If you are looking to buy your dream home on the beautiful island of Mallorca, it is well worth considering a ‘rent-to-buy’ option.
With Majorcan property prices currently representing exceedingly good value due to the economic downturn, renting a property with the option to buy it means you could end up being the owner of a delightful Mallorcan property well below the market value.
So what exactly is ‘rent to buy’?
Known as a contrato de alquiler con opción a compra in Spain, a rent to buy contract lets you lease a property in Majorca with an option to buy it at a specified time in the future.
The attractive thing about rent to buy is that it gives you a great amount of flexibility. If you do choose to eventually buy the property (usually within 2-5 years of taking out the contract), the rent you have paid during the period will be taken off the agreed sales price. If you don’t wish to buy, you simply move on.
What’s more, the pre-agreed sales price is usually considerably below the current market price and can represent an outstanding bargain as, should property prices shoot up, you have already agreed the legal price.
A chance to get to know the neighbourhood
Another big advantage of rent to buy in Mallorca, is that there are no ‘unknowns’. Once you move into the property you will have the opportunity to get to know the neighbours, familiarise yourself with the area, discover the local shops, bars and restaurants and so on.
Then when ‘decision time’ comes, you will know whether you want to buy or just move on somewhere else.
TIP: Tenancy Laws in Spain are highly favourable to the tenant. If you do take out a rent to buy contract, it’s a good idea to lodge it with the land registry.
Rent to Buy – things to consider
Initially you will be simply renting the property, so you will have to consider a few things before you take the plunge and decide to buy.
Will you be able to afford the rent? Remember, your rent could go up during the contract period. You should also bear in mind possible currency fluctuations if you rely on a UK income.
Another thing to consider is what would happen if your landlord’s financial situation takes a nose-dive. For example, should the landlord default on the mortgage (if he or she has one), your terms and conditions within the rent to buy contract could possibly change.
However, once again, you can always enjoy the peace of mind of knowing that you don’t have to buy the property if you don’t want to – even though you’ve been paying rent on it.
We should note here that, now Mallorca property prices are beginning to show signs of recovery, the availability of rent to buy contracts will almost certainly become less and less as the economy picks up.
A win-win situation
So, all in all, you could say that renting to buy in Majorca at this moment in time is a bit of a win-win situation, all things considered!
Finally, as in all property purchases in Mallorca, it’s a good idea to hire the services of a registered independent lawyer if you are considering rent to buy.
If you are looking to buy a dream home in Mallorca on a rent to buy basis, Balearic Properties, one of Majorca’s most experienced and respected estate agents, can advise you all the way in order to make your purchase of Mallorca property trouble free.
To view our latest Mallorcan properties go to: balearic-properties.com
Or why not pop in to one of our offices for a friendly chat? You are most welcome!
N.B. All the above should not be seen as a substitute for professional legal advice. It should be viewed for interest purposes only.