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Spain Property

There are many things to think about when buying a property in Spain, just as there are when buying a property in the Spain. Spanish property investment has been popular with investors for a long time and is still the favourite location for UK investors due to many factors, including the number of low cost airlines operating from over the UK to many destinations within Spain. Many investors look to secure a rental income from their investment property and Spain is one of the safest options for rental yields, due to its established tourist industry which over the years has proved it can reliably satisfy this requirement.

Facts and figures for property investors

It's impossible to predict exactly what return you'll get from your investment but recent reports from various sources agree that it will be high. The rising demand for property will continue to fuel the growth of the property market. Spain's ministry of development has gone on record as saying that the average increase in Spanish house prices was 17.5 percent in the second quarter of 2003 compared to the same period in 2002. Before you decide on what you want to buy, take the time to do some research. Clearly, if you're planning on earning an immediate income from your investment you should look for an existing property (commonly referred to as a resale property) in an area frequented by holidaymakers. Take a look at the rental market; get a feel for how much you can rent your villa or apartment for. Don't forget to factor in other costs such as maintenance and management charges (someone will have to look after the property in your absence) and remember that property with pools that are close to the beach will yield higher rental incomes. Buying a run down place for renovation has the advantage that you can improve the property in ways that will specifically attract holidaymakers. It's a good way of adding value to your property, but be aware that getting building work done in Spain can take longer than you would prefer.

Essential property secrets to buying in Spain

Please keep the following points in mind before buying property in Spain.

1. Read the contract

The contract should include the purchase price and conditions of payment, a complete description of the property, a section headed Cargas (Charges), which should read ‘Free of Charges and Encumbrances', and a clause concerning vacant possession on completion, which should read ‘Free of Sitting Tenants'.

2. Insert a penalty clause into the contract

It is a good idea to have a further penalty clause inserted in the contract stating that if for any reason the vendor does not complete on the contract and wishes to withdraw, he must pay the purchaser an indemnity of double the amount paid as a deposit for the purchase of the property.

3. Get your mortgage approved before you go to look at any property in Spain

Whether you intend to borrow in the UK or abroad, it is a good idea to get at least a preliminary confirmation that you will be able to borrow what you need before you go looking at properties. You know how much you have to spend, and being an instant buyer can also give you a tactical advantage when bidding for, or negotiating the price of, the property.

4. Rent a home before you buy

If you have the luxury of time, consider renting in an area you think you like so you can get to know if you really do like it before you buy.

5. Be aware that many debts in Spain are on the property, not the person

Your lawyer should have obtained proof that any outstanding debts and all community fees, electricity, water, telephone bills and rates are paid to date. These items are the responsibility of the vendor up until the day of the signing of the escritura by the new purchaser.