Is It Better To Buy or Rent Property in Spain ??

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17 Jul 2011 00:00 by Jon07 Star rating in Sydney. 84 posts Send private message

What are the pros & cons of buying as opposed to renting based on a likely 5 - 10 year stay i.e. economically, practically, emotionally etc.

Interested to hear from people who have lived there for a while.

Jon





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17 Jul 2011 12:51 by Sanchez1 Star rating. 853 posts Send private message

17 Jul 2011 14:53 by manorpark Star rating. 165 posts Send private message

manorpark´s avatar

I would favour renting rather than buying but then I am biased as buying in Spain has been one of my biggest regrets !

There are so many properties available to rent and very cheaply too. If you really want to buy I would advise renting first. The property prices are forecast to drop even further so it may be best to wait a while.

Make sure you do some thorough research into buying, be aware of what a Spanish mortgage entails ( it is a personal loan, not a loan against the property ) and make sure you can trust any solicitor or bank you deal with by getting personal recommendations not those linked to developers or property companies. 

If you buy where community fees are payable check that all residents are paying the fees otherwise you could be one of the few paying exorbitant community charges to cover maintenance costs.

Another advantage of renting is that you can get a feel for the area, decide if you like the neighbourhood and more importantly find out what the neighbours are like !

Buying a property is the simple part but selling your property could take years and due to the state of the Spanish market and the glut of property available.

Good luck in whatever you decide to do.





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17 Jul 2011 15:40 by Jon07 Star rating in Sydney. 84 posts Send private message

Hi Manorpark,

Very much appreciate your practical/incisive feedback.

How do you see the market going over the next year or 2 (tough question) ??

Thanks again,

Jon

 

 





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20 Jul 2011 13:44 by mariadecastro Star rating in Algeciras (Cadiz). 9344 posts Send private message

Legal Questions? Speak to Maria Direct

 Property prices still need to get lower.

Banks are collapsing the market ( just give mortgage on own properties) presently but that will change soon.



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20 Jul 2011 16:07 by Jon07 Star rating in Sydney. 84 posts Send private message

How much lower & over what period ??

Cheers,

Jon

 





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20 Jul 2011 18:18 by Sanchez1 Star rating. 853 posts Send private message

20 Jul 2011 19:32 by celtic Star rating. 103 posts Send private message

Just to be controversial , 10 years of paying rent to someone else with nothing left to show for it also doesn't sound too appealing.



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20 Jul 2011 21:45 by Patty_1 Star rating in Hertfordshire. UK. .... 1062 posts Send private message

Yes Celtic,   Have to agree with that.  It is just dead money paying of someone else's mortgage.

Have to say we have no regret buying but we paid stage payments and could see on line the apartments going up so you knew it was happening.  I know I would have stopped payments if that was not happening.

If I was looking at buying or renting now I would certainly buy.  But that is just my opinion.

Patricia



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20 Jul 2011 21:56 by rod Star rating in Uk and Spain. 469 posts Send private message

Personally I have never regreted buying my  Spanish Property it makes me a very good return in rental income and if I had placed that money in a bank or a share portfolio it would have been receiving very little interest and most probably lost some of my capital also I have visited on at least 20 occasions enjoying every minute YOU ONLY LIVE ONCE.

The FTSE is lower now than in 1999 as are most world indices apart from the very high risk stuff ie BRIC ,house prices are still at least doubled in the UK and more in Spain over the same term.

I have a succesful BUY TO LET portfolio and personally would never rent long term its dead money

But on a 10 yr view i would say buy now, on a five year view its 50/50 personal preferences considered.

Regards Rod

 

 





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20 Jul 2011 21:57 by manorpark Star rating. 165 posts Send private message

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50 % over the next decade !! How depressing ! At this rate my property will be worth what we paid in deposit !





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20 Jul 2011 22:10 by rod Star rating in Uk and Spain. 469 posts Send private message

I would not agree with the 50% comment , that has never ever happend inPOST WAR YEARS and it is extremely unlikely to.

Spain has for a long time been very attractive and easily accesible to over a few hundred million people in and around  Europe as a holiday destination and place to live this is what drives prices up DEMAND

Invest for the long term

Rod

 

 


 



This message was last edited by rod on 20/07/2011.



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20 Jul 2011 22:49 by Patty_1 Star rating in Hertfordshire. UK. .... 1062 posts Send private message

We do not rent our apartment out because we stay 5-6 months of the year there.  So over the last 6 years we have certainly had our money's worth out of the apartment.  If your work out what it would have cost us to rent for that amount of time it would be quite significant. 

We love going back there and it is something to look forward to especially with the weather we are having in the UK at the moment. 

As I have said before we never bought it to make money and at the time we bought the rate was 1.59 so I do not think we would have been to out of pocket anyway. (wished them rates would come back) .

As I said if you have the finances to buy then I would do so.

Patricia

 



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21 Jul 2011 00:08 by Sanchez1 Star rating. 853 posts Send private message

Celtic:

Just to be controversial , 10 years of paying rent to someone else with nothing left to show for it also doesn't sound too appealing.

We've been renting our place in Spain now for just over 2 years, and have spent aproximately 13,000 euros in rent.  Over that time, the value of the property has lost at least 50,000 euros.  So we have clearly been correct to rent and not buy.  Prices are still sliding as well.

I'm perfectly happy renting in Spain.  It gives me the flexibility to move elsewhere in Spain or even leave Spain altogether if things got really bad.  I still have 30 years left of working life, so I may need to move around for work.  I'd hate to be tied to one place.

Pat and Roy:

Yes Celtic,   Have to agree with that.  It is just dead money paying of someone else's mortgage.

The last I heard, my landlord's mortgage was 750 euros per month, and that was before the recent rise in the euribor.  We pay 500 euros rent per month, and even that seems too much these days.  So only paying part of someone else's mortgage

 



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21 Jul 2011 00:19 by Sanchez1 Star rating. 853 posts Send private message

rod:

I would not agree with the 50% comment , that has never ever happend inPOST WAR YEARS and it is extremely unlikely to.

Not sure if you are talking just about Spain here.  House prices fell 60-70% in Japan during the 1990s (Japan's lost decade) and are still well below their 1990 peak.  Some economists are saying that this will be Spain's lost decade...



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21 Jul 2011 03:05 by Patty_1 Star rating in Hertfordshire. UK. .... 1062 posts Send private message

 

Sanchez so you are paying part of someone's mortgage. But that is fine if as you say gives you the flexability to move around which I can understand.   It suits you that is great.

But we only have a small apartment and did not pay a lot for it so we are content with what we have.

We can all speculate about how things will pan out 50% or whatever.  But if it is right for you then just do it.  Life is to short to keep pondering, we do not know what is round the corner as the longer I live I find out.    

Just make sure you have read some of the posts of people that have lost money and trying to claw it back.

At the end of the day it is up to the individual.

Patricia      



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21 Jul 2011 10:55 by Jon07 Star rating in Sydney. 84 posts Send private message

Guys,

Some great feedback.  

Concur with Rod that 5 years may be tipping point re buy/rent equation i.e. best to apply caution if you are likely to dispose within 5 years. In any case, the buy/sell expenses (about 16%) alone could equate to about 4 years rental costs - plus renting outgoings are substantially less than ownership.  My "uninformed" opinion is that the market could fall a further 15% - 25% & hit bottom in 12 - 18 months without any substantial lift off for at least 5 years.

Has anyone rented long term say 2 -3 years ?? Presumably, this would entail 11 months initially with options to renew ??

Jon

 

 





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21 Jul 2011 11:05 by Kenny Ackers Star rating. 42 posts Send private message

Kenny Ackers´s avatar

Rent for 12 months to 2 years.

Then you will know whether Spain is for you. you will only have shelled around 10,000 euro. ( plus utility bills )

Renting gives you total flexiblity - all the associated problems stay with the owner ( rates maintenance etc )

After that period you will know where prices will be, then you can make the decision.

At this moment in time there are big issues in the eurozone - this needs resolving. You would be a bit naive to buy now with the economic situation as it is.

 

 





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21 Jul 2011 12:02 by campana Star rating in Marbella. 474 posts Send private message

campana´s avatar

Agree with what Kenny says.  Rent for a short period to find out if the area suits you, while giving you time to scout at leisure for somewhere suitable to buy.

 

Patricia





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21 Jul 2011 13:31 by Sanchez1 Star rating. 853 posts Send private message

Pat and Roy:

Just make sure you have read some of the posts of people that have lost money and trying to claw it back.

I follow these threads quite closely on here and the way people have been treated by corrupt developers/lawyers/town halls and Spain's third world legal system is another reason why I won't be buying in Spain any time soon.



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Read my blog: Spain Money Saving Tips and Offers 

Use TransferWise to send money abroad. A lot cheaper than the bank and other online currency exchanges!.

 

 




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