Spanish homes at below market value prices
By Sue Brown, 30 Jun 2008
The key to a good property investment is to buy at the lowest possible price, essentially below the prevailing market value and then enjoy maximum profit at the time of eventual sale - with great family holidays or rental income along the way...
There are now more investment opportunities than ever in the Spanish property market as prices slow, developers jack up their incentives and “Must Sell” owners struggle with the mortgage payments after successive Euro interest rate increases. The new lower prices also produce long term ownership benefits, mainly the vastly reduced mortgage payments and resultant lower asking rentals if owners want to further subsidise their costs.
2008 is the already looking like the best year yet after a decade of steeply rising values for hardened investors buying at below market value (BMV) or long term buyers grabbing a bank owned or private “Must Sell” bargain at 25% to 60% less than official valuation.
Buying at Below Market Value is an obvious investment strategy, especially in a lower risk established property market such as Spain that still attracts more tourists than all of the so-called emerging markets put together. Year on year increases in arrivals for a decade means more tourists, means more rentals.
The industry regulatory body, Association of International Property Professionals (AIPP), produced a survey in 2007 on the growth potential for some remote Balkan country, pointing out property prices were going up by a huge amount and tipping it as the year’s hot spot.
It was – for a time, but demand soon ran dry, prices froze as quickly as its main tourist beaches in winter and early buyers struggled to finds holiday tenants – hardly surprising in a country where the average wage is around 100 euros a month!
That country finished up with, according to AIPP, one percent of the overseas property market, about the same as Florida where there has been little equity growth over the last 15 years. Spain is the top property buying destination with 40% of the market, bigger than France, Italy and Greece .
That, allied with slowdown prices, makes Spain the year’s best potential best buy for frequent holidays for your families and/or commercial renters.
All that sunshine, golden beaches and laid-back lifestyle at bargain prices for family holiday enjoyment, medium term investment or as the first stage of retiring to Spain for the queues of over 50s…