buy any type of property for around half the price in Euros you would have paid five years ago. Also, there are so many properties on the market you can probably broker a deal to get the place you want for the price you're prepared to pay.

Even if you don't intend to live in your property or rent it out, you're buying at the bottom of the market, and interest on savings is very low. If you can hold out until prices rise - which inevitably they will - you'll realise a much better return on your investment by putting your capital in bricks and mortar.

Renting

Because there are so many properties on the market, and prices are low, many owners are looking at long term lets to keep up the cash flow until the property market gains ground. There are good deals to be had, and long term renters can apply to become permanent residents and enjoy all the benefits that come with that status.

Renting is a good option if you're not sure which area you want to settle in, or if you need to sell a property in another country before committing to buying in Spain. If you're renting, you're flexible - if you don't want to settle in a particular area, or your circumstances change, all you need to do is give notice as per your rental agreement and you're free to move on.

Maybe it's not something you want to think about, but what happens if your partner dies or becomes seriously ill? It's not a problem if you intend to stay in Spain, but if you need the support of your family, or want to return to your home country, it's much easier to do so if you're renting. You don't have capital tied up in Spain, and you don't need to stay to oversee the sale of your property. And it's one less problem to cope with at a very stressful time in your life.

If you're not working in Spain - maybe you've decided to retire here - renting means you have no personal tax liabilities to sort out, so you don't have to pay an abogado to sort out your fiscal affairs. It can be much more simple to rent rather than to buy. And if you're in your 70s when you move here, it may make more financial sense to invest the proceeds from the sale of  your property in your home country and rent in Spain. Renting is not such an attractive option for a young family with school age children who may be looking at 10 - 15 years before they can consider a move.

When it comes down to it, you have to do what is best for you. We never considered renting, because we didn't realise how simple it could be, as opposed to buying a property. Although we're delighted with our garden apartment, I think if we'd have been better informed, we may have chosen to rent rather than buy. Tony - my husband - was 74 when we sold our house in the UK, so renting may have been better, particularly as we bought at the top of the market. Still, as we're not looking to sell, it doesn't really matter what the market is doing, does it?

 

 



Like 0




5 Comments


David Rowe Spain said:
04 March 2013 @ 06:25

I have lived here for 15 years and have been renting all that time, when the property market was at its peak i had lots of people telling me i was just paying dead money and i should get on the ladder. Well i am glad i did not buy. I can rent a 2 bed apartment on a development for 450 euros per month, the same apartments were being sold at 325,000. they are now for sale from the bank who repossessed them at 130,000. Community fees on the development went to 250 euros per month but as a renter not my problem, basura & ibi again not my problem, at then end of the year if you get bored move! if you need to reduce your outgoings find a cheaper apartment! if you have a mortgage you do not have these options.


Sandra Piddock said:
04 March 2013 @ 08:11

David, it sounds like you have the ideal solution - especially with community fees at such a high level. We pay less than 400 Euro a year in Algorfa, and the IBI is only just over 200, so that's not bad at all.

I sometimes wish we'd rented, although we love our garden apartment. The trouble is, if we get to a stage where we need to be in walking distance of shops and other amenities, we're stuck until we can sell this.

When we first came here, we never even considered renting - it's the British mentality of needing to own your 'castle,' I suppose. Now we'd definitley rent. It's affordable, and much more flexible.


Lizzie said:
05 March 2013 @ 12:50

SHOUTING OUT LOUD PLEASE PEOPLE, RENT FIRST!!!

Don't get hurt by buying blindly just because you've watched 'A Place in the Sun'.

Listen to those of us who live with the punched in the stomach feeling day and night....for more than six blooming years due to corrupt banks etc. in Spain. I wish, wish, wish that we didn't have to send 500 euros per month back to Spain to pay a mortgage on a worthless flat which we HATE. My husband is Spanish and it's home town. The local Spanish conned one of their own and they did a runner. There is no comeback as where is the guy? We have 25 years to pay on a mortgage. I cry daily at the hopelessness of it all. We want to hand the keys back but we can't as my husband is not a latino immigrant....he's a local and they've got him cornered. Pay or else!

I wish we had 500 euros to spend on our children, to save for their futures because ours have been completely STUFFED thanks to buying in Spain. For my husband to buy in his home town and to suffer so much is criminal!

Don't buy in Spain until you know every single word on every single piece of paper and ignore the 'no pasa nada' because yes it blooming does matter!!!! Rent and you could maybe loose your deposit. Heck, I wish to god we'd only lost a rental deposit!!! Don't trust anyone in a suit either! nor in jeans, shorts or any other clothes...don't trust anyone!

Rent at least for a summer and winter before even considering buying. Then ignore any dodgy agent or local 'friends' who want to offload their mistakes onto you.

Only someone with money to throw away would buy in Spain now. Check out the Spanish banks repos and throw away 20k if you really have to buy!


david rowe said:
05 March 2013 @ 20:07

I was talking to a spanish friend today who told me to start looking at the prices of some of the apartments in the center of Fuengirola, what a shock, as my wife speaks such awful English we speak SPanish at home as a family so living in a Spanish area is not a problem for us. My wife has found around 8 3 bed apartments for sale under 40k! direct from banks who have repossessed Now i am thinking is it time after 15 years to look at buying. They are in need of renovation but hey ho. ummm how a few days can change the way you feel.


Sandra Piddock said:
05 March 2013 @ 20:25

@ Dave: And they say it's only women who change their minds! Still, I'm all for equal opportunities, so feel free.

To be honest, if we had the money, I would buy another property now, because I think it's a better investment than anything else - particularly if you can pick up a bank repossession. Maybe I'd better check my Euromillions ticket!


Only registered users can comment on this blog post. Please Sign In or Register now.




 

This site uses cookies. By continuing to browse you are agreeing to our use of cookies. More information here. x