Advice on Buying a property

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26 Mar 2018 6:16 PM by theline Star rating. 84 posts Send private message

I am planning to buy a house in Spain with my partner. We've found somewhere we really like the look of, and would really like to make an offer. 

However, before we do so, we'd like to cover ourselves as much as possible (given the number of horror stories we've read).

My partner thinks that the (Spanish) bank will do a full survey as part of the mortgage agreement (which we'll have to pay several hundred euros for), however with this amount of money I'd need to be 100% sure. 

Another thing I noticed after taking a look at the catastro website, is it although the house and the land themselves are there and all officially registered (which is the main thing), there is a very small outhouse/shed (of a few square meters) which looks like it hasn't been registered properly. Personally I'd be happy to just knock it down if anyone raised an issue with it, but obviously I'm worried that if we bought it we could also be liable for some kind of hefty fine somewhere down the line for illegal construction.





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26 Mar 2018 9:24 PM by Kavanagh Star rating in Oil Drum Lane Newcas.... 1316 posts Send private message

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Had you thought about going to see a Lawyer.



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27 Mar 2018 1:06 PM by windtalker Star rating. 1934 posts Send private message

Rent before you buy... don't look at buying as a investment....the likelihood of loosing money when you try to  sell on is extremely high.





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27 Mar 2018 5:54 PM by acer Star rating. 1529 posts Send private message

As virtually always "rent before you buy" is the safe approach, as stated by Windtalker - the market has been bouncing along the bottom for 10 years or so and there's no clear reason to think that'll change.  So no rush.

If you buy an older property in an established area, the risks are modest.  Buying off-plan, or a property in the sticks is usually where problems occur.

When you decide to make your purchase don't rely on the bank, a solicitor, the estate agent, the town hall, or one any person.  Make sure you retain control and read and understand every document and part of the process. 

Kavanagh's advice is not good.  Most solicitors work in a different way in Spain to what you might expect - in short they don't do many of the checks.  If you are unsure you can do  a lot worse than downloading the Law Society template to use as a checklist, it's all the same process. 

But be aware, solicitors in Spain do not consider themselves responsible, nor does the "duty of care" expectation, or legal responsibility apply.  I actually had one solicitor of a firm in Mazarron tell me that he admitted he had cocked up but I was a foreigner and no hope of any recourse against him.

All instructions to solicitors should be in writing, often all communications from them is verbal, which of course can be dangerous.  Don't ever let your selection of a solicitor be influenced by the selling agent.  Always ensure your appointed solicitor checks for any debts on the property, which you will otherwise inherit.  Again all this should be in writing - I found that despite requests my solicitor did not do so, so I was obliged to confirm their verbal comments back to them!

Don't be too put off, but take it slowly, remain suspicious, don't trust anyone and you'll be fine.

 

 



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27 Mar 2018 6:44 PM by Roberto Star rating in Torremolinos. 4552 posts Send private message

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Excellent advice from Acer. Kavanagh's advice (to employ a lawyer) is not bad per se, as you should employ one of your own choosing (not the agent's, not the bank's) anyway if you're unfamiliar with the whole process, but as Acer says, they work differently to British lawyers: I have always said that Spanish lawyers will generally answer all your questions - but will not tell you what questions you should be asking. So as Acer says, proceed with caution & trust nobody. If you're unsure about this house for any reason - walk away. There will be others.



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27 Mar 2018 8:26 PM by Kavanagh Star rating in Oil Drum Lane Newcas.... 1316 posts Send private message

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Acer, I agree that my advice is not always good, but at times it is the only sensible advice in the circumstances to be given. Not being able to trust the honesty, reliability and competency of a Spanish qualified lawyer is true and only demonstrates the cowboy land Spain is. Spanish lawyers treat the whole justice system and their clients as a meal ticket, but at times you have no alternative, or do you think new members would be better advised on EOS of what action to take in complicated legal matters. I doubt EOS has professional indemnity insurance covering some of the nonsense posted.



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27 Mar 2018 11:53 PM by hugh_man Star rating in Kent/Roda . 1593 posts Send private message

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” 

Don't be too put off, but take it slowly, remain suspicious, don't trust anyone and you'll be fine.

Best advice on anything to do with Spain.

Yes asl a lawyer but make sure you ask the questions you want answers to, there is no responsibility to check anything not asked.





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02 Jan 2023 7:04 AM by scottdunn Star rating in United States. 1 posts Send private message

** EDITED - Against forum rules **
This message was last edited by eos_moderators on 1/2/2023 11:53:00 AM.

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04 Jan 2023 9:35 AM by Catesby Star rating. 7 posts Send private message

Hi, I have posted on here before with the same concerns about buying in Spain.  Many people do it and have the reservations or pesimism I have experienced on these chats.  Its good to get both sides of the story but very hard to pursue a decision. I was told last time that investing in Spain is a bad idea.  But I thought afterwards this must depend on what you mean by 'investment'  I would agree that buying and selling in Spain as I do here in England (which is highly profitable of course) is not a good investment in spain but, I think if you intend to keep your property then from what I have experienced in the many years I've been going to stay in villas in Spain, the rents are about 800 euros a week peak time and i suppose 400 non-peak (ie xmas), they earn good money, I'm just wondering how much tax and expenses come out of that, is it really a bad investment if you aren't buying and selling property ?  I wouldn't be living there either - just the 90 days a year at most and the rest letting out.  My main concern is the pool which is a must for letting but is a drain on resources - thoughts ?





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04 Jan 2023 10:00 AM by acer Star rating. 1529 posts Send private message

Hello Catesby,

I think you are right to question the use of the word "investment" when used for a property purchase in Spain - "sacrifice" might be better!

Also newcomers often seem to assume that they can offset their expenditure by letting out their place - it's not that easy and it's better to assume that any lettings will be zero.  It's a lot of hassle and admin, expense and risk.

Spain is still largely perceived as a place to visit in the summer months (when you want to use the place!).  A lot of properties will require upkeep during the long empty winter months.

Very few folk make a profit on their Spanish purchases - the expression "Money Pit" is usually far more appropriate - but personally I have no regrets in doing so, for most of the last 40 years.

 



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04 Jan 2023 12:09 PM by windtalker Star rating. 1934 posts Send private message

Catsby ...I have owned properties in Spain for the past 17 years...the only properties you would get €800 per week for in peak season are large detached villa's  with a pool...so you would be looking at a outlay of €350,000 ++++ to buy in a desirable  area you would need to maintain the pool and the property to a high standard... you will need a management company to source your holiday renter's they usually charge  approximately 20% finders fees per rental you will  need a Touristca license  / liability insurance  / pay income tax of 24 % on any income you will also needa Spanish accountant..I owned a 3 bed 3 bathroom Detached villa with  its own pool that  I sold back last year due to the high maintenance cost involved in running the swimming pool this came to over €2,000 per year including the water / electricity / chemicals and a once per week pool clean....which is expensive when you take into consideration the pool can only be use approximately 4 months of the year your management company will also charge you for cleaning after you renter's have vacated this will come to around €100 per hand over..I know 2 people that are in the holiday home rental game and the only way they  can make it work is by sourcing the renter's and doing all the maintenance themselves..due to the fact that Spanish holiday home rental companies can't be trusted to hand over all the rental proceeds  it's common for these companies too not inform you of all the rentals and keep the proceeds themselves..if it was as easy as buying a a property and sitting back and counting the money thats rolling in we would all be doing it ..Me included as i own a number  of rental properties in the UK...Good  luck  you have been warned. 

 

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This message was last edited by windtalker on 1/4/2023.



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04 Jan 2023 5:36 PM by PennysLane Star rating. 1 posts Send private message

Hi I am looking into buying a property in Spain to let out. I have done this in the UK for many years but property prices are becoming too high to make it viable and new legislation and tax changes are making life as a UK landlord more and more unattractive.

I am wondering what the holiday letting / rental market is like in Spain. Is it easy to let out property in Spain either through Airbnb or local agents? Also is the market confined to the tourism season ie July & August or is it Spring & Summer?

If there are any landlords in Spain can give me an insight into the letting market it would be much appreciated. 





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04 Jan 2023 6:15 PM by Kavanagh Star rating in Oil Drum Lane Newcas.... 1316 posts Send private message

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Windtalker has already explained quite well.

High demand is July/August but there is still some demand in low season. To be successful you will need a relatively high demand property at a competitive price. You will need to be in Spain hands on to manage the property; remote management is doomed to failure due to costs and spiv agents/labour. The main platforms are TripAdivsor/HolidayLettings. Bookiply, Travelnest, Booking.com, Airbnb, ATRAVEO, TUIvillas.

Non residents will be taxed on every penny they receive without any personal tax allowances or maintenance/orverhead costs.



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04 Jan 2023 10:44 PM by Catesby Star rating. 7 posts Send private message

@acer, good points.  I am surprised you would treat lettings as zero, you must feel that there isn't much point in renting out especially as I wouldn't be resident.  But you have invested in Spain for 40 years !  I am  was only looking to buy once, not like here where I am happy to buy-sell frequently, and then use rent to give us some extra money along with the rent here.

@ windtalke - I have had this reposnse before about the higher rents - I have rented in Spain during the holiday period in june usually so not even peak period and the properties rent for at least 800 euros a week from what i can remember.These are in the provinces of cordoba and seville and sometimes malaga - inland though.  Yes they are 2-4 bed villas with gorgeous views and a pool.  In thos areas such as Iznajar which is in the south of the cordoba province the prices for such villas which we have viewed range from approx 175 euros to 275, some go up to 300k but they are absolute beauties.  The ones you talk about will be on the coast which I have not interest in.  I am only interested in rural andalucia.  Ones on the coast or with a coast view cost more yes in the region of 300-400k.

some good numbers info on tax, management company etc - very useful.

same for Kavanagh.

 

to summarise - you have all succeded in pushing the needle over from 'buy' to 'not buy' ! especially for letting out purposes, I suppose if I don't let out that gives a lot more options.  i think becuase of the area I want to buy in and the fact that I don't want to live there permanently and would need someone to manage the property, this kind of outweighs the positves which would be a source of income, investing in something somewhere whilst interest rates are high here, the cold weather here in winter which does me in being half spanish etc.





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05 Jan 2023 8:34 AM by acer Star rating. 1529 posts Send private message

Thanks for yours Catesby.  It's very much personal choice, but having examined the potential costs against the realistic revenue it really wasn't worth the hassle - and there is lots, including now licensing by the local Town Hall.

Yes "zero" can be the word.  A lot of would be renters throw in the towel after one or two seasons after being disappointed by the experience.  The market is different to renting under an AST in the UK.  Lucrative long term lets are few and far between - you are reliant on one or two week bookings and building up a customer base of recommendations and returns, so you have to be good.

In the UK, paricularly in the south, you only need to break even to be on a good chance of a long term financial gain, but not so in Spain in recent years.  Property prices seem likely to stay static for many years more.

So I prefer to spend my time in Spain enjoying the place rather than fannying around cleaning up after other folk!

But let us know how you get on.



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05 Jan 2023 10:48 AM by baz1946 Star rating. 2328 posts Send private message

I did own 3 houses in Spain, sold one a short while ago, keep one for personal use, one for renting to friends and family only, the one I sold I tried renting out, going back a good few years here, and to put it bluntly when I saw who wanted to rent, most I wouldnt rent them a dog kennel in case they messed that up, got a long time family who were great and bought it of me.

I think people get confused with renting in Spain to renting in say England, goes without saying here you can keep an eye on whats happening quick enough, and of course in the UK prices rise so even if you made a little on renting you do stand a good chance of making a few quid on any increase.

Personally I wouldnt buy a house in Spain with the view of making a killing anymore, but of course get a property very...Very cheap,  and possibley you might win a little, but then you might win the lottery also.





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06 Jan 2023 8:18 AM by acer Star rating. 1529 posts Send private message

It's not difficult to take up refrences and "interview" prospective UK tenants to minimise the surprises - but impractical to follow this practice on a short term Spanish rental.

I also bought a flat in Spain for the sole purpose of renting it out but never did.  I never fancied short term rents, too much hassle and risk, but discovered the longer term rents available were very poor.   When Brexit came aong I sold it pdq - and glad I did as Covid would have cost me a lot.  Too much risk w/o any real chance of making a reasonable return.



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26 Jun 2023 1:02 PM by lorenagm Star rating in Barcelona. 1 posts Send private message

Hi!

As you mentioned buying property in Spain might be tricky, but it is a really good alternative to investment. According to research, Spain is the fourth most attractive country to invest in during 2023.

I'm trying to share a post about buying property in Spain that might be interesting to you, but I can't.

Hope you go through the process with ease and you manage to get a nice home. 

Best!

Lorena



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27 Jun 2023 2:42 PM by BrassaHomes Star rating in Moraira, Alicante, S.... 1 posts Send private message

Avoid viewing it solely as an investment and think about renting before purchasing. Because there is a potential for significant financial loss when attempting to sell the property in the future, it is essential to approach buying with caution. Renting gives you a chance to give the place a try and learn about the neighborhood, the property, and your preferences. You will have a better understanding of the market's dynamics, potential fluctuations, and any unforeseen circumstances that could affect your investment if you rent first. Before committing significant financial resources, it gives you the opportunity to make an informed decision and possibly protects you from future losses. Keep in mind that thorough research and thoughtful consideration can lead to a more secure and profitable real estate journey.



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27 Jun 2023 6:22 PM by acer Star rating. 1529 posts Send private message

I've heard the "taste & try...before you buy" advice a few times, but not convinced.  Perhaps if it was applied to the ACTUAL property you were considering, not just the area, it might make more sense.

For example, the neighbours you find you have are so important - it usually takes a while to find out what they're like!  A few years ago I had a couple who were loud and shouted at each other all the time - but thankfully left after a year!

I reckon the best approach is never buy anything without thorough general research, then check out the property itself in detail - physically and legals with a personally recommended solicitor and casually walking around including asking a few prospective neighbours, without saying you're thinking of buying there!   If you chat for 5 minutes or more you tend to get the truth and possibly more info than you want!



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