So the burning question is now the time to buy investment property in Spain and if so what sort of Spanish property should I buy?
In this Blog I will give you five tips that hopefully will guide you in the right direction but first you really have to come to terms with what type of investor you really are, Are you a lifestyle investor who wants to buy Spanish retreat and make some rental income from it with the possibility of Capital growth or are you a real property investor who doesn’t want to use the property and is only interested in buying at rock bottom prices with high rental yields?
The answer to that question should radically effect what you invest in but the following should help you whichever category you fall into.
TIP 1, Location is Everything
The most obvious and best advice I could give any investor but it’s truly amazing how many people choose to buy a better property in a secondary location. Now if you’re going to live in the property full time I can understand that. However from an investment point of view prime location always holds its value better and is always easier to sell should you need to. In fact Location should be the cornerstone of your whole investment strategy. Much better to settle for a 2 bed apartment in a prime location area than a villa in a secondary location.
TIP 2, Make Sure Your Property is Rentable.
Whilst your property doesn’t have to be in prime location it does have to be where there is a demand for Holiday Homes and where you will be able to achieve good rental income. Two good examples of this would be a Golf course property due to the all year round rental potential or a beachside apartment close to amenities which is what most families look for when they book their Holiday Rental. A bad thing to do buy would be a very good looking property not close to amenities with no facilities even though the development itself has stunning views, pool and garden.
TIP 3, Make Sure You Only the Use the Best Professionals
An old adage that you should never skimp on your Accountant or Lawyer is never truer when investing in a Foreign Country. Make sure you use the best available Lawyer, Mortgage Broker and Agent when buying your Spanish properties to do anything else would be foolhardy in the extreme. A lot of the so called horror stories you read about could have been avoided if the buyers had used the best available professionals and the reality is they probably don’t cost any much more than the lesser ones.
Tip 4, Think About Your Exit Strategy
As any successful property investor would tell you it’s only when you actually dispose of your investment that you actually make a profit. So think about what you’re buying and when you’re going to sell it. As a rule it’s very difficult to make quick returns in Spain, your investment should be based on the medium to long term.
Tip 5, Beware of the Buying Costs in Spain.
One of the biggest obstacles to making large profits in Spanish property investments is the high buying costs in Spain which can be as much as 12% of the Purchase price where there is a high mortgage involved. This makes it very difficult to buy and sell quickly and make a profit.
So if you’re interested in Spanish property investment in 2012 I hope you have found this article of some use. If you need any more in depth help just drop me a line or give me a call