Hire-purchase in Spain – what three mistakes you need to avoid

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Hire-purchase in Spain – what three mistakes you need to avoid. Doesn’t that sound wonderful? Are you buying a property in Spain but only have to pay a little more than the normal rent? In this article we show the advantages of rent-to-own in Spain but also explain the three mistakes to avoid when rent-to-own in Spain.

Advantage of hire purchase in Spain

Who doesn’t dream of a holiday home in Spain? Enjoying a cup of coffee on your own terrace with a view of the sea as soon as you get up in the morning is one of the dreams that many Germans realize every year. More than 12,000 holiday homes are bought on Mallorca alone – every year. However, prices are rising again, especially for single-family homes. Apartments are not in high demand at the moment, so bargains can now be found here. If you are looking for cheap apartments, contact me . There are now special discounts, especially from banks.

The vast majority of buyers of holiday homes bring the necessary small change with them. And some are also trying to get bridge financing in Spain . Especially on Mallorca there are some banks that have specialized in long-term real estate financing .

However, buying a vacation home is a costly affair. Finally, the additional costs are added to the purchase price. And they can be up to 13%.

Not everyone can pay these costs out of petty cash. And that is why hire purchase exists in Spain. You save the additional costs. Because the tax obligations are only due in the future after the entry of the purchase in the land register. Which brings us to the three most common mistakes that quickly turn rent-to-own in Spain into a nightmare:

Mistakes in hire purchase in Spain

The most common mistake is in the contract. And you have to think of the hire purchase from the end. The end is the notarial acquisition and entry in the land register. Any rent you pay must be divided into a rent and a capital contribution. Sound complicated? It is.

Calculate capital contribution correctly

The rent must correspond to the local comparative rent. The money is gone, lost. Only the capital contribution is offset against the purchase price to be paid. In order not to have any problems with the land registry later, after exercising the purchase option, which makes the entry, I definitely recommend having a bank appraisal made to officially secure the purchase price.

agree on the right term

With the right term, an annual rent increase must be taken into account. This is required by law in Spain (in Spain, indexed leases are the rule, not the exception!). With terms of more than two years, the question arises as to whether the whole thing is still worthwhile for you.

Have hire purchase entered in the land register

Hire-purchase is of little use to you if the landlord no longer sticks to it. It is therefore very important to have the hire purchase entered in the land register.

Conclusion hire purchase in Spain

If you choose a reputable landlord , you are quite safe. Of course, hire purchase involves risks that would not arise with a purchase. Provided that you are serious, rent-to-own in Spain is an attractive option to bring the purchase of a holiday home in Spain two years earlier. So, what are you waiting for? Enjoy the coming summer under the palm trees in your own house! For example in a newly built villa in beautiful Cala Pi on Mallorca. See the synopsis here .

 

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