TIP

If you can't wait to try the cuisine, visit some Spanish delicatessen Web sites, such as www.delicioso.co.uk, www. donquijoteltd.com and www.iberianfoods-shop.co.uk, and shop online for the finest Spanish food and wine.

Where to Go

Spain is like a collection of different countries - a mixture of cultures and climates, each of them special. Spain has archipelagos of islands that nestle in a near-eternal warm spring and coastlines beaten by Atlantic gales as savage as anything you see in the movies. A quarter of the locals don't speak Spanish or even think of themselves as Spaniards - and they may be unable or unwilling to speak with you if you try to chat in Spanish. In the cities, you'll find as sophisticated a range of products as in London, Paris, and New York. In the country, it can take two hours to get to a village store, and the locals you pass may use donkeys for transport. Large parts of Spain are closer to Africa than to the rest of Europe, both physically and culturally. Spain even has a homegrown tax haven perched on a mountaintop that's easiest to reach by skiing.

If your only experience of Spain is a holiday on the Costas, think about taking a look at the rest of this amazingly diverse country. But move too far away from the rest of the Brits, and you'll need to think seriously about learning Spanish. In Part II of this book, I take you on a whirlwind tour of Spain showing you the many different types of properties worthy of your attention. In Chapter 3 I offer some insights into the professionals who can help you find the best-value property in your chosen region.

Working Out What You Can Afford

So you're sold on Spain. But before you think seriously about buying a property, you need to set your budget. You can waste an awful lot of time racing around the country looking at properties that cost more than you're prepared to spend. Even searching on the Internet can be frustrating. Until you limit your price range to within around ?10,000 of your budget, you may be so overwhelmed by details of properties that you can't even begin to prepare a viewing shortlist.

Adding up your assets

The average cost of a house in the UK is ?257,000; the average in Spain is ?130,000. In theory, if you decide to sell up and move to Spain, you should have plenty of money to spare. However, even if you do the sums carefully, you may not have quite as much as you would expect. The ?127,000 you thought you would have as a result of selling in the UK and buying in Spain is likely to be closer to ?100,000, as I explain in Table 1-1.

After doing the sums in Table 1-1, you still get a pretty good turnaround on your investment. Even if you're seriously cautious when it comes to money, you can expect to earn the interest on the ?99,990 difference between selling in the UK and buying in Spain. This amounts to around ?3,000 a year - not a bad fistful of change.

Finding out how much you can borrow

Selling up in the UK and buying a similar property in Spain means you probably won't need to borrow any money. However, if you have the income to support a loan, you could upgrade the whole scenario. I look into mortgages in more detail in Chapter 10.

If you think you can afford or can generate from your Spanish and UK properties about 9,000 of extra income, then you should have little difficulty in raising all the money you need to keep your home in the UK and buy a house in Spain. By not getting out of the UK property market, you'll also be giving yourself the flexibility to return to the UK at a later date.

Setting your budget

Now for the $64,000 question: How much should you set aside for your move to Spain? The answer depends on your age, objectives, and appetite for risk. Think about the following points:

When you've decided on your strategy and set a budget, stick to it! However appealing a property is, don't exceed your budget unless you can see a way to increase some other aspect of the equation, such as being able to rent out the property for part of the year or earning money in some other way.

Putting Your Money Where Your Mouth Is: The Buying Process

Plenty of people can help you put your money where their mouths are. The trick is to be completely satisfied that what they offer is what they say it is, what you want, and what you think is good value for your money. Specialists and professionals can be expensive, but you still need to check out a whole heap of things yourself before you get the experts in. Once you're satisfied that the deal looks good, certainly get the professionals to do the rest.

TIP

Language is a big issue when buying a property, so if you don't speak Spanish, get someone alongside you who does.

Unearthing your expert team

Almost certainly you'll need help to alleviate some of the strain of property-hunting in Spain, even if you happen to be fluent in the language and a qualified surveyor. The first people you meet are likely to be in the business of helping themselves rather than you: think estate agents, property developers, and anyone else showing off their wares at one of the 1,000 or so property exhibitions in the UK each year. You do need these folks, and you need them on your side, but don't take everything they say as the truth. Treat their words as you would those of a politician at election time, and you won't go too far wrong. Bring in some real experts. The following are the key people whose expertise and knowledge you need to tap into:

Check out Chapters 3, 13, and 16 for lots of info on finding the best experts and getting them on your side.

Working your way through the process

Buying a property in Spain is similar to buying in the UK, with one key difference: Many operators in the property business see foreigners - which is what you are in Spain - as fair game. From the moment you express the slightest interest in a property until you get into your lawyer's office to close the deal, chances are someone will try to get you to do something that you'd never consider doing in the UK and which may even be illegal.

WARNING!

Local property touts are always on the lookout in hotels and outside estate agents' offices to lure the unwary to properties that are so dodgy or overpriced that they can't be sold any other way. Estate agents, in person and through their Web sites, may invite you to part with #1,000 or so to secure a bargain property in a development that's selling like hotcakes. Even if you skirt around these minefields, you may find a financial time bomb waiting for you at the end. The seller may ask you to under-declare the selling price to lower both her and your taxes and legal fees. Under-declaring is illegal, and the Spanish authorities are becoming less and less likely to turn a blind eye to it. You could also be storing up a thumping great capital gains tax liability for yourself when you come to sell up. I cover the ins and outs of this particular knotty issue in Chapter 11.

In Chapters 11 and 13, I explain how to avoid these and other pitfalls and to follow the right legal path to end up with proper title to your Spanish home.

Getting what you pay for

Properties you see in the brochures or on the Web site may or may not be all they're cracked up to be. You have to look after your own interests to make sure the property you choose is what you want and that everything works. In Spain, just because you have a tap and a telephone point doesn't necessarily mean you have a water supply and access to the telephone network.

If you find three or four properties that meet your requirements, surveys at #500 a shot with legal costs on top will soon eat into your budget. Think about doing your own basic property health check first, and then pay for a surveyor or lawyer only after you've concluded negotiations on price and are sure the house is what you want.

I look at finding out the critical details about the physical structure of your property in Chapter 12. With a bit of foresight and effort, you can identify before you sign on the dotted line most of the things that can go wrong or reduce the value of your asset. What you can't do is leave the professionals to sort out these matters as you might do in the UK. Remember: You're the gringo in this situation.

Making Money from Your Property

Buying a property needn't just be an outlay. You can make your property pay its way in dozens of different ways. At the most basic level, you can let out your house when you're away. Taking things further, you can use your home as a workplace and so operate with minimum overheads.

Merging your home and workplace

If you need to make some money to bridge the gap between your financial resources and your Spanish property aspirations, you may consider making money from your house. Tens of thousands of foreigners run businesses of every shape and size from their homes, including B&Bs, hotels, restaurants, bars, vineyards, stables, holiday cottages, language schools, and Web-design companies. In Chapter 14, I look at the different ways you can make money from your home and the pros and cons of living above the shop.

Selling your property for profit

From the moment you buy your first property, you're potentially in the business of being a seller - or vendor, to give it its legal title. From a profit-generation perspective, selling a house in Spain is much the same as selling in the UK or anywhere else. Paradoxically, you're adding value the moment you buy. Overpaying at the buying stage means you're pushing water uphill from then on. In Chapter 11, I share some negotiation tips to help you push down the purchase price.

(Continues...)

Excerpted from Buying a Property in Spain For Dummiesby Colin Barrow Copyright © 2007 by John Wiley & Sons, Ltd. Excerpted by permission.
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