When looking for an attractive property for rent, holiday or retirement, it is natural to turn to the cheapest offers, often intended for renovation. However, the joy of finding a comfortable, affordable accommodation should not lull our vigilance, as there are several pitfalls that might occur. Why are houses in need of revitalisation so popular and what to look out for before finalising the transaction and picking up the keys?
Properties in Spain still attract great interest. In spite of the seven years that passed since the major economic crisis in Spain, the country consists of many cheap - and rapidly taking on value - houses and flats, available at your fingertips. In addition, Spain continually tempts investors from other European countries (especially the British) with its excellent weather conditions for most of the year and the prospect of relaxing on its famous beaches.
The Spanish property market has also attracted the interest of investors looking for opportunities to earn a high and relatively fast income. Why? It is thanks to the systematic increase in house and flat prices, remaining at a constant annual level of 3-7%.
Many of those investors started to deal with seasonal or year-round rentals -generating considerable profits due to the high interest of tourists. In addition, Spain is still struggling with too few hotels, occupied for weeks or months ahead. The attention of travellers has therefore turned to private landlords.
Flipping, i.e. searching for bargains and quickly reselling a house at a higher price, is one of the most popular ways of investing in the property market - also in our country. Rehabbing is also in high demand. It takes place when we look for low-cost flats in order to renovate them and increase their value.
It should be emphasised that this form of earning money creates certain risks, exposing us to losses. Example? An overhasty analysis of technical condition. For example, a crack in the ceiling, which an inexperienced builder may think of as a job that only needs plastering, may turn out to be a more serious crack in the concrete ceiling during the course of the work and be very expensive to repair. An expert assessment of the technical condition of a building is the absolute basis for making our investment profitable.
Attention should be paid in particular to important structural elements such as the roof and ceiling, the condition of the façade and electrical, heating and water installations. A villa on the Spanish seaside available at a fraction of its value will therefore not necessarily be profitable due to its very poor technical condition.
There are many advantages of investing in flats for renovation in Spain. In a nutshell, the biggest pros of such a solution are the following:
Given Spain's location and the prices of property there, it is still a very good place to invest. For many clients, the search for gems for renovation has become a way to invest capital and a passion for generating large and stable financial returns.
Disadvantages? Sure. Buying a house for renovation increases our investment risk. For example, the time needed to carry out the necessary upgrades can be significantly extended. In some cases, the revitalisation may prove to be completely uneconomic or even impossible, which, if the condition is poorly assessed before purchase, will put us at the prospect of incurring large losses. In such a situation, the only chance may be to demolish the house and build a new one or to sell the plot. These problems can be avoided by using the services of reputable real estate agencies who know the Spanish market very well and work with construction specialists.
The simplest and by far the safest way is to use the services of real estate agencies, which look for attractive opportunities for their clients. It is important that our intermediary has extensive experience and knowledge of the Spanish law and market.
Buying property from bank auctions in Spain is also an interesting option. Such a solution is very tempting due to very attractive prices (much lower than the market prices). In this case, special attention should be paid to the debts of the previous owner. However, homes with complex legal situations should be avoided. You need to remember that there are still many houses burdened with debts, the repayment of which - in the event of purchase - becomes our responsibility. Visiting the court and obtaining the property records will therefore be a must in the event of an auction.
Consulting specialists before purchasing property is an absolute must. So if you are attracted by the countless advantages of sunny Spain and houses for renovation at exceptionally low prices - contact us! The real estate agents at tripinvest have been helping clients to find their dream homes for years. They will answer all your questions and guide you through the entire process seamlessly. From getting to know your expectations, finding the perfect home, helping you obtain a mortgage and handing over the keys. Feel free to call us!