Buying the right property in SpainBuying the right property in Spain
We all know that location is important, but requirements differ according to the reason for the purchase. For someone who is using a property in Spain for investment purposes only, the criteria will be totally different from the person looking for a permanent home.
The most important points to establish from the beginning are:
1. The Location
2. The right type of property
3. The use of the property
For Investment Property
New developments, or 'off plan property' can take 2 to 3 years to complete, which means that they are constantly increasing in value during this time. Investors can sell on the property at any time before completion, thus making a profit without paying in full for the property. I have know people to buy knowing they do not have the money to complete on the property should they be unable to sell before completion. This is a big risk as there are no guarantees. Do your homework thoroughly, check out area plans with the local town hall to be sure that no tower blocks will be built in front of your new villa, or a sewage plant is not planned for the plot next door! Off plan property in Spain >>
For Rental Property
When buying a property in Spain to rent to holidaymakers, location is the most important consideration. Successful 'buy to rent' property depends on a variety of factors - distance from the beach, airport, shops, local entertainment, the style, standard of the property and facilities, the availability of a pool, are all key factors that will influence the success of your holiday letting business. Obviously, a town apartment in an inland area is unlikely to generate the same level of interest as a seaside villa with a private pool in a top holiday spot!
A country villa with an outside toilet and a water well a mile down the road may be ideal for your holiday home, but it is unlikely to be a holidaymakers dream property.
As rental agents, we are finding the trends for holiday makers have changed over the past few years. 3 years ago, anyone who owned an apartment in Spain could rent it for most of the holiday season. Not so today. The supply for holiday apartments completely outstrips demand and many are left empty during the peak season. Whereas, a holiday apartment near the beach used to be so popular, many are now opting for ‘out of the way’ country or mountain villas. In a general breakdown, the requirements for 2005 were as follows:
70% of holiday makers are looking for a private 3 bed villa with a pool.
20% for a 5 or 6 bed villa (It is cheaper for 2 families than booking two individual villas)
10% for 2 bed apartments.
There is now a huge demand for long term rentals (i.e. 11 months +), which differ from the above, as people renting are not looking for the holiday lifestyle. They may need a different type of property – storage space, outside space, convenient shopping facilities. It is not necessary to be close to the beach, but being able to walk to a local shop can be important if they have to do it on a regular basis. Long term renting is often dismissed by owners as rents can be pretty low, however they will provide a regular year round income, as opposed to the uncertainty of holiday rental income.
For Permanent Living
Buying a property for living permanently in Spain means you have to make serious choices on not only the type of property that will suit your needs, but whereabouts you want to live. Not only the area, but the type of area that it is. Do you want to live amongst the Spanish, the British – or a bit of both. There are many expat communities, especially on purpose built urbanisations for those that want a ‘home from home’ lifestyle but in a sunnier climate. Alternatively, do you want to live in the ‘real Spain’, adapting to the Spanish way of life and speaking the language?
Bearing in mind reselling and re-purchasing costs, a wrong decision could be costly. My advice in this situation would be to take a long term rental in the area in which you are considering buying (if you can get one – they are few and far between!), and making sure you know exactly what you are letting yourself in for. Living amongst the Spanish can be difficult if you are not prepared to learn the language, but living amongst other expats can also have its downside.
Buying a holiday home purely for yourself and your family is the easiest choice of all. With only two hours travelling time from the UK, even a long weekend isn’t out of the question. It can be anywhere as long as it suits your needs. A mountain villa, a rural retreat, a city pad, or a beach apartment – you have no-one’s needs to consider except your own. The only point to consider is that your holiday home may only be used for short periods of time and some properties will need more maintenance and security than others.
Choosing the ideal property in Spain can be exciting, but often difficult. It’s a big investment and you want to get it right. Once you have the basic criteria, talk to people, ask advice from local agents. I have heard stories from property owners who have been told that a particular property has ‘excellent rental potential’, however this often turns out not to be the case. If you are buying to let, talk to a local letting agency – they will offer impartial advice, after all they will not be getting a cut of the agents commission!