Should you be buying or renting property in Spain when you first arrive? What are the advantages & disadvantages of both? Find out so you can make the right decision.
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Is it better to buy property or rent when you live to Spain? And why is this decision important if you’re applying to move here on a Non Lucrative Visa? Stick around and you’ll find out.
First of all, what’s a Non Lucrative Visa?
In a nutshell, the Non Lucrative Visa is the residency permit that non-EU citizens need if they want to live in Spain long term but aren’t going to be working.
What’s that got to do with buying or renting a house?
Your property decision could be crucial to your visa application and your life here. Let’s look at the reasons.
Number one, Long term plans
If you’re thinking of staying in Spain permanently or at least for quite a long time, buying a property might be a sound investment. If your future plans aren’t as certain, renting could be the best option.
Number two, financial commitment
Buying a house is a a big commitment, and it comes with significant risks and responsibilities. On the other hand, renting is much more flexible so there’s less of a financial commitment. However, if you end up staying long term, renting may be less cost effective.
Number three, stability
Getting yourself a home before you arrive can provide you with instant stability for when you move. You’ll have a comfortable place to live straight away without that panicky searching for a long term rental and, if you have children, it’ll help you enrol in local schools and settle in quickly.
Number four, getting your visa
If you own a Spanish Property it can strengthen your visa application by demonstrating your commitment to living here.
Number five, integration
Finding the right property in the right area can have a huge impact on your ability to integrate into the local community and enjoy your life here. It’s so important to think about your location, access to local amenities, public transport, shops, and whether you want to be thoroughly immersed in a very Spanish area or nearer to an expat community.
The advantages of buying a property
1/ property values can go up like they have recently, so you could make money from your investment.
2/ It’s your property, so you can customise it however you want. You can choose the furniture & the colours, you can renovate & build extensions with planning permissions.
3/ No one is every going to put up the rent, in fact there is no rent, and there’s no landlord.
The disadvantages of buying a property
1/ Property can also go down in price, so if you’re buying as an investment you could lose out.
2/ There are extra costs from the word go, like taxes & fees, and you’ll need quite a hefty deposit if you’re getting a mortgage
3/ You are solely responsible for the maintenance, upkeep & repairs of the property, which can be costly, especially if there’s an unexpected problem.
The advantages of renting a property
1/ You’ve got much more flexibility. If you’re not totally sure of the region or town you want to live in, ‘try before you buy’ is a great idea.
2/ There’s a much smaller set of costs to begin with, usually just a deposit and maybe a few month’s rent in advance if you want to make your landlord happy. There used to be an agent’s fee to pay but the law has changed now to make that illegal.
3/ The landlord is the one responsible for all repairs and maintenance, and they’re the ones who have to pay the property tax too.
The disadvantages of renting a property
1/ You have no equity, so all of those rent payments are what you might call ‘lost money’.
2/ Sometimes the rent can go up, which can be frustrating, and it’s something you have little control over, especially if your rental contract hasn’t tied down what increases are allowed and the economy takes a tumble.
3/ You probably won’t have much freedom to customise where you live. You’ll certainly need permission for any adjustments you make.
What else do I need to think about before moving?
Your lifestyle for a start. Do you want the flexibility and freedom of renting, or the stability and investment potential of being the owner?
Anything else?
You should really look hard at your finances and consider your future plans. How do you think you’ll support yourself in five or ten years time, or if there’s a sudden emergency? Do you have a back up plan?
There’s a lot to consider! What should I do?
Unfortunately there’s no easy black & white decision, it really does depend on your individual circumstances, but if you think about everything I’ve told you and make a pros & cons list, then you should be able to decide for yourself.
Any more top tips?
Yes, definitely come to Spain first and have a look at different areas, at different times of year, and look at access to amenities and transport and airports. And don’t isolate yourself too much, unless you’re sure that’s what you want and can cope with.
Peace & Love. Let’s Dance!
Article by Skatz
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