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“Property” 

Question:  What is the first step in buying a Spanish property?

Answer:  Buying property in any country is a huge financial decision and you need to take into account many factors before you can move forward. Buying Spanish property is no different so you need to ensure that you are completely prepared before you have even stepped onto the plane on either a viewing tour or taking a holiday which may involve some Spanish property research during your stay.  

Research is the key to buying successfully. The people who find problems are normally the ones that were either unprepared, failed to do their homework or just made a rash decision. If you have all the relevant information at hand then it will make the whole process much easier for all concerned. 

The Spanish property market has seen significant growth for many years and 2006 was no exception. The foreign investors have made this market even stronger. There was a 20% increase in total sales compared to 2005. This makes news of a Spanish property market slump completely inaccurate. The Valencian community where the Costa Blanca is situated saw the largest rise and accounted for 25% of all the properties purchased.  

It was be advisable to first visit the many Spanish property exhibitions and read as much literature as possible before you commit to an inspection tour. Once you are armed with all the relevant facts it is just a matter of filling in the missing knowledge and this can only be done when you visit the region you wish to buy in. 

As you may be making a huge life changing decision you need to ensure that you have all the financial factors in place. Be sure of your budget and the area you want to live in. Don't be sold a property just by the velvet tongue of a polite estate agent representative. 

You know what type of property you want to live in and you know your budget. Keeping these factors clear in your mind will ensure that you get the property that you want at a price you can afford. 

  

Question:  What do I need to know about new and resale Spanish property?

Answer:  When to buy property:

New Property: If you are planning to make arrangements to come over to Spain looking for property on a new development it would be advisable that you ensure that the show house or apartment is completed. Only when this is done can you really get a feel of the inner build and if you think the area and layout is suitable for your needs. 

Buying off-plan is one thing but trying to get a feel of the inside completely blind is very difficult. You really need to walk around a property first to ensure you get the right vibes. 

Many new developments build in stages and it is not uncommon for the architects to change the layout and design if they have found the original plans were too costly or time consuming to build. When this happens they have to get new planning permission for the changes. 

For the buyer this is not a bad thing because if you can stay in contact with the agents then they will be able to update you when the next phase is being released. You can then fly over on this day and you will have first selection of the entire phase to ensure you get the best plot or apartment. 

Resale Property:

Although resale properties come onto the market everyday there are times when there are more advantageous times to buy. One of these is October when home owners who have been renting out their property will wait till the holiday season is finished before selling their property. Being in Spain in October will present you with an opportunity to view these properties as soon as they come onto the market. 

These properties will also be empty for rental occupants so you can have a better viewing of the property in an empty and tidy state so you can make a better decision. There is nothing worse than viewing property when there are occupants either inside or have been told to vacate the property for your viewing. Nothing is more of a turn-off than seeing dishes in the sink, towels decorating the terrace and a living area with the remnants of last nights party.

January is another time when resale property comes onto the market. It is a time for change for many people and January is a true milestone for this. Wait until at least the second week of January to visit due to the Christmas and New Year holidays.   

Question:  What do I need to consider when buying off-plan property in Spain?

Answer:  One of the most popular forms of buying property is off-plan. This means the property has yet to be completed or in most cases the property building of the particular phase has yet to start.

This is an ideal situation for the builders who will use your finances to complete the build. Buying off-plan also suits many buyers who will have time to either get their finances organized over a longer period and provides ample time to sell their current property in their home country.   

Property investors have been taking advantage of the buying off-plan option for many years. You will find that many will purchase the most desirable properties and put them up for sale as soon as they have been completed. Once the property has been sold they move onto the next one virtually chasing the tower cranes along the coast.  For those of us who are buying our dream home off-plan then the planning and commitment is something that can not be taken lightly. Research is the key to a successful purchase. Poor homework is one of the reasons why many buyers are disappointed with the finished property. 

One of the problems of buying off-plan is trying to visualise what the finished property will be like after completion. Hopefully show apartments and homes are available to give you a real feel of the interior but they often do not have them for all the floor plans available. This is where you have to get the exact size of rooms and a feel of the space to be able to put together an accurate picture of the property you are buying. 

If you are buying an apartment then you need to consider the views, not just on completion but how they may be affected in the future by new building work. If you do not like the idea of being overlooked then you need to take into account the complete plans of the development. Ground floor purchases may want to consider the security and additional noise factors. 

Do you like the all day sun (south facing) or prefer the shade for most of the day with a little morning sun (north facing). Only by doing the research first can you be in a position to buy off-plan. Considering every option and eventuality will save a lot of heartache later on. There is no worse feeling than getting the keys to a dream home only to feel disappointed when it turns out nothing like you had imagined. 

Question:  What do I need to know about buying a resale Spanish property?

Answer:  For those buyers that don't want to buy property off-plan and wait a few years for completion there is plenty of choice in the second hand property market. With Spanish building standards coming under European quality control in the last ten years you can be confident that buying property less than this period will be of a high standard of construction.

It takes an average property in the Alicante region to take at least four months to sell. This reflects the slowdown in real estate sales, interest rate rises and the continuing price increases.If you are looking for an average Spanish townhouse on a secure complex with prices between 120,000 - 150,000 € you will find lots available. In this area it really is a buyers market and you can negotiate some really good deals. 

If you are looking for savings it always pays to do some mileage on foot and in your car in the areas where you would like to buy. 

It is always a good idea to speak to the owners of the property to see how desperate they are to sell and if there is any room for negotiation. The more desirable properties on luxury complexes; those situated with sea views and in the top locations will always hold their price better. They also make for a more solid investment for the future. 

Look for properties near all amenities such as schools, supermarkets, bus routes, nightlife, and highway connections. Any property with sea views will always command top prices though if you are buying do a little research to see if there is any potential future building work that may alter this. If this does happen the value of the property will decline. 

For resale buyers looking for future investments, locate property’s that are unique, full of character and having wide appeal. Look at the rental potential even if you have no desire to rent. It's nice to know what the options are if you ever need it. Buying featureless property in poor locations like thousands of others is never a good idea unless your budget and circumstances dictate it. 

Question:  What do I need to know about the Spanish property rental market? 

Answer:  The growth of the property rental market in Spain is having a negative effect on the previously thriving hotel industry on the Costa Blanca. The visitors to the region are growing every year but many of the tourists are now staying in property owned wither by family, friends or friends of friends. It seems everyone knows somebody who is a property owner in Spain.

With cheap flights to Alicante available with many no-frills airlines it makes economic sense for many families to choose property rental ahead of the pricier hotel option.  Around a third of all visitors to the region now choose to stay in rental accommodation and this number is predicted to rise significantly in the near future. 

All of this is going to put increasing pressure on the hotel industry to look for ways to entice back the holidaymakers. Many have started already by offering all-inclusive packages that target families. 

For the property owner this is all good news and reflects the number of home owners who purchased with a view to renting out to cover the mortgage expenses.There are no shortages of property management Companies that will take care of all the rental needs of your clients. This includes cleaning, advertising, airport transfers and so forth.  Commissions vary from Company to Company so you will need to ensure that they have the client base and have advertising in place to satisfy your needs. If they have similar properties for rent ask them for their booking percentage. Don't sign with the Company until you are sure that they can deliver on their promises. 

You need to first take a look at the potential income your property can generate. First calculate the overheads of your property such as water, electric, administration payments, property management commissions and taxes if you registered your property for rental. 

Most of your income will be produced in the June to September peak months so you need to somehow target clients outside of this period. Many try for long lease clients between the months of October to May. If there are new properties being built in your area you may be able to target the new owners who like to live close to where their property is being built so they can monitor the progress. 

Question:  Should I rent out my Spanish property?

Answer:  With a buoyant Spanish property market many home owners are buying for investment reasons with a view to renting out their property on completion. This makes financial sense in many cases but you need to ensure that you buy a property that not only appeals to you to live in but will be just as attractive for long and short-term rental clients.  

By law you are supposed to inform the Spanish Tourist Board that you are renting your property out but many ignore this law and rent out their property regardless.  The Spanish tax authorities are clamping down on anyone who illegally lets out their property without having registered first. They now have special teams devoted to tracking down the property owners who are benefiting financially from renting out their property. 

Proving cash has changed hands is a challenge for the authorities so they find it easier to target the home owners that are advertising locally. 

It is quite common when new builds are near completion for the owners to receive brochures from property management companies offering their services. They will inform you of large furniture packages that can be purchased along with all the other items needed by potential rental clients such as bed sheets, crockery, cutlery etc. All this can be taken care of by the management Company on your behalf. 

Renting out your property is a decision that should not be taken lightly. You need to consider both sides of the equation in terms of generated income and the deteriorating condition of the property after a long summer. 

All this has to be paid for by yourself so you will need to take into account the maintenance of the property as well as the Management Company fees for finding your clients.  

You will need to ensure that the Management Company has a large enough database of clients to be able to rent your property for the periods you would like. Finding the clients out of season is of course more difficult so many property owners also do their share of advertising to assist the Management Company. 

Renting out your property is a completely hands off approach as the Management Companies staff will take care of all the turnaround work such as cleaning and changing sheets etc.  

Many property buyers purchased on the assumption of renting only to find that when they view their brand new property they had a change of heart and prefer to either move in themselves or just use it for family and friends to rent.  

Question:  What is Spanish land grab and the law?

Answer:  It is important to get the absolute facts addressed regarding the controversial land grab law (LRAU) that has affected many parts of the Valencia region. The law 'Ley Urbanistica de Valenciana' or (LUV) as it is known in Spain has made many current and potential new property owners take note after hearing about some horrendous stories of the land grab law in action just by reading the newspapers and television reports. This is far from scaremongering because the facts of the matter are that the law is in place and has already been served on hundreds of properties owned by overseas buyers.

The 1994 law introduced by the Valencia and Andalucian regions was to re-categorise land that was deemed as 'rustic' and re-classing it as 'urban' thus making it available for builders to develop. If your land was in the area recently classed as 'urban' then the developers could purchase your land. 

The compensation paid to the owners was always below market value. If the whole of your land was lucky enough to escape the clutches of the developers they may just take part of your land and build a road through it, as if losing your land wasn't enough they would also demand that you pay towards the infrastructure to provide street lighting, water supply systems and road networks to the development. 

Many of these properties were purchased many years ago and the buyers failed to do the correct research into the land they were purchasing through their Notary at the local Town Hall. Land affected was normally on the outskirts of a town or village or occupied some prime real estate near the coast.  

Update:

The European Union has now acted on this controversial law and has given Madrid two months to act. It is demanding that the Valencia region conforms to European law or it will face legal action in the European Court of Justice.  

Amendments have been made to the law by Madrid and the Valencian Government, they believe that they now meet the European requirements but this is far from satisfying the European Union. As it stands at present the new draft still have many flaws that need to be ironed out. Presently the authority that hands out the development contracts has the right to alter the contract during the granting and after the signing. The European Union stresses that this needs to be changed. 

The land owners feel betrayed by the Spanish Government and do not trust them when seeking a redress of the current law. Due to this the 15,000 people that are affected by the lay decided to go directly to the European Union with their complaints. 

It will be interesting to see how the Spanish Government reacts to the time squeeze initiated by Europe with the threat of legal action in the European Courts of Justice looming.