Buying In Spain – Eyes Wide Shut?

Buying Your Spanish Property – On the Coast or Inland
Do you go to the coast along with many others or do you look further inland for your dream home – what are the benefits to you for each of these locations.
Rental Income
Firstly you should have already decided what you want from your move and potential purchase. Are you going to be living here permanently or will you be using it as a holiday home, do you therefore require a rental income to cover all or part of the costs? If so then you will need to look more towards the coastal regions and the tourist areas, although inland is becoming popular with a different breed of tourist – those wanting to get away from it all.
There is not such a critical mass of people wanting this kind of holiday so if you need to rely on an income then you should look towards the Costa’s. You could secure a long term rental for your inland property to cover you your costs, but you need to be very careful ensure contracts are well worded. Failure to do so can be costly.
Capital Gain
In recent years prices on the coast have soared. Recently though, prices are slowing – whereas before 20-50% rises were common – it is now a more reasonable 7% rise per annum. In part this is because less people are buying – the UK has seen a dramatic downturn in the property market, and this has had a knock on effect on the Spanish Market. Previously people were selling to move out here. Now they cannot sell their house in the UK so they have less budget and on the coast their budgets will get them a 2 bed apartment 500M from the beach. Move inland and you have a wealth of villas in excellent condition with pools and for the same sort of price. So people are more discerning in their choices.
Renovation of property
4 years ago it you could buy a house for reform that would return much more than the value of the reforms. For example a house worth €100,000 complete and needing €30,000 spending to get you there would have sold for €30,000 – making it a valuable investment. (You only have to look at Oliva to see this in action). However the same property now would cost you €80,000 – making reform not so attractive unless you really like the house. However Inland there are still houses requiring reforms making fabulous homes and return a much higher capital gain a worthwhile investment
On the Coast such properties do exist but it is like looking for a needle in a haystack. When you find them they are not legal, no papers, urbanisation just round the corner or a wealth of other things. So buyer beware.
Building Your Own Home
An option many have considered and commenced. Why? Well you get exactly the home you want – and at a great saving – 20-30%. However it isn’t as straightforward as it seems. No longer are town halls turning a blind eye to illegal builds More and more the town halls are issuing demolition orders. Which makes plots of land with permission very valuable (read expensive). And by the coast read very expensive. Go to Moraira and 800m cost you €250,000. In Oliva the same plot would be €140,000. Inland in Ontinyent this price would be €60-80,000 but you would get more land for this money.
Infrastructure
No doubt many people will be put off inland because of poor infrastructure and so head for the coasts where communication between towns and airports is good.. But recent investment and road openings – such as the new A7 has meant a great reduction in journey times. Many people quote 25 minutes to the beach from Ontinyent – the reality is that an average driver on an average day will take 40-45 minutes – but still half the time it used to be. But get to the airports of Valencia and Alicante and you are there in 45 minutes – now where can you do that – probably Moraira South and maybe Cullera North – but in between forget it.
In Summary – Costal Or Rural
It depends on what you want. The coast is great and I for one love it, but have often been tempted to up sticks and go inland for a bigger house. Inland has its charm it is more real Spain. But if you are looking for an excellent way of life with great communication, excellent facilities, and great community – not to say the villa you promised yourself you would buy – then really there is only one option – Go Rural.