What are the risks of investing in real estate in Spain?
You might expect our team here at BM Sotogrande to be great enthusiasts for the notion of purchasing the finest property Sotogrande has to offer, and we are!
We are also, however, responsible professionals, and we wish your experience with this beautiful part of the Costa del Sol to be only the very best.
With that in mind, we felt many of our readers would appreciate us coming up with a rundown of some of the risks associated with investing in real estate – both specifically in Spain, and more generally.
So, what key risks should you be mindful of before committing to buying property in Sotogrande?
Buying a property for the wrong reasons
Many of the common issues that arise around the purchase of real estate – in Spain or elsewhere – are attributable at least partly to the buyer being less than clear about why they are buying property in the first place, and what their requirements and expectations are.
So, before you firm up your interest in any of the highly desirable property Sotogrande can offer you, it is important to determine your main objectives.
Are you, for instance, looking to buy an apartment or villa in this area of Andalucía so that you can enjoy a rewarding new lifestyle in sun-drenched surroundings? Or perhaps you are doing so for investment, with an expectation of renting out the property to others?
Prospective buyers must also be reasonably sure about the type and size of property that would best meet their needs and desires, as well as whether they would prefer a rural or urban location, among many other factors.
Failing to spot construction defects
Both newly built and older properties in Spain and elsewhere can, unfortunately, be good at hiding construction defects that may significantly alter the attractiveness, marketability and usability of the property in question.
At the very least, then, you should seek the help of a professional architect to carefully check the property for classic signs of problems, such as moisture and cracks.
Unforeseen legal issues
Different types of Spanish property can be subject to various legal conditions that could impact on your freedom to use the dwelling as you wish.
If the property is a newly built one, for instance, you should ensure there are no pending urban charges on it, as well as that the property has, or is set to obtain the first occupation licence. You must also ascertain that the developer has purchased the mandatory damage insurance required in accordance with the Spanish Building Regulation Act (Ley de Ordenación de la Edidicación).
Second-hand properties, too, can bring certain legal risks. It is crucial to verify, for example, that the property is not occupied or leased. In the event of the latter, the change in ownership would not change the fact of the lease continuing for the period the lease contract specifies.
Moreover, under the Spanish Lease Act (Ley de arrendamientos urbanos), certain tenants have the right of preferential acquisition in case of a property being sold while they inhabit it. The Land Registry probably won’t record the lease contract, so it’s a good idea to state in the purchase contract that the property does not have any occupants or tenants.
Hopefully, the above honest guidance on some of the issues that can present themselves to Spanish property purchasers will not deter you from investigating the plentiful and highly desirable property Sotogrande has for sale! Instead, our intention is to equip you with awareness of important matters if you do begin to invest in real estate in the Costa del Sol.
Get in touch with our team now or visit us in person, and we would be delighted to assist you further with the first steps of your Sotogrande property journey!
Blog Post 08/01/2021