Buying in Spain - What to Consider?

Diceicle

I'm looking to get some insights into the realities of buying a property in Spain in the coming years.
With my limited knowledge, it appears feasible, so I'd like to know if there's something I'm missing and then I can forget about this idea - right now, more so from a bank/affordability stand-point.

I have a home in Ireland with my wife and kids. The mortgage is manageable but won't be finished for a long while yet.
The intention is to eventually buy a place in Spain where we can holiday and eventually retire to.

Price-wise, decent 2 bed apartments are around the 120k mark. The figure I have in my head would be maybe a budget of 150k.
The vision is to save a ball of money (lets say 50k for a round number) and get a small mortgage for the rest. We would rent out the place for parts of the year to help with the mortgage overall (though I understand and accept that this is not guaranteed income).

Would also factor in a modest sum for annual charges and taxes etc.

Would it be advisable to get the mortgage from a Spanish bank?
Are there any particulars around financial stress-tests to be aware of?


TIA for any helpful posts.

SpencerJC

Diceicle wrote: »

I'm looking to get some insights into the realities of buying a property in Spain in the coming years.
With my limited knowledge, it appears feasible, so I'd like to know if there's something I'm missing and then I can forget about this idea - right now, more so from a bank/affordability stand-point.

I have a home in Ireland with my wife and kids. The mortgage is manageable but won't be finished for a long while yet.
The intention is to eventually buy a place in Spain where we can holiday and eventually retire to.

Price-wise, decent 2 bed apartments are around the 120k mark. The figure I have in my head would be maybe a budget of 150k.
The vision is to save a ball of money (lets say 50k for a round number) and get a small mortgage for the rest. We would rent out the place for parts of the year to help with the mortgage overall (though I understand and accept that this is not guaranteed income).

Would also factor in a modest sum for annual charges and taxes etc.

Would it be advisable to get the mortgage from a Spanish bank?
Are there any particulars around financial stress-tests to be aware of?


TIA for any helpful posts.

Where abouts in Spain would you be looking? They never stop building in certain parts of Spain, there tends to be a lot of demand for new builds compared to 2nd hand. I know people who paid 250K for a nice 2 bed new build and down the road you could pick up something similar for about 100k, just second hand. Granted the former is closer to the beach but still a big difference. This is close to Alicante btw.

Spanish Eyes

Yes, where are you thinking of buying?

And if you are not trolling why would you consider this now of all times on the planet.

brisan

Spanish Eyes wrote: »

Yes, where are you thinking of buying?

And if you are not trolling why would you consider this now of all times on the planet.

maybe because
A its a long term plan and hopefully Covid wont be around forever
B Property prices may fall in Spain in the coming months

Pelezico

brisan wrote: »

maybe because
A its a long term plan and hopefully Covid wont be around forever
B Property prices may fall in Spain in the coming months

I am considering buying....a little town north of Denia called Oliva.

Very cheap for beach property and access to airports at Alicante and Valencia.

Go to idealista and look up properties at Playa de Oliva.

You will pick up something nice for 120k. Cost of living very cheap.

Spanish Eyes

I'd buy a bolthole in Ireland, a wreck even and do it up over the years.

Foreign travel is not going to be that viable anytime soon. Lockdowns happen frequently as does quarantine.

I know the weather is an issue here, but so be it.

brisan

Pelezico wrote: »

I am considering buying....a little town north of Denia called Oliva.

Very cheap for beach property and access to airports at Alicante and Valencia.

Go to idealista and look up properties at Playa de Oliva.

You will pick up something nice for 120k. Cost of living very cheap.

You obviously watch a place in the sun

Pelezico

Spanish Eyes wrote: »

I'd buy a bolthole in Ireland, a wreck even and do it up over the years.

Foreign travel is not going to be that viable anytime soon. Lockdowns happen frequently as does quarantine.

I know the weather is an issue here, but so be it.

If you move to Spain, cost of living significantly lower and weather is excellent except July and August.

Make sure there are airports accessible. Oh and learn Spanish.

unhappys10

Pelezico wrote: »

I am considering buying....a little town north of Denia called Oliva.

Very cheap for beach property and access to airports at Alicante and Valencia.

Go to idealista and look up properties at Playa de Oliva.

You will pick up something nice for 120k. Cost of living very cheap.

Just had a Google, nice looking spot!

Pelezico

unhappys10 wrote: »

Just had a Google, nice looking spot!

The beach is superb...one of the best on that coast.

The cost of property is very cheap.

Spanish Eyes

Pelezico wrote: »

If you move to Spain, cost of living significantly lower and weather is excellent except July and August.

Make sure there are airports accessible. Oh and learn Spanish.

Hola, Yes I know all this. But it is not that accessible anymore really.

A family member has a place in Casares above Estepona. None of us have been able to visit this year. And hence my username. They are very generous to offer it to us, but they are quite despondent going forward.

But that's life.

Pelezico

Spanish Eyes wrote: »

Hola, Yes I know all this. But it is not that accessible anymore really.

A family member has a place in Casares above Estepona. None of us have been able to visit this year. And hence my username. They are very generous to offer it to us, but they are quite despondent going forward.

But that's life.

Well I am just back from Oliva. I flew to Valencia, got the Metro into town and then a train to Gandia.

It is very accessible.

Spanish Eyes

Pelezico wrote: »

Well I am just back from Oliva. I flew to Valencia, got the Metro into town and then a train to Gandia.

It is very accessible.

Good to hear.

How is your quarantine going on return.

unhappys10

Pelezico wrote: »

The beach is superb...one of the best on that coast.

The cost of property is very cheap.

Definitely a future plan down the line for my family.

Pelezico

Spanish Eyes wrote: »

Good to hear.

How is your quarantine going on return.

Really good. I am working from home so no issue.

Spain is a wonderful place to buy. Go secondhand near beach and stay away from.golf complexes which are overpriced.

Spanish Eyes

Spanish Eyes wrote: »

Hola, Yes I know all this. But it is not that accessible anymore really.

A family member has a place in Casares above Estepona. None of us have been able to visit this year. And hence my username. They are very generous to offer it to us, but they are quite despondent going forward.

But that's life.

Covid will not last forever. By the time the OP is retiring to his apartment in Spain, it'll be long, long forgotten about, I'm sure.

For someone who wanted to consider this, are there any services or such where you can wander over and have a look around? Like estate agents that specifically sell to foreigners?


My sister in law's parents moved over, but it seemed to have been a bit of a random make it up as you go along kind of approach that they took. I have always been meaning to ask them how they opted for where they are etc. but i naturally don't see much of them anymore, and even when they were here every answer tended to last for hours, full of details that had no relevance whatsoever.

jasonb

I had to do the opposite of this, sell an house in Spain after my Mother died, though it was 7 years ago now, so it might have changed.

As far as I know (though I could be wrong) you will need to shave a Spanish Bank Account and get a Spanish Mortgage. You also need some sort of 'number', I can't remember the name of it, maybe something like our PPS number, but basically a number that lets you 'do business' in Spain.

If you don't know Spanish, then learning it would be helpful! And ideally you need someone in Spain, like a broker or estate agent, who will look after the purchase for you as they're over there and you're not. If you know someone in the area, or can get to know someone, they might be able to recommend someone.

There are the usual bank/solicitors fees etc. etc. and taxes etc. to pay, as well as whatever the agent charges as well.

Once again, I was selling, not buying, but I'd recommend talking to someone who lives in the area, finding the name of a reputable Estate Agent over there and using them. Lot's of people do this, and it's not a mad idea, but it is a different country with different hoops to jump through that we're not used to (and you know how many hoops we have over here when buying a house!).

Best of luck with it...

circular flexing

Deleted User wrote: »

Covid will not last forever. By the time the OP is retiring to his apartment in Spain, it'll be long, long forgotten about, I'm sure.

You can't say that for certain right now. And even if Covid is under control eventually, you can't say that the ease of access pre-Covid in terms of number of flights will be the same.

Pelezico

[Deleted User] wrote: »

For someone who wanted to consider this, are there any services or such where you can wander over and have a look around? Like estate agents that specifically sell to foreigners?


My sister in law's parents moved over, but it seemed to have been a bit of a random make it up as you go along kind of approach that they took. I have always been meaning to ask them how they opted for where they are etc. but i naturally don't see much of them anymore, and even when they were here every answer tended to last for hours, full of details that had no relevance whatsoever.

Do not buy from an estate agent who deals only with foreigners.

Check kyero and idealista for properties. It is a good starting place.

krissovo

We bought 10 years ago in Puerto Banus, long story short it was great when kids were young now they are a bit older and have their friends network its not our retreat for long summers as they once were.

Also the resort and the area around the property has been over developed and the clientele has gone down hill and these beautiful apartments are starting to get abused and not as well maintained as they could be. We would never retire there now.

We are now looking for an alternative location like Nerja that have local policies that restrict development plus it can be used for skiing in the winter. Early indicators are there is interest in the property and value should hold quite well. Interest is driven by the new work from home employees particularly Nordic based countries.

In terms of tips, get a local solicitor and ensure they are trust worthy. They can arrange local mortgages and fast track purchases. If you plan on letting it out get a good management company and pay a little over the odds for a good one. A cheap management company is a false economy. Visit the property both in season and off season before buying. Sea views And access to a beach hold their value much higher and easier to let. Property management fees add up, if they are low then the upkeep of the area will be maintained using short cuts, things like pool cleaning take a bit of a hit or maintenance of the gardens. Also maintenance fees do rise with inflation and sometimes higher until a new contract is sourced.

Pelezico

Phishnet wrote: »

Maybe you should also consider if there is an airport near your proposed purchase, and if this is the case, will Irish carriers continue to fly into that particular airport due to reduction in flights because of covid.

Covid will pass. Forget about it.

That is why I am looking at Oliva Beach. Close to Alicante and Valencia.

Very accessible. Cheap property and fabulous beach.

The town of Denia is very near for days away. I can get a cheap train to Valencia for five euros once I pass 60.

What is not to like? No TV licence, very cheap utility costs and food 40% cheaper than Ireland.

Spanish Eyes

I would consider renting myself. All hassles to the LL. Cannot see the upside to owning a foreign property anymore.

Did that, have the T Shirt but that was in Nice France. Glad to get away from all the shenanigans, bureacracy and taxes and management fees etc. when we could only use it a few weeks in the year really. Good riddance.

Spanish Eyes

Will think of a bolthole in Ireland now. Cheap as chips and do it up. It's the way the world is going now. Stay close to home, stay safe and all that.

Outkast_IRE

My father has owned property out there for 15 years.
He purchased in a small estate south of Torrevieja , good accessibility to Alicante and Murcia Airports.

Key things to consider -
Alot of people buy with the intention of renting it out but find out pretty quickly that the extensive wear and tear on the property gets old pretty fast and any of your breaks out there become 2 weeks of jobs. The management company and cleaners that are meant to do if for you spend minimal time in the place between rentals.

Affordability wise , assume no rent. If you can live with that then you are in good shape. Some people will only rent it out to family members or friends, this tends to work well if you have a big family as a home can be a cost effective destination for a family vs a traditional package holiday, it can sometimes work well on the honor system where they must clean it fully before they leave, and if they dont , they dont get the opportunity to rent again.

Get a good solicitor over there and ensure any deeds and land ownership is fully resolved. If buying in an estate or community ensure its fully solvent and there isnt a big issue with debtors. Be aware management fees are the norm in every community but generally you can see where the money goes.

Decide if you want to buy in an established area or a new development. With an established area you know what you are getting, what amenities are local , what mix of people are living there. With a new area it could take 10 years to come 100% right depending on economy in general etc.

There is some good value to be had, in my dads estate currently there is a 3 bed terrace house going for €99k . The owner was put in a home recently so they need a quick sale. So keep a sharp eye out, but i would not be surprised to see prices drop further in the next year.

Spanish Eyes

Phishnet wrote: »

Maybe you should also consider if there is an airport near your proposed purchase, and if this is the case, will Irish carriers continue to fly into that particular airport due to reduction in flights because of covid.

That's a good point.

Pelezico

Spanish Eyes wrote: »

I would consider renting myself. All hassles to the LL. Cannot see the upside to owning a foreign property anymore.

Did that, have the T Shirt but that was in Nice France. Glad to get away from all the shenanigans, bureacracy and taxes and management fees etc. when we could only use it a few weeks in the year really. Good riddance.

Spain is much cheaper than France.

Wine and cigarettes are dirt cheap. Bought a load of salmon for eight euros per kg in the local supermarket.

pinksoir

I live in Spain now. Working and living in Barcelona. We are looking the buy in the next few years.

There's lots of good value here (not in BCN specifically, property prices are insane here) so I would say it's a very realistic option.

You can get a Spanish mortgage as a foreigner/non resident. In fact I think it must be a Spanish mortgage if you're not buying for cash. They will lend 70% to non residents. There is a property transfer fee which is 10% of the property price, plus a little extra on top for legal fees. This must come out of your pocket. So you're looking at a bit over 40% you'll need to finance yourself.

Another option is to buy a plot of land and then build a prefab house on it. This is what we're going to do and it's becoming really really big over here. You can get an amazing place for less than 100k (finished and including VAT) Something like 150sqm +. Of course you can go smaller too. You can get plots for peanuts if it's not near a major city. 3-4 months for it to be built.

The issue here is that a bank will only give a mortgage for 50% of the plot value. And then you have those transfer fees. But you could buy a plot outright for 15-20k (or less). And then use the rest for the mortgage down payment.

One thing to look out for is when you eventually die and your property goes to your kids. Anything over 16k (for kids/close family its lower for more distant relatives or even siblings) is liable for inheritance tax. It depends on the autonomous region but that might end up being a big chunk of the value (it's about 20% for 200k value). Plus of course they have to pay it within 6 months, even if the property isn't sold. Vintage Spain. Something like 10% of inheritances here are refused because they can't afford to pay the costs. Something to bear in mind.

But again, depending on the region there are reductions. Madrid and Andalucía (just recently) have something like 99% reductions, so they wouldn't pay anything really.

circular flexing

circular flexing wrote: »

You can't say that for certain right now.

I think I can. Other than a few scaremongers, I think most people realise that it's not going to be with us permanently. If we managed to figure out how to deal with the Spanish Flu a hundred years ago, I'm pretty confident we will manage with Coronavirus.

Spanish Eyes

Pelezico wrote: »

Spain is much cheaper than France.

Wine and cigarettes are dirt cheap. Bought a load of salmon for eight euros per kg in the local supermarket.

Yes I know that.

No way would I buy a property abroad though.

Renting is the way to go.

Blondie919

It's a dream plan for us too but it will be a long time yet before we ever get to that stage. However, the wife is doing all looking and searching for properties. She loves watching A Pace in the Sun and has found an Irish estate agents called VIP. They are based somewhere in the south.