You have a wide selection of investment property in Spain. Consider the following factors while searching for property to invest in Spain. Check the size of the property, the number of rooms required. Always check the nearest health and social facilities available.
Developers in Spain are always looking for cash flow and hence offer property at sale prices. The plan is that you will need to deposit some initial amount and the rest can be arranged in stage payments. You can use this plan to your profit. Say the price of property rise before the completion of a project, you have a property worth more than you have paid for. You can also have your choice and say in the development of the exterior and interior of your house. The only concern is that you need to wait for a period of time before you get the property and you only get to know what you are got after the completion.
The cheapest property available is likely to be an apartment located in small communities and will probably be available in an unfinished state. These of course do not allow much privacy.
A detached villa should be your choice if you are seeking seclusion, but will come at more prices. If you are looking for Spanish experience you should be looking at town or village properties.
A Finca is a rural property, especially a large farm or ranch. Many fincas have a good deal of land and this may have fruit orchards or olive groves.
Once you have made a decision on the location and type of property to invest, you should now talk to the estate agent. Check whether the person concerned is registered and has a license. Please verify all claims made by the agents independently.
Any offers you make to invest in property should be made in writing and should contain the price, the payment plan and the currency. The completion date should be mentioned, taxation issues and details of what is included within the price you pay and what is not. It is done best if you do it with the help of a solicitor. Do not sign any documents in the absence of your solicitor.
When the offer is accepted, the solicitor generally checks the land registry and then goes on to make a contract deal including both parties. The public deeds (Escritura de Compraventa) are then signed before a Spanish notary. On completion the solicitor informs the local land register about the deed and the identity of the new owner is registered and ensure that the property cannot be sold a second time.
There are charges, which are required to be paid such as community fees, electricity, real estate tax, rubbish collection charges and water. The estate agent should be able to provide this information.
A mortgage application in Spain is relatively straightforward. The following original documents need to be shown, passport, if employed, the last three months payslips and if self employed, accounts of the last 3 years, an accountant's reference, and tax returns.
A further 10% of the agreed price will have to be found to cover additional fees that include: Legal fees of approximately 1%, Notary and Land Registry Fees of approximately 1%, Title Deed Tax of 0.5%. A Valia tax, payable on any increase in land value may be payable. On a new construction IVA tax is levied at 7%. It is charged at the full rate of 16% for purchases of land. Purchases of used property are subject to a transfer tax and this like the IVA comes in at 7%.
So these are the brief details, which you should be aware of before buying investment property in Spain.
For anyone with an investment property, now is not the time to be selling. After enjoying a period of growth, house prices are currently dropping amid concern of a credit crisis. However, those who can afford to hang on to their properties could see their investments serving them well in the future.
Areas of Yorkshire, Humber, London and the Midlands are the only places to have seen small property price growths but this is much reduced from last years figures. There has been a 13 per cent drop on the total amount of house sales in comparison to the previous year, across the country.
Mortgages are becoming increasingly difficult to get hold of. In fact, banks are beginning to turn away borrowers who are not already customers with them and turning down mortgage applications due to apparent lack of funds.
When you can get a mortgage, a good deal is even harder to come by with packages being withdrawn left, right and centre. This leaves many borrowers with no choice other than to take the banks standard rate mortgage, assuming they can get one, that is.
This situation has left many with no chance of getting on the property ladder and bringing about an influx of tenants and landlords. Like I said, for those with an investment property, things are looking up for you.
According to statistics, many more people are renting property than buying. This applies across the board, whether they be single professionals, couples or families. They all need your investment property.
Then, of course, you have the influx of immigrants who all need housing. Of the 200,000 immigrants arriving at our borders every year, all of them will need housing and virtually all of them will be in rented accommodation.
Thousands of homes are repossessed every day of the year and these unfortunate people will be looking for a home to rent. This is where your investment property becomes invaluable.
The UK has the highest proportion of single parents than throughout Europe and many will be looking for rented accommodation. Then we have the divorces where it is highly unlikely that both parties will be able to afford to buy another house. At least one member from each divorce will be looking for someone like you with an investment property.
Of course, it's not all about cashing in on other peoples misery. People have always rented property and it's only in the last fifty years or so that it has become fashionable for the average person to actually have a mortgage. Before that, you had the few landowners and property developers that would hold ownership of many investment properties and would rent these out to the masses.
Many people these days are unsure of where they want to settle. After all, the world is a much smaller and more accessible place these days. Many tenants will take time to travel, taking work experience in different areas and also taking up training and education in various parts of the country.
All these people are looking for someone like you with an investment property they can lease from you, so to give it up because finances are looking a little tight the world over would be ludicrous. These blips in the economy come and go all the time and if you can afford to ride it out, it would be wise.
Both Frank East & Catherine Harvey are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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