Buffer

Investment Property in Spain

Elvis Elvis

Interested in investment property in Spain?

Buying a property off-plan is still one of the best ways of purchasing property in Spain… and getting on that ladder. There are a number of advantages that spring to mind for buying investment property this way.

Of course, the earlier you buy into a project the less expensive it is. Profits increase as prices rise considerably once the building is complete.

Also, the payment schedule is much easier. Normally a deposit is followed by a series of payments (sometimes monthly payments and sometimes three or four larger payments during construction). VAT is included with each payment so the final purchase costs are not so scary either.

On completion, and having paid approximately 50% of the price the buyer can then take over the promoter’s mortgage loan for the remainder. This is quite an easy process. You can also search out another mortgage should you prefer or pay the man off in full. (By the way, the buyer is not obliged to take over the promoter’s mortgage … or pay for any cancellation charges incurred.)

Another interesting fact when purchasing investment property off-plan is that your property is well protected in Spanish law. The promoter being responsible for any serious construction flaws for ten years. Although in reality, if there are any problems they usually show up in the first year and in fact, this is not an issue that comes up often.

Investment Property in Spain

The promoter is also obliged to provide up front a list of what building materials are to be used and what type of finish to expect, such as windows, doors, bathroom and kitchen units… and will heating and air conditioning units be installed or simply pre-installed?

It might also be worthy of note that in this well-known holiday destination many investment properties easily convert into rental properties and, of course, the rental income pays off the mortgage loan. Is this good or what?

But, before starting out on your property search for the first likely project and signing on the dotted line, you’ll need to talk to that man again – you know the one – he’s on the recommended lawyers list.

He’ll need to do a series of checks for you with the Land Registry and with the Town Hall. He’ll also need to see the Municipal Building Licence… and that’s just for starters. Then, if the promoter is not well-known he will make a check of the company’s history at the business registry in Malaga.

Once all this is done there’s the sales-purchase contract to peruse… to ensure that guarantees are in place to protect the monies received. He will also check for any penalisation clause for not completing the project on schedule. (It happens!)

You’ll be assured to know that this type of investment property purchase is repeated thousands of times a year here in Malaga by British and Spanish alike. As you can see, as long as you have good legal advice the whole process is … as safe as houses!