why buy a property in Spain?

Buyer’s Guide to Golf and living in Southern Spain

Why southern Spain?

There are many reasons people choose to visit or live in southern Spain and specifically the area surrounding Marbella. Ask any cross-section of people in any number of places along the coast and the one resounding reason you will hear time and time again is GOLF. The exceptional weather and sheer number of courses mean that you could play twice a week for a year and never encounter the same hole more than once.

The Costa del Sol is proud to have hosted the Ryder Cup and many other competitions on its award-winning courses, designed by the golfing greats. What golfer can resist rising to the challenge posed by Valderama, arguably the most famous course on the Costa del Golf.

Indeed southern Spain is a mecca for golfers from all over the world. The constant development of new courses proves that golf is an intrinsic part of many of the holidays taken here every year. But why should that make golf property ownership a sensible option?

The answer becomes clear when you consider the bigger picture. What else does the coast offer and what is it about the geography of the area that means that real estate is always likely to rise in value?

Guidebooks describe picturesque white villages, barbequed beach food, and bougainvillea cascading down white-washed walls like a waterfall of crimson. Andalucia is a special place, rich with towns seeped in tradition, fascinating cultural sights and awesome coastal beauty.

However, we also want you to know that the Costa del Sol is modern, vibrant, cosmopolitan and busy. Traffic is heavy, parking is a challenge and a building site is never far away. Indeed it is this that makes it all the more viable as a home away from home. While many holiday destinations all but close during the winter months Marbella offers excitement all year round.

You will often hear people enthusing about the out-of-doors lifestyle available in southern Spain. With its sunny, sunny days and an exhaustive list of activities and attractions it is indeed realistic to spend far more time out than in. All the vitamin D coursing through your veins is sure to banish the winter blues you might normally experience when the days grow shorter. In fact, you might come to love the rain for the novelty it provides.

One of the most charming aspects of living on the Costa del Sol is its ability to surprise and delight. One can emerge after dinner from a cobbled side street in Marbella’s old town to be confronted by a spine-tingling performance of opera; or wander the beach and come upon a chiringuito where pot-bellied pigs and goats snuffle the sand.

The Spanish tradition of celebration means that a special event is never far away; whether it is children dancing flamenco in a village square, the Three Kings showering the streets with Christmas sweets or the infamous local fair where everyone heads for the plazas and drinks for Spain. The lively sociable spirit of the Spanish guarantees a warm welcome to all, visitors and locals alike.

It takes time to get to know and love a place and the Costa del Sol will not disappoint. Many people visit year after year before opting to buy their own place in the sun. However much time you invest in southern Spain it will continue to reward you with new places to explore and delights to discover.

Will my investment be safe?

In the last decade property on the Costa del Sol has boomed. Although the market has slowed to a more sustainable level in the last few years, the forecast for the future is continued growth as more and more people choose to live, work and holiday in and around Marbella.

A European Commission report states that between 800,000 and two million European families will buy a home in Andalucia over the next five years, of which the majority prefer the Costa del Sol. According to a report conducted for Sainsbury’s Bank Travel Insurance an extra six million Britons are expected to own property abroad by 2020. As about half of British overseas buyers choose Spain it bodes well for the financial future.

What do these facts and figures mean for you?

Facts and figures are a helpful indicator of future trends in the property market but we believe simple logic and common sense work just as well. If we take the following as fact it is easy to understand why demand for property in southern Spain will increase in the future as surely as supply will decrease.

Wonderful weather, a healthy outdoor and sociable lifestyle and the opportunity to work, or indeed bring your work with you, means that a good quality property on the Costa del Sol is and will always be a sought after commodity. The close proximity of the mountains to the sea limits the land area available for development therefore ensuring that prices remain strong. One thing that can’t be created on the Costa del Sol is more land.

This doesn’t mean that we will encourage you to buy any property available. We believe in careful scrutiny of location, quality and value before recommending a property. We know that a dark, damp, badly designed property will not sell however buoyant the market and this knowledge is central to our success. We are not a huge company selling multiple units to names on a computer. We depend on building a good reputation by finding quality property for our clients.

How much will it cost?

Before you arrive in Spain, you will probably have some idea of the type of property you would like and the area or golf course where you would like it to be. The more information you can give us the more efficient we can be to find suitable properties for you. It is also important to come with an open mind as in our experience the property that seems perfect on paper is not always the one that you fall in love with.

We also recommend that you be realistic. If you expect the perfect property on the 18th hole to be yours for a few thousand euros you are going to be disappointed.

Remember that when purchasing a Spanish property you will need additional funds to pay taxes and fees. Usually 10 – 11% of the cost of the property is sufficient to cover these.

Many factors will determine the type of property you desire but ultimately most people have a budget that restricts them from buying a fairytale mansion in the hills. The following is a price guide to properties on the Costa del Sol. It is only a guide and obviously will not be correct for all properties.

? 200,000 – 300,000 euros will buy a 2 – 3 bedroom apartment with golf views.

? 300,000 – 450,000 euros could mean a luxurious apartment or a 3 – 4 bedroom townhouse on a golf course.

? 450,000 – 600,000 euros could buy a large, luxurious townhouse or semi-detached villa with a large private garden, a super quality apartment or possibly a villa with 3 bedrooms, a garage and a pool in a plot of less than 1000m² all with access to golf.

? 600,000 – 900,000 euros will buy a good quality, large villa with a sizeable garden or a super-smart apartment or townhouse with magnificent golf views.

? 900,000 – 1,500,000 euros is sufficient to purchase a large villa in a prime location or a penthouse apartment with every conceivable extra known to man or property developer.

? 1,500,000 euros and upwards. There are some gorgeous properties in southern Spain worthy of such illustrious sums. Mansions, estates and even castles are waiting to weave their magic on those of you looking at some of Spain’s finest real estate.

Should I buy off-plan or resale?

There are advantages and disadvantages to buying both resale and off-plan properties. It will depend on your individual preferences as to which option will be most beneficial for you.

Buying an off-plan property has the advantage that you will be the first inhabitant. You may have the option to choose the decorative finishes to ensure your property reflects your personal tastes and there will be no need of any renovations. However, you might have to wait up to two years for your property to be completed. For some people this is an advantage as, for example, a retirement property can be secured in advance of retirement in two years time at a price that reflects current market value.

The main advantage of buying off-plan is financial as only a percentage of the cost need be paid to secure the property, yet capital gain is achieved on the total value of the property. Upon completion your property will have increased in value making buying off-plan a solid investment option. You will also receive a 10-year guarantee on your property.

However, it is harder to fall in love with a plan than an actual property. Buying off-plan is a bit like a blind-date; you might be surprised and delighted or perhaps feel slightly let down. If you prefer to know exactly what you are getting and want to make use of your property right away, a resale property may be your better option.

We have a huge selection of resale properties from Malaga to Sotogrande on or overlooking every golf course. We will find the special few that match your requirements, having questioned you for your preferences, and allow you to see them for yourself. Being able to visualise yourself and your family in a property can help you to decide if it is the one for you.

A disadvantage of buying a resale might be the extra costs of refurbishment or perhaps the disturbance of building work near by. However, many resale properties come with furniture and occasionally the need for a quick sale results in a bargain price.

If you are planning to buy to let you may prefer a resale property to ensure returns on your investment right away. We have many properties for sale in suitable locations to achieve high rentals as golfing holiday lets.

If you are at all unsure about any of your property options in Spain do give us a call or drop us an email and we will do all that we can to help you decide which option is the right one for you.
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Finding your property

Your research is finally over and you are ready for the fun to really start. It’s time to hunt down your ideal property.

You may like the first that you see but it is always a good idea to look at a few properties so that you can make comparisons. We want to find the best property that we can within your budget and the more houses you see the more sure you will be when we do find the one.

Having found your future property it is time to make an offer. We can negotiate with the vendor on your behalf to agree a fair price but remember that while some vendors may accept a lower offer, many will hold out for their asking price.

You will need to pay an initial deposit of 6,000 euros at this stage, which fixes the agreed price, confirms your intention to buy and means that the property is taken off the market and reserved for you.

The vendor’s lawyer, who will issue you with a receipt, holds the deposit. It is usually non-refundable although sometimes the vendor will accept a deposit subject to finance. This means that if you need a mortgage to proceed with the sale and are refused, the vendor will return your deposit. Should you pull out of the sale for any other reason you will loose your 6,000 euros. If the vendor decides not to sell to you, your deposit will be returned in full.

Obtaining a mortgage

If you require a mortgage and prefer to use a Spanish lender you will need to provide proof of your ability to repay the mortgage. Although terms and conditions differ from lender to lender you will usually be able to borrow up to 80% of the value of your property repayable over 10 – 30 years depending on your age. Generally your repayments must not exceed 35% of your net monthly income or joint monthly income if two people are applying for a mortgage. It may be possible to arrange an interest only mortgage or interest only payments for a fixed period.

As with many things it is important to select the mortgage that is right for you and your personal circumstances. It might be that you prefer to raise capital in your home country before arriving in Spain. Do let us know before you arrive in Spain if you require a Spanish mortgage so that we can ensure you bring with you all the necessary documentation and put you in touch with an expert.

Acquiring a lawyer

Having paid an initial deposit, you will need a Spanish lawyer. We recommend that you select someone with local knowledge who speaks your language. Your lawyer will carry out numerous checks to ensure that your chosen property is indeed owned by the person selling it and that it has been marketed correctly. Your lawyer will ensure that there are no undeclared debts owing on the property and that all service bills are paid up to date. Using a lawyer safeguards your investment and means that when you receive ownership of your property you will not inherit any outstanding debts.

If you are purchasing an off-plan property your lawyer will ensure that the developer has an insurance policy or bank guarantee in place ensuring that should the purchase not go ahead at the fault of the developer, your money plus 6% will be returned.

Typically a lawyer will charge 1% – 2% of the purchase price of your property plus VAT.

Exchanging Private Contracts

Upon confirmation from your lawyer that all is as it should be you will exchange private contracts with the vendor. The contract will set out the legal description of the property, the price, terms of payment and the obligations of both parties.

Signing usually takes place two weeks after payment of the initial deposit. Do ensure that your mortgage lender has agreed in principal to your mortgage, as you must now pay a deposit of 10% of the agreed property price. Should you be unable to proceed with the sale for any reason your money is non refundable. If however the vendor fails to complete the sale all money is refundable plus compensation.

Signing at the notary

The final stage of your purchase will be formally completed before a Public Notary when the vendor signs the property over to you. You will make your final payment and receive the keys to your new property in exchange.

You lawyer will ensure that all costs pertaining to the property purchase are paid including 7% transfer tax or 7% VAT plus 1% Stamp Duty if you are buying from a promoter or developer, notary fees which may range from 300 – 1500 euros depending on the price of your property and registration of the property normally 60% of what the notary charges.

The vendor usually pays a tax called Plusvalia, however it may have been stipulated that you are responsible for all costs as a condition of the sale. You will have discussed this during negotiations with the vendor and in consultation with your lawyer. This tax may range from a few hundred to several thousand euros as it is calculated on the increased value of your property since it was last sold.

Finally, you can move in and enjoy your new home.

If we can provide you with any ongoing assistance let us know. We can help you to furnish your home, find electricians and builders, arrange Spanish classes, recommend schools for your children or obtain residency. In fact, if you have questions about anything, give us a call. We will help in any way we can to make Andalucia feel like home.