1. List your home on the UK’s largest holiday lettings website www.holidaylettings.co.uk The cost of listing on this website will be covered with your first rental. Make sure you have really good pictures and a detailed description that really points out the benefits of your property and its location.

2. List your property with a good local rental agency. Check to see what exposure they will give your Spanish property, but they should have good local knowledge and be experienced in attracting new customers for you. Your selling agent should be able to recommend someone.

3. Create your own website dedicated exclusively to your property
You will have a space where you can really go to town with detailed information about your property in Spain. Fill your website with the best pictures of the property and area you can. Send an email to your friends to let them know about your property and give them a link to your website. Ask your friends to send it on to their friends.
Creating a website is not as difficult as you might imagine. Of course if you don’t know how or don’t want to learn how, you could always pay someone. Around £450 should get you a basic set up.

4. Get that ‘Niche’ Appeal Could your property appeal to a particular market? Maybe the property has good disabled access or is close to a diving centre? Find the ‘niche’ then look for forums on the internet. You may be able to advertise your property for a small fee or even free if you become a regular user of the forum.

5. Include those little extra touches Sometimes the difference between your property getting the booking and another is the little extras. So many people who try and rent their property have the attitude that “it’s not worth spending on the property if we’re renting it out” This couldn’t be more untrue. A nice BBQ set up, board games or playstation can make all the difference. Why not speak to your favourite local restaurant and see if they will sell a “menu del dia” voucher that you could include for all your bookings? That extra touch will pay for itself in no time and guarantee you valuable repeat bookings.

6. Get to know your neighbours Wherever you buy your property, the chances are you will have a good mix of holiday home owners and those living in Spain full time. Those living in Spain permanently will at some point or another be looking for a property for their own friends or family to stay in. This word of mouth marketing is very effective and will cost you no more than a bottle of wine every now and again.

MASA International can help and advise you on making the right choice when you buy your property in Spain and also help you set up an effective rental solution.

Part of your plan to have a home in Spain may include receiving some income from rentals. If receiving rental income is in your plans then careful consideration to the location and property type is essential if you are to stay ahead in the extremely competitive holiday rental market.

If you are buying a holiday home for mostly your own use

1. Always give priority to your own needs rather than what’s perceived to be the best option for rental yield. For example, that 2 bed 2 bath apartment on the golf course may be ideal for year round income, but if you and your family have no interest in golf, is it going to be the best choice for you?

2. Don’t get caught up in worrying about what the property will be worth in 15 or 20 years time. You’re going to get years of great times on holiday using it in the meantime.

3. Go with what feels best for you – don’t have your head turned by promises of emerging markets or areas that won’t have the facilities you need right now, but buy where you and your family actually would enjoy spending a great deal of time on holiday.

If you want to buy a property in Spain mainly for profit

1. You don’t always have to ignore your own feelings and tastes – advice from your agent is useful but what feels right for you is probably right for others too.

2. Do give more consideration to the capital growth prospects of the property over rental yield – capital growth will be massively more important to your overall profit.

3. Don’t forget, renting your home to holidaymakers may make you give you a good return, but it won’t necessarily be the important factor if you choose to sell the property.

If you are somewhere between the two above

1. Make sure you get the balance right between buying for profit and making the right choice for a holiday home for you

2 Never compromise on the location of the property in Spain. After all, it’s you that’s going to need those all important holidays.

3 Give some consideration to things like the length of season, ease of access from where you and target market live. These factors will have a big affect on your rental return.

1. Understand the differences between the UK and Spanish property market

In the UK it is fairly standard procedure for a vendor to listen to an offer of around 95 per cent of the asking price. It’s all fairly predictable and a given that even in a good market the asking price is rarely the ultimate sale price, but equally rarely is it under 90% of the asking price. Property prices in Spain are in general far less predictable. Some vendors price their properties with the expectation of ultimately selling for several thousands of Euros less, some give all their discounts (sometimes as much as 30-35%) upfront and show the reductions openly to viewers of their property. Equally it is perhaps surprisingly common for those selling property in the first line or very close to the sea not to sell for a Euro under the asking price. The one size fits all UK style strategy of negotiating a 5-10% discount is not necessarily going to be the key to the best deal on your Spanish property.

2. Be Informed

Find out how long the property has been on the market and more importantly how long at the current price. A property that has been on the market for a year at the same price is probably overpriced. On the other hand a property that has been on the market for a year and has just been reduced by 30% could well be bargain waiting to be snapped up. Your Agent/Property Advisor should be well placed to know what price a builder is likely to accept. Use this knowledge to your advantage so you can rule out viewing any properties that are not going to fall within your budget.

3. Sell yourself

Owning a property in the sun is something almost everyone has considered at some point. However tough the market is, the dream of a place in the sun is as popular if not increasingly more popular today as it ever has been. Vendors and in particular builders are very much used to seeing a procession of people viewing their properties before they are in a position to buy. Many make offers and try to negotiate a purchase price long before they have arranged finances or have the cash in the bank. Vendors simply do not take this type of buyer seriously and tend not to waste much time considering the empty offers, even if they do remain polite and courteous so as not to upset the viewer on the off chance they may return one day as a buyer.

Present yourself to the seller as someone who has all their finances in place (if only an agreement in principal from the bank) or has the necessary money in the bank, be clear that you are ready to seal a deal while you are in Spain, re assure the seller that you are reliable, ready to complete quickly and you make yourself a very difficult prospect to walk away from.

4. Get your goodies

Some builders even now are reluctant to publicly reduce their prices. They will often, on the other hand, be responsive to a suggestion that they include gifts in the sale such as furniture, air conditioning or even a private pool. The value of these gifts can easily add up to a sizeable discount and sometimes importantly for the developer,the price that the house sells for will still be the advertised price.

5. Know your limits

Before starting any negotiation, decide on the maximum price you will pay and don’t move from it. This is a decision to make before getting caught up in the emotion of the moment. Don’t advise the seller of your price limit until you really have got to that point. Once you have reached your bottom line, make it clear you can’t go any higher and this is your final offer. This will save you lots of time in the event of your offer not being accepted and will allow you move on to other properties.

6. Make it clear you have other options

It’s a good idea to mention that you are considering other properties. Combining this technique with other the tips can often give you an advantage when negotiating with builders/sellers.

Your MASA Property Advisor will help you put these tips in action and negotiate with builders/sellers on your behalf, under your instruction. If you are buying through MASA you will benefit from a ‘Lowest Price Guarantee’, so you can be sure that the builder is not selling the property cheaper anywhere else.

Part of the financial planning ahead of buying a property in Spain, should be to budget for your ongoing costs after you have taken possession of your home.

Naturally exact costs will vary from property to property, area to area and in the case of utilities will vary according to usage.

Here’s a brief outline of the main areas of expenditure you will encounter.

Community Fee

Owners of properties that are part of developments that share communal areas are obliged by law to form a Community of Owners or Comunidad de Propietarios to give it the correct title.

Being part of a ‘community’ will mean paying community fees for the upkeep of the communal areas such as pools, green areas,lighting, and any other services that the community has voted for. The amount your community fee will be will depend on how much common area and facilities there are to look after.

Each year a budget for the communities expenses is approved by a vote from all owners (or chosen representatives) who attend the annual general meeting of the Comunidad de Propietarios. Expect to pay 30-60 Euros per month. Your agent or Property Advisor will be able to give you an accurate figure when you start your property viewings.

Electricity

An average family would pay somewhere in the region of €20-30 per month. This amount could rise by 30-40% for the summer months if you use air conditioning.

Gas

Again, this is charged completely on usage. Some properties are 100% electric so no gas required. A family of four would use somewhere in the region €20-25 a month. Naturally, you won’t pay anything if you’re not using gas while the house is empty.

Water

There is a standing charge for water bills, although the amount you pay is directly linked to the amount of water you use. Expect to pay around €20 per month and that would be full time living.

Buildings and Contents Insurance

Of course this very much depends on what you need to insure. Allow around €150 euros per year for an average 2 bedroom property with no original Picasso art on walls.

Local Rates

Similar to UK’s council tax in that it’s for refuse collection, street lights, street cleaning etc. Not similar to the UK in that you probably won’t pay more than €100 per YEAR.

So there you have it, not so expensive to run a house in Spain is it? Maybe you’re thinking about moving here lock, stock & barrel now?!

Before you complete the purchase of you Spanish Property

You should make a final visit to the property, just to check everything is in order. In the case of a new property, a snag list should be made to present to the builder.

NIE Numbers

You will need the NIE numbers before you can sign at the notary. This process involves going to your designated Police Station with the correct paperwork and identification. Although you can do this yourself, I would strongly recommend using a Lawyer, as any mistake in the application could delay the completion of sale.

Completing

The purchase of your home in Spain is finalised before the Notary, with the purchaser and seller signing the ‘Deeds of Sale’. The Notary is an appointed public official and his/her duties include verifying the identity of the buyer and the seller, ensuring that all of the necessary legal requirements have been met, and that the monies due have been be paid. If you are not able to be present when the deeds are finalised, your lawyer can sign on your behalf, if you have given them Power of Attorney.

Taking possession of your home in Spain

Once the title deeds have been signed, you will be handed the keys to your new place in the sun and you can take possession. Cava time!

Shopping!

Now you have the keys to your property in Spain, you might need some furniture or other goodies you have had your eye on. Don’t be tempted to order anything until you have the keys firmly in your hand though.

Property Registration

Property Registration happens once all the relevant taxes have been paid, and the Title Deeds have received the final register stamp. This guarantees the successful transfer of the property to you. Note, that it can take several months for this to happen, and for you or your Lawyer to receive the Title Deeds. The speed at which you receive them will depend upon the individual Property Register. Your Lawyer will let you know as soon the Title Deeds have been received and that they are ready for collection.

In additional to the sale price of your Spanish property, you will need to budget for additional costs that are associated with purchase.  Most, if not all of these costs are paid when you complete on the sale.

Now, I can’t stress enough that this merely a guide for costs. Your agent and/or lawyer will be able to give you a much more precise figure once you have identified a property that you would like to buy. As a general rule you should budget 10 – 12% on top the sale price if you are not taking a Spanish Mortgage and 12-13% if you are arranging a mortgage through one of the Spanish banks. The additional costs will be made up of legal fees, notary fees, land registry, stamp duty and VAT (in Spain this is called ‘Impuesto sobre el Valor Añadido’ or ‘IVA’)

A guide breakdown of the purchasing costs and expenses, as follows:

Notary Fees

These are calculated on a scale of fees which are related to the property purchase price.

Property Registration Fees (Land Registry)

These are normally around 40% of the Notary fees.

Legal Fees

This of course depends on the Lawyer you use. Lawyers fees will average around €2500 but may be charged as a percentage of the purchase price.

Mortgage Legal Costs.

You will need to advise your agent and lawyer if you intend to use a mortgage to complete the purchase of your property as additional charges are usually incurred from the bank.

Administration fee

This is currently €495

Water/Electricity Contract.

A is fee charged by the utility companies for the set up of the water/electricity contracts. This fee will vary from area to area but should be in the region €420

Transfer Tax (Resale Properties only)

This will be 7% of the purchase price

IVA Tax (New properties only)

This is the Spanish equivalent of VAT and will be 7% of the purchase price

You wouldn’t dream of buying a property at home without using a Lawyer would you? Unfortunately, some people have and still do choose to cut this vital corner and decide not use a Lawyer when buying a home in Spain, and we already know the problems this could cause. If we discount the possibility of not using a lawyer, then there are two options to think about.

Choosing a lawyer in your home country

There are lots of lawyers in the UK (and around the world) who will have the conveyancing of Spanish Property added to their list of services. For a start they speak English which is a must, they may be local to you, which could be useful for peace of mind. The downside to using a lawyer in the UK to do the conveyancing of your Spanish Property, is that all the legal checks and paperwork need to be done in Spain. The notary, land registry, NIE Issuing Station, etc are all in Spain. This invariably means your UK lawyers will ‘outsource’ the job to a local lawyer and add his/her margin on the top. Using a lawyer based is the UK will almost certainly be the expensive option.

Choosing a lawyer in Spain

An English speaking lawyer is Spain is naturally very important. Ideally the lawyer should also have a long history of property conveyancing in the area you intend to buy. Check that they can offer you a complete package of services such as conveyancing, NIE Numbers and a Spanish Will. Fees are worth checking too. Expect to pay around €2500 on average for a complete property service.

Power of Attorney in Spain

A Power of Attorney (“poder” in Spanish) is a simple and widely used way of completing transactions in Spain by authorising a trusted representative, such as a Spanish Lawyer, to sign relevant documents on your behalf.

Using a Power of Attorney to act on your behalf and can be very useful, particularly if you have found a property that is ready to move in to but don’t have the time to come back to Spain to complete yourself. Even if you do have the time to come back, you will find that various forms need to be completed and contracts set up between the time you choose the property through to the day you move in.

Your Spanish Power of Attorney will usually be given very broad powers to deal with the property purchase transaction. For example, a power of attorney will often include clauses allowing the attorney to open bank accounts, set up direct debits, make payments to and from the account, set up utility contracts, pay taxes and submit necessary forms and notifications etc.

This generic instruction is the most practical way to operate as you can imagine how inconvenient it would be if the buyer had to authorise each document or payment separately. However, you can always instruct the notary to limit the areas of the power of attorney as much as you wish.

If you are buying a home in Spain, sooner or later you are going to need to change and transfer your Pounds in the UK to Euros in Spain. The chances are the biggest transfer you’re likely to make will be for the payment of the property you are buying. You are also likely to have smaller monthly or regular transfers to make to cover your bills or mortgage payments in Spain. Not forgetting your spending money while you are enjoying your place in the sun. After deciding which Spanish property you want to buy, deciding where to buy your currency is next important financial decision to make.

These are the four main places where you could buy and transfer currency for the purchase of your property in Spain.

Bank/Building Society

This is often the first place people think of if they need to transfer money anywhere. This is because we all know how to contact our bank, we probably have faith in their services, and if truth be told, we are probably a bit too lazy to think about the alternatives. My advice would be to get a quote to compare with other means of currency exchange from your Bank/Building Society, and check what the bottom line is; the Bank/Building Society may well make charges to transfer money to Spain, so watch out for this.

Travel Agent

Some High Street Travel Agents offer Foreign Exchange services. You may have visited them many times to pick up your holiday spending money. This option is likely to be very expensive and the exchange rate not very competitive at all. Again, satisfy yourself by asking for a quote.

Post Office

The Post Office offers a very similar service to those of the Travel Agents. Again, this option is likely to be expensive and not very competitive at all.

Foreign Currency Specialists

Choosing a good, established Foreign Currency Specialist is almost certainly going to be the most sensible option when it comes to transferring the money to pay for your home in Spain, or for the regular payments to your bank account in Spain. There are several companies operating in this field. Moneycorp are one of the most established. They will typically save you up to 10% when compared to High Street Banks/Building Societies.

Different Types of Bank in Spain

In Spain there are two types of bank. There are regular clearing/commercial banks and also savings banks known as “Cajas”. Cajas operate in a similar way to how Building Societies operate in the UK.

Both types of bank provide the normal bank services and products you would expect,such as credit/debits cards and cheque books.

Different Types of Bank Account in Spain

• Non Resident Bank account: If you’re from another country and spend or plan to spend less than 6 months of the year in Spain you are considered a non resident and as such you will open a non resident bank account. To open the account in the branch you will need to supply identification such as passport and or NIE numbers. You may also be required prove your non resident status because as a non resident the bank does not withhold a percentage of the interest earned for tax. If you become resident at point in the future, you will need to tell the bank and give them your NIE Certificate.

• Resident Bank Account: Really,the main difference between the non resident and resident is there are less fees to pay on a resident account. If you plan to be in Spain for more than 6 months of the year you will be required to open a residents account once you are living here.

Credit and Debit Cards in Spain

Once you have opened an account and signed the forms, you will typically be issued with a debit card. This card can also be used to obtain cash from the ATM’s. If you have a regular amount coming in to the account you may also be able to apply for a credit card. If you plan on making any online purchases try to use your credit credit card rather than debit card as often the Spanish debit card offers no protection, should your details ever be used fraudulently. Some banks will not consider applications for credit cards from non residents.

The Direct Debit system in Spain

All of your bills such as water, electricity, telephone, internet, etc will be paid by direct debit. If you ever need to cancel a direct debit, you will need to go to the branch in person and ask them to remove the direct debit from your list.
Direct Debits can be set up easily by supplying your bank account details. It is very important that you check your statements regularly as there is a time limit for reclaiming any money you feel has been debited incorrectly.

Bank charges in Spain

Most banks will charge you between €10 and €25 per year for “Maintenance” of your account. Non resident charges also often total around €160 per year. There may also be other charges applied for certain transactions. Check with your bank in Spain for a list of these charges when you open the account.

Using cash points in Spain

Wherever possible use your own banks cash point to to avoid paying a commission on your withdrawal. Your bank debit card may also be part of a network of ATM’s such as Servi-Red or Euro 6000. Using cash points with these symbols with ensure you do not pay any commission for withdrawing money while in Spain.

Internet banking in Spain

Internet Banking is widely available and make sure you register for it when you open your account, as it’s the easiest and quickest way to keep track of your account in Spain.

Mortgages in Spain

Currently around half of UK buyers who purchase a property in Spain take out a mortgage through one of the Spanish Banks. The rates offered by Spanish banks, tend to be very competitive when compared to other borrowing options such as a re mortgage, equity release or personal loan in the UK.

As rule of thumb, the banks in Spain will lend up to 70% of the purchase price. This lending is of course is subject to a number of factors including the borrowers age, income, credit history, current financial commitments and valuation of the property they wish to purchase.

There are set up costs involved when taking a mortgage in Spain and you should budget for 2-3% of the loan amount, as part of your overall calculation of costs. Interest rates for mortgages are currently (Aug 09) around 3.5% – 4%

Releasing Equity from a property in the UK

The idea of equity release is to allow property owners to raise cash from their home’s value without selling and down sizing to a cheaper property.

Whilst it is rare that a buyer uses equity release to fund the entire purchase of a property in Spain. Equity release is often used to raise part or sometimes all of the deposit and additional costs associated with buying a home in Spain.

If you have a good relationship with your bank, income and of course sufficient equity in your UK home, a telephone call to your bank should be all it takes to find out how much you could borrow and importantly how much will it cost.

It’s worth having a look here too for some useful information http://www.thisismoney.co.uk/equityrelease

A big difference between UK and Spanish Banks

One of the frustrating things about banks in the UK, is the lack of them. Well certainly the lack of them on the high street and if you happen to be lucky enough to find one, the chances of speaking to your bank manager in person are slim at the very least. Now, one major, positive difference in Spain is that banking is all about building relationships. Speaking to your bank manager is easy and you will generally find the staff in banks to friendly and very helpful. Now more than ever, your bank manager in Spain will want to know you if they are going to lend to you.

Julia Gadalla from the MASA Mortgage Department helps hundreds of people every year to find a mortgage for their property in Spain. When I asked her about this “old school” way of banking, she replied “It’s true, once you get to know the people who work at the banks they will help and advise you to a level we are not used to in the UK. The banks are always willing to listen and help me and my clients who are looking for mortgages find the best solution possible”

Fixing your budget for a Spanish Property

It’s a good idea to work out how much you can afford to invest into a property in Spain, before getting too far down the line with property information or even viewings. Julia from the MASA Mortgage Department has supplied this simple 3 step process to getting that all important figure

1. Calculate how much cash/savings you want to set aside for the purchase.

2. If your cash or savings is not enough for an outright purchase of a property or the type of property you want, firstly look in to how you can raise the rest of the deposit. You will need at least 30% of the total purchase price. Speak to your bank/building society about your options in raising this finance, possibly through the release of equity from your UK property. Once you have done this, you have a clearer idea of how big a deposit you have.

3. Speak to someone expert in Spanish mortgages. They will be able to give you a guide to how much a bank will potentially lend you, and give you an idea on what the monthly mortgage payments will be. Before your Spanish Mortgage Advisor can give you these figures they will want to know how much of a deposit you will be able to put down, along with details of income and other financial commitments.

At this stage it is important to remember you are NOT making a mortgage application or committing to anything. You will however now have a good idea on how much you can potentially afford to spend on a property in Spain, should you find one that ticks all the boxes. Your Spanish Mortgage Advisor will also be able to tell you what documents you will need to supply if you decide to go ahead a mortgage application.

For further information on Spanish Mortgages, contact: mortgageinfo@masaint.es