Date: Tuesday, January 30, 2007 @ 04:37 PM EST
Topic: Buying
Buying a property abroad is an exciting experience, and it can also be
a lucrative investment if it is done properly. Tony Roberts reveals the
secrets to buying property in Spain and offers his ten top tips on
making the right investment
We have always known that investing in bricks and mortar is normally
the most lucrative and wisest investment you could ever make. However,
with the continuing price rises in the UK many are looking abroad to
buy an investment home and future nest egg. Spain has always been first
choice for many, with year round sunshine and relatively cheap cost of
living. Nevertheless, what do we buy and how? Tony Roberts reveals the
secrets to buying property here and offer his ten top tips on making
the right investment.
When we bought our first property in the Costa del Almeria, we broke
every rule and guideline. We bought impulsively whilst on holiday,
having done no research whatsoever. We dealt with an estate agent who
we later discovered had a rather colourful history, we bought off-plan
without ever visiting the site, we did not use a lawyer and so the list
went on. It was very exciting and we were incredibly lucky. However, do
not push your luck follow these guidelines. Get it right and you will
have a wonderful asset that will give you and your family enormous
enjoyment over the years as well as creating greater wealth.
1. Get the help of an Estate Agent
Your first step should be shop for a good estate agent, not shop for a
property. Estate agents are necessary in the UK and in most other
countries; you cannot afford to be without one. Get yourself a good
one, look at the websites; a good one will seem genuinely concerned
about informing homebuyers, check out the testimonials. A reputable
agent will help you to find the right property and take the headache
out of property searches especially if you do not speak the language.
However, a warning, think hard before going it alone without the help
of an estate agent. In reality, buying privately will mean months of
chasing people and worrying that you have not done everything you
should. However, if you do buy privately, then be very careful.
2. Nothing beats good legal advice
As with using an estate agent to look for the right property, make sure
you have the right lawyer when making your final purchase. A good agent
will recommend a local lawyer who speaks English, who knows the area
and all its regulations. It is amazing how many people are willing to
buy something abroad without the use of a reputable lawyer. It is
something they would never dream of doing in the UK.
3. Location, Location, Location
Remember the words of hotelier Conrad Hilton who, when asked what were
the three keys to success, famously replied, Location, location,
location. Fifty years later not only is it still true for the hotel
business, but also for buying a home with resale value.
As in the UK, where you buy counts just as much as what you buy. Narrow
your location choices to just a few places and think of resale value
when considering a property, and will it make a good rental? Make sure
necessary shops and services are located nearby and try to make sure
surrounding properties are of a similar standard and size. In addition,
try to get something located near the town. Remember, buying the least
expensive home in the best location is better than buying a beautiful
home in an undesirable location.
4. Do your homework
Buying property abroad is an exciting experience; however, one of the
biggest mistakes investors make when it comes to buying property in a
foreign country is failing to do their homework. You cannot do too much
research into an area. Spain is a big place so first settle on a
region. If it is unknown to you, try to visit the area as many times as
possible so you can glean more than just one impression. Looking for
property online and in newspapers and magazines should always be part
of your strategy as it vastly increases your chances of finding what
you want. If you are looking for property online, begin by making your
initial searches as broad as possible. You can always narrow your
searches later. Careful local research before you commit to buying can
save much heartache later.
5 Stay Focused and do not be hasty
Stay within your budget and keep focused on what you originally had in
mind, it is all too easy to be tempted to buy something that is not
what you really want. While you want to cast your net as wide as
possible so that you do not miss your dream home, you do not want to be
wasting time viewing property that is wholly inappropriate or
completely unaffordable.
Therefore, you should draw up a realistic and accurate wish list.
However, you must go looking for your home with an open mind. You will
soon realise that it is virtually impossible to find exactly what you
want, so you may need to compromise on some issues, you prioritise your
requirements.
6. Know why you are buying
Make sure you know why you are buying and what it is that you are
seeking to achieve with your purchase. Is it a holiday home, a
residential home or an investment. Are you looking for short-term gain
or regular long-term income?
If buying for investment, it is vitally important that you understand the risk factor and you are comfortable with it.
7. The bigger house is not always the better.
In any residential development, houses vary in size but if you are
looking for maximum resale value do not always choose the largest house
on the block. When determining market value, the homes nearest to yours
are most important. If most of the nearby homes are smaller than yours
then they can act as a drag on appreciation. On the other hand, if you
buy a small or medium house in the development, the larger homes can
pull yours up in value
Do not assume that the more bedrooms you have the better the property
is. Two and three bedroom properties have the quickest sell-on value
and you should try to stick with this when buying. Two bathrooms are
necessary and as most will tell you, a large kitchen is the heart of
the home.
8. Money, money, money
The simplest fact is can you afford it? Stay within your budget,
consider what you are buying, and allow for extras. The cost of buying
a property in Spain is much higher than in the UK, (VAT, lawyer's fees,
and taxes), so you must budget accordingly. Consider the pros and cons
of buying abroad and always factor in costs including existing
commitments and future expenses.
Buying a home is a rewarding experience but remember to invest in the
location of your home first. Research is key in buying abroad and you
have to have patience and time when making such a huge investment. If
you remember that location is the primary factor in property, your
money will continue to grow through the years and earn you your share
in the property world.
9. Check the transport links.
Make sure there is a choice of budget airlines, and if possible more
than one airport. Check out the road infrastructure. People who rent
property will want somewhere that is easy to get to and will often be
attracted to those places with a nearby airport served by low cost
airlines. Budget airlines have opened up huge areas of Europe, but do
not assume they will always be there. What would happen should the
airline close down the route?
10, Check the taxation and inheritance laws
Make sure you understand the tax implications involved should you
decide to sell. In addition, if you want control over how the property
is dealt with on your death and avoid any restrictive rules, then check
out the inheritance laws, it is likely that you may need two wills one
for any assets in Britain and one covering your property and savings in
Spain.
Tony Roberts has lived in south east Spain since 2001. He is now an
established estate agent in the region of Costa Calida and has written
a free e-book "Buying a Property in Spain", to receive your copy
contact Tony at http://www.pocomed.com
