Find Cheap or affordable Property in Spain: Strategies and Tips

Finding a cheap property in Spain is achievable with the right strategies and an understanding of the local real estate market. Whether you’re seeking a retirement home, a holiday property, or an investment opportunity, you might find that getting on the Spanish property ladder isn’t as difficult, or as costly, as it might first seem.

How to find a cheap property in Spain

A simple strategy for buying a cheap property is to go for properties other people might not be interested in. Your best chance for cheap property in Spain lies in fixer-uppers in the more remote locations, off the beaten track. Although you will require a renovation budget, the total cost may be cheaper than a modern, newly built property in a highly desirable area. Alternatively, you could also consider buying a property that hasn’t been built yet – an off-plan purchase.

According to latest yearly report on Spanish property market from the Spanish Land Registry, the cheapest property prices for residential properties that sold were recorded in the following regions:

• Castilla – La Mancha: The average price for residential properties is 1,433 €/m2 for detached houses.
• Extremadura: The average price for residential properties is 833 €/m2 for garages.
• Región de Murcia: The average price for residential properties is 733 €/m2 for garages and 813 €/m2 for mortgages.
  [credit registradores.org].

Fixer-uppers

A fixer-upper is a property that needs renovation. The age-old strategy to “buy the worst house in the best street” holds good. A property can always be improved while an area cannot – at least not single-handedly. So buying a property that needs attention, but in a good area, could be a very sound investment.

Not everyone has the skill to see a run-down property as a renovation project.  Many buyers will pass on a cheap property that could be made beautiful with a small investment and effort in favour of one that doesn’t require attention and immediately meets their expectations. Some simply won’t want to invest the time required to bring a property up to their required specifications. That makes those properties less desirable, and therefore cheaper. It also means there’s less competition for them.

Spain is increasingly being seen as an opportunity for buyers from countries where properties are expensive, including Britain, to get their hands on a home of their own. However, it’s crucial to account for the cost of renovations in your budget, as a seemingly cheap fixer-upper can end up costing more than a property in good condition. It’s always wise to enlist the help of a qualified surveyor to assess any potential renovation costs. A lawyer will also help you to determine if your renovation plans would be acceptable under local planning laws.

Off-plan developments

Like fixer-uppers, the vast majority of people want a property ready to move into. If you can (a) wait a year or two and (b) pay 30% or so of the price upfront, then you can grab both a bargain and a property which will be brand new.

Buying a property before it’s built often allows for a lower purchase price. Developers are keen to secure sales early on and may offer attractive discounts to early buyers.

However, buying off-plan also comes with risks, including construction delays and the potential for the finished property to not meet your expectations. Always research the developer’s track record and ensure your payments are protected by a bank guarantee.

Heading off the beaten track

To find cheap property in Spain you just need to turn your gaze away from the more famous coasts and cities. Indeed, you don’t need to travel far inland from Spain’s costas to find the price of property dropping enormously. Yet Spain has a superb transport infrastructure, so you can be on the beach in no time enjoying a beach lifestyle at an affordable price.

An area such as Teruel, for example, is little over an hour from the Mediterranean, is surrounded by beautiful countryside and not so long ago was being touted as the next best place to invest in Spain. Properties here start at €50,000.

Or Jaén, 90-minute drive from the Costa del Sol, with villa homes at under €20,000 (admittedly needing some TLC).

Go even further north and there are amazing bargains. In Ponga, for example, amidst the awe-inspiring mountains of Asturias and close to the surfing hotspots of LLanes, the local authorities were so desperate for more people to move there that they offered to pay them to relocate.

Timing your purchase

Like any market, the Spanish property market has its ups and downs, both within the year and the market life cycle.

The best time of year would seem to be the off season, in the winter. After the tourists have gone home in November, holiday home owners won’t wish to be paying upkeep with no income all winter. Others, facing the prospect in January or February of marketing their property for the next season, may want to bail out of the market. It’s worth making an offer and being ready to move fast.

Whether you are in a buyers’ or sellers’ market will also help your negotiating position. You can check data on recent sales volumes and prices and see how long it takes for sales to happen. Much of this data is available publicly.

Negotiating Effectively

While for many of us, haggling over the price is an uncomfortable business, it can save thousands of euros.

When asking about the market, an estate agent may not be the most impartial judge. Try some other property professionals such as surveyors and property lawyers.

Armed with this knowledge a buyer can more easily ascertain if a price is fair, or if a vendor is being optimistic. There can be a tendency in some markets to overprice for foreign buyers.

Beware vendors who suggest avoiding tax, and thereby reducing the price, by under-declaring the price to the authorities. This is an illegal practice. If a vendor or estate agent recommends this you should refuse immediately.

Understanding additional costs and fees

Whatever you buy, you must allow for the taxes and professional fees on top. These generally amount to an extra 10 to 14% on the purchase price for Spanish property. For cheaper properties in Spain, however, they will tend to be at the upper end of the percentage scale (because the work involved will be similar whatever the price).

This includes property transfer tax (ITP), the rate of which varies from 6% and 10%, depending on the region of Spain in which you are buying.

Legal fees are around 1 to 2% and notary, land registration and title deed tax add another 1% to 2.5%.