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Should I buy or rent a flat in Spain? Guidelines

This is a question that our clients and registered visitors have asked us over the last few months: should I buy or rent a flat in Spain?
Spain is a great place to live and be visited. The alluring country attracts millions of holiday-makers and new residents from overseas, every year. Whoever decides to make the move to Spain, either permanently or for long periods, has to consider whether to buy or rent a property there.
Ideally, you can buy and keep your property for yourself, but for many holiday makers and expats wanting to live permanently in Spain, it can seem difficult to afford.

Spanish bargain hunters

Low prices appear very attractive in Spain, especially on the coast, and sub-prime properties, as investments in the cities. However, it is not all about the buying price, but also depends on whether you can get a mortgage, and what kind, and there are additional costs in the buying process (which usually comes to 10% in Spain).
There are also insurance costs and yearly expenses that include “service charges” and Council Tax (“I.B.I.”). For most of us, to buy in Spain is a question of affordability, and having the right strategy, in order to make it affordable.

Property prices keep dropping

Generally, the prices in both markets (rental and selling) are incompatible: if one of them goes up, the other falls. But at the moment, selling prices are dropping and rental prices also seem to be going down as well. This means, whether you are buying or renting, now is a good time to do move to Spain, if you are serious about Spain.
Whether to buy or to rent in Spain depends on your goals. I am sure that renting a place now will be cheaper, easier and less risky than buying. Also, if you are planning to live abroad and Spain seems to be your favourite place, I would advise, as somebody said recently in an online discussion, to travel around Spain and discover the country in depth. Do not be an impulsive buyer in the first warm place that you arrive.
Buying a property has advantages and it is true that it is becoming cheaper than ever – and it will probably be even cheaper in 2012. Also, currently, some Banks are offering good discounts and paying some expenses (such as legal fees) on behalf of buyers. On top of that, now there is a reduction of V.A.T. reduction to 4%, an offer which will apply until 31st December 2011. Nevertheless, there are other administrative overheads involved in buying in Spain, which are still too expensive.

Do not be an emotional buyer !!!

If you are planning to buy, nothing should stop you finding the place that suits your needs? But do not rush because the HOUSE OF YOUR DREAMS does not exist, or should not exist. There are enough options without becoming besotted with one house. THIS IS THE PROBLEM THAT MANY BRITONS have had in past years. When you become too emotional about a property, there is a high risk in avoiding to look at the details, and then getting stung, especially in Spain during a bubble market where suddenly everybody has become a developer or estate agent. GET A LAWYER – it is a must. If at this stage, a home buyer does not get a reliable lawyer, it means that he has not learnt anything.
So have a look around, make a selection and enjoy the process of choosing your property. Be ready for bargaining and set a very low buying price. I would say 40% below the asking price as a starting point for second residences on the coasts, which also happens to be the profile for retirement homes.
In the cities, the situation is different and the negotiation price is not as great as with coastal properties. I would say that Madrid, Barcelona, Santander and probably Valencia, are the cities where I would expect to see prices stabilization within a couple of years.

IF YOU WANT TO RENT, I must say that it might probably be a clever option.


IF YOU WANT TO BUY, get ready to sharpen your negotiation skills in order to win your bargain. Be ready to pay an average of 10% of the property price on buying costs, which is a lot, but taking into account the current decline in prices in the market and how “desperate” sellers could be, don’t worry too much about the buying costs!
Good luck and enjoy Spain!


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    One thought on “Should I buy or rent a flat in Spain? Guidelines

    1. Lisa Sadleir

      Good advice! Too many people rush into buying a property abroad because they fall in love with the “idea” of life abroad.
      Although there are many bargains in Spain at present, renting for the first 12 – 18 months, untils you are certain you have made the right decision, is a much safer option. Remember the sun does not always shine in Spain… despite what “some” agents might tell you!
      It is, however, a great place to live!


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