Spanish Investment Property : Steps for Investing Safely In High-Yield Spanish Property

There are many articles currently in the press warning would-be Property Investors of the danger involved in Off-plan Property Investment, from over-priced club membership schemes offering little real value to flat-out scams involving the sale of properties, which will never ever see the light of day.

Whilst in some cases these articles are well justified, it is important to note that historically Investment in Property offers the potential of great return on investment. As with any sort of investment such as stocks and shares, business ventures etc.. there are always risks, however with some careful consideration and planning, the risk can be minimized.

The following article describes how you can minimize the level of risk involved in purchasing a Spanish Investment Property by ensuring that you make basic checks.

When someone offers you any investment opportunity you should ask for re-assurances and where applicable evidence that they have considered the items listed below. These combine to form a strong guaranteee that your investment will be a strong one.

Standard Due Diligence Checks
Bank Guarantees – All new developments in Spain need to be insured by one of the major banks. Ask to see the bank guarantee.

Building Licences – Ensure all relevant building licences are in place; these are physical document so if you have any real concerns ask to see them.

Re-assignable Contracts – Check the contract before you sign to ensure that you have the right to sell on after completion. Check these with a specialist lawyer.

Build Quality – Ensure that the builders of the development are associated with a reputable and well known building standards

Area Infrastructure - Are there major roads. Airports, ports, train stations nearby. Supermarkets, Doctors etc….. If not ask for plans of what will be in place by the time the property is ready.

Accurate Potential Property Price Growth from Most recent government figures -
Check the source of any property price growth figures, anything other than the government or official source are liable to be inaccurate.

Hidden administration fees and VAT charges-
Ask for confirmation in writing (signed) for a payment schedule detailing the payments to be made. Also check any reservation contracts. These should show any additional charges.

Your personal checks-
When you are confident that the company offering the investment opportunity has completed their due diligence as far as possible you must then complete your own. Not only will this increase your peace of mind it may also save you some additional money.

- Seek independent legal advice, seek specialist Spanish Lawyers.
- Do your own research into predicted interest rates, property price growth, property rental prices, possible future sale price.
- Ensure you seek independent advice regarding different mortgage/finance packages to fund your investment.

** Many investment properties come with built in mortgage packages; however it is possible that you may find better rates and deals externally.

In summary, No one can offer you a guaranteed xx% return on your investment and anyone who is offering you this is only giving you an estimate based on last year's figures. The determining factor on whether you decide to make the investment or not should always be your own conscience backed up by the piece of mind offered by the due diligence completed on your behalf and also by yourself.

For further information about the how the International Property Investment Network(IPIN) run by www.propertyshowrooms.com use these due diligence checks to ensure that all our property investment opportunities meet this criteria

http://www.propertyshowrooms.com/spain/property/investment/investors-protection.asp

For many more free articles regarding investment property in Spain please visit: http://www.propertyshowrooms.com/spain/property/investment/

Or alternatively send an email to e-mail to IPIN@propertyshowrooms.com