 AlquilaCompra.es - After having experienced almost a decade of golden years, the Spanish real estate market has slowed down and turned into a so-called buyers market. Due to this, Spain currently has up to 1 million properties ´in stock´ between key-ready and resale homes, waiting for a tenant or a buyer to move in. This surplus of unused properties is opening up new possibilities for those who have always dreamed of their own place in the sun but have not as yet been able to acquire it.
One of these arising opportunities is the “Rent-2-Buy” scheme. Driven by changing market circumstances this new phenomenon has manifested itself over the last couple of months as the number one solution to come to the aid of both property buyers and sellers.
As developers and private owners are en masse electing rent-2-buy schemes as their primary opt-out of the economic crisis, more and more properties are becoming available for those who are looking to rent a home with the option to buy. As a result, the Spanish portal www.AlquilaCompra.com, which specializes in rent-2-buy properties, has seen the number of homes offered on their website exceed 1250 since its launch in May this year, 30% of which have already been occupied since then.
So what would be the terms and conditions in case you would be interested in such a property? How long can you rent it for? How much of the rent paid will be deducted from the future purchase price? Should you need to pay any deposit?
A study performed by AlquilaCompra teaches us the following.
Homes available for rent with the option to buy are not bound to a certain model. A wide selection is available from apartments to luxury villas. You can rent a 1-bedroom resale apartment in Mojácar from 500 euros per month, with a future purchase price of 89.950 euros, or a luxury villa in Barcelona for 6.800 per month, with a future sales price of 2.700.000 euros.
On the Costa Blanca more and more beautiful newly built developments are becoming available, where you will be granted the option to try-out your new home before you buy. Santa Pola Life Resort is one of these projects. A unique residential complex of 397 bungalows and apartments, designed for people over 55. More than 6500 square metres are focused on social enjoyment, relaxation, hobbies, well-being and business affairs. You can rent a bungalow at Santa Pola Life Resort from 850 euro per month, with sales prices starting as low as 149.500 euros. You are allowed to rent the property for 2 years, but you have to decide if you would like to purchase the property within 18 months. However, these 18 rental payments will be deducted in full from the sales price in the case you decide to purchase the property. This would mean that your savings add up to a total of 15.300 euros to be deducted from the sales price, which normally would have been “thrown away” as rent.
Detinsa is another Spanish builder that allows tenants to rent one of their coastal detached villas in Denia on the Costa Blanca with sea views for 3 years with an option to buy. The rent to be paid is 990 euros per month, and sales prices start at 300.000 euros. All rent paid is deducted from the sales price in case of exercising your option to buy within the first two years, and 80% when purchasing after 3 years.
Moving further down the coast, we find one of the most prestigious Spanish builders on the Costa Calida and Costa Almeria, Keymare. This developer has both 2 and 3 bedroom apartments for rent at 800 euros per month, as well as 3-bedroom duplex properties at 900 euros per month. Sales prices start at 170.000 euros for a 2-bedroom apartment. All rent paid will be deducted from the sales price.
As you can see from our three examples, terms and conditions of a rent-2-buy contract differ between providers.
Our recommendation to you as a potential rent to buyer is to search for your ideal rent-2-buy home using the following criteria:
- Try and find rent-2-buy property on offer with a minimum duration of 2 years. This should give you sufficient time to ensure yourself of the fact that you are actually buying into a property that meets your requirements, which is legal, and that you can comfortably afford.
- Check with the builder/owner that during these two years the future purchase price will remain unchanged. Normally this is the case for contracts up to 2 years, however developers tend to raise the price after that on a yearly basis according to the retail price index.
- Furthermore, the rent deducted from the purchase price when exercising your right to buy within the first 2-years of your contract should normally be a full 100%. After that period, the longer you wait the less of a discount you will receive, although usually this will never be less than 50%.
- Finally, make sure the deposit that you are being asked to pay in order to take the property off the market and secure your option to buy is anywhere between 2 months rent and 6000 euros, depending on the duration of the agreement. Be aware that although usually the deposit will be deducted from the end price, you will lose this amount in case you choose not to go ahead with the purchase.
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