At the moment, it's a buyer's market in Spain. Prices are probably as low as they're likely to go, and people desperate to sell are throwing in extras like a car with the property, or membership to the local golf club. That said, it may not be in your best interests to buy, so how do you decide what to do? Here's a breakdown of the plus points for buying and renting in Spain in 2013.
Buying
For some people, buying is the only way to go. They want something to call their own, and to pass on to their heirs when the time comes. You should considet buying in Spain if you have liquid assets and therefore will not need a mortgage or any other sort of finance from an outside agent to buy a property.
At the moment, it's possible to buy any type of property for around half the price in Euros you would have paid five years ago. Also, there are so many properties on the market you can probably broker a deal to get the place you want for the price you're prepared to pay.
Even if you don't intend to live in your property or rent it out, you're buying at the bottom of the market, and interest on savings is very low. If you can hold out until prices rise - which inevitably they will - you'll realise a much better return on your investment by putting your capital in bricks and mortar.
Renting
Because there are so many properties on the market, and prices are low, many owners are looking at long term lets to keep up the cash flow until the property market gains ground. There are good deals to be had, and long term renters can apply to become permanent residents and enjoy all the benefits that come with that status.
Renting is a good option if you're not sure which area you want to settle in, or if you need to sell a property in another country before committing to buying in Spain. If you're renting, you're flexible - if you don't want to settle in a particular area, or your circumstances change, all you need to do is give notice as per your rental agreement and you're free to move on.
Maybe it's not something you want to think about, but what happens if your partner dies or becomes seriously ill? It's not a problem if you intend to stay in Spain, but if you need the support of your family, or want to return to your home country, it's much easier to do so if you're renting. You don't have capital tied up in Spain, and you don't need to stay to oversee the sale of your property. And it's one less problem to cope with at a very stressful time in your life.
If you're not working in Spain - maybe you've decided to retire here - renting means you have no personal tax liabilities to sort out, so you don't have to pay an abogado to sort out your fiscal affairs. It can be much more simple to rent rather than to buy. And if you're in your 70s when you move here, it may make more financial sense to invest the proceeds from the sale of your property in your home country and rent in Spain. Renting is not such an attractive option for a young family with school age children who may be looking at 10 - 15 years before they can consider a move.
When it comes down to it, you have to do what is best for you. We never considered renting, because we didn't realise how simple it could be, as opposed to buying a property. Although we're delighted with our garden apartment, I think if we'd have been better informed, we may have chosen to rent rather than buy. Tony - my husband - was 74 when we sold our house in the UK, so renting may have been better, particularly as we bought at the top of the market. Still, as we're not looking to sell, it doesn't really matter what the market is doing, does it?
.JPG)