Investment Property In Spain – avoid the pitfalls!
It is no secret that although buying investment property in Spain is one of the smartest moves any investor can make, the actual process of purchasing the property has become very risky business in recent years for the reckless investor who does not care to take the necessary precautions.This does not mean that foreign investors should give up on their dream of having a beautiful home in the sun. Rather, what it basically means is that one has to proceed with extreme caution just like you do when investing large sums of money wherever in the world you may be. Speed is also important because as an investor, you will want to lay claim to your piece of sunny Spain before the prices rise too much. It is usual for developers of a new project to offer ‘pre-release’ prices on the first batch of properties on the initial phase. By registering an interest before the release date, investors in property in Spain can often ‘grab’ a property at a price below market value. There can often be as little as 30 properties released at these prices, so it is important to have your name registered with someone (be it an agent or the developer) to be informed immediately of a release. The early bird really can catch the worm in these cases! Dangers arise from, amongst other factors, the fact that developers are very much aware of the existing high demand for property in Spain and are anxious to build as much as possible and as quickly as is feasible before any possible drop in demand starts to occur. This building frenzy creates various potential hazards and pitfalls that every potential investor in Spain should be keenly wary of. To start with, this current market situation may drive certain developers to build too quickly without observing all the existing laws, laid down procedures and regulations. The result is an illegal structure that will sooner or later land the purchaser into all sorts of problems that could end up in serious financial loss for them. Other developers and even some estate agents who are aware of the fact that foreign property buyers will tend to be less informed will have no qualms about selling an off plan property that could destined to be demolished, or at the very least does not yet have the correct licences in place. The authorities in Spain have moved quickly to protect foreign investors from these sort of deals and in recent years legal security has been tightened where property transactions are involved. Still, caution is always advisable. One way of the ways of taking precautions in this volatile but lucrative property market that is Spain, is by appointing a qualified legal representative to look after your interests as a buyer. This is important because there will always be many dangers when one has to part with substantial sums of money. This applies no matter where in the world you are. It therefore makes lots of sense to ensure that you protect yourself as much as possible. In recent months, it has come to light that two big beach/golf developments on the Costa Calida have been drawn to the attention of the authorities for various reasons. One of our biggest markets at Spanish villas Spain is golf and investment property in Spain, and there are many of these developments to choose from. We are therefore advising clients at the present time, to avoid these two resorts until such time as the legal matters have been resolved. Any good agent should do the same.
About the Author
I have worked in the rentals business for the past 6 years and living in Spain for the past 4. I now manage Citrus Iberia (CB), a British Estate Agents on the Costa Blanca offering Spanish property for sale, Property management, holiday
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