What Is A Bargain In Spanish Real Estate?

What Is A Bargain In Spanish Real Estate?rnProperty BargainsrnIn Spain, it is difficult to define a ‘Spanish Real Estate Bargain’. Professionals agree that a bargain should be a combination of a good price, good location and good finance programme. A bargain should be a Spanish property sold at not more than the market price.rnHow can we define a property bargain in Spain? rnDefining a Spanish Real Estate bargain is not a science, but nevertheless, our statement is that a bargain in Spain should satisfy the following criteria: • A bargain should have a selling price lower than the selling price of other similar properties in the area, at the time. • Property in Madrid should be well-situated. Beware of badly located properties in Spain. Don’t become over-passionate with the building layout and property specifications. These must be balanced with property’s location, which should ideally be in or near an area having all the usual services and amenities and transport links. • The value of the mortgage, or ‘Loan to Value’ (L.T.V.) should be between 70% and 100% (if required), which is already a good rate for spanish real estate industry. However, it is important to remember that a cheap apartment or apartment with an L.T.V. of 100% is not necessarily a bargain. Things To Have In Mind Before Searching For A Bargainrn• Before buying, be ready to see a lot of properties. During the property boom, home buyers would visit 4 or 5 properties before buying, whereas nowadays they may have to visit up to 50 different properties. • Be clear about what your goal is, in buying a Spanish Real Estate asset:rn1. Is it for a permanent residence? If so, then you will have to carry on with all the expenses.rn2. Is it a temporary second residence? In that case, are you going to be able to sustain the costs of the home when you are not there? If not, then you will be able to save on your mortgage for a few months, when you let it during those months.rn3. Is it going to be a Buy-to-Let investment? Any Rental Yield (the profit dividend) above 4.8% can be considered an optimum yield in spanish real estate nowadays and this could reach up to 8% in certain areas.rn4. Is it going to be a Buy-to-Resell investment? Generally speaking, it will take considerable time for the price to pick up. Your buy to resell strategy should be for the mid to long term.rnDo not purchase by yourself without a legal adviser - you may end up embroiled in a messy rnprocess and lose some money so that your bargain would become a liability.