Property remains a lucrative investment
Although there may be many people who will question this statement after the events of 2008 and 2009 which has led to a situation where over 4 million homes has been foreclosed upon in only three years in the US property market the truth is that statistics over the last hundred years will prove comprehensively that as an investment choice property are still the preferred method of investing. In fact the preference for property investment goes back thousands of years and in those times it was predominantly the affluent and the wealthy that were property owners and it was only in modern times that it was possible to obtain financial assistance in buying a property which has eventually allowed the lower classes to become property owners.
There are some important rules when purchasing
In order to ensure that your Spanish property investment will be worthwhile and profitable it is very important to never pay too much for a specific property. Those people who are paying too much for a property will encounter many problems down the line for instance wherein they are trying to sell the property or when they are trying to refinance or when they are using the home as security against an additional loan. These people will find it impossible to recover their original investment since they will mostly be left of no other choice but to sell for less than the original investment. In the same way using the home as security for finance may be significantly more difficult because of the size of the mortgage and the pressure which it is exerting upon their financial management. This may not leave a lot of leeway as far as additional finance is concerned. Most property experts are advising property buyers to negotiate the prize at least 20% below the value of the property, however this in not always easy and property in Spain is already at a low.
Current economic pressure
Most economies are still recovering from the last recession and therefore many financial institutions and banks are still maintaining strict mortgage policies in order to protect the property industry against further decline. This is making it more difficult for perspective property buyers to obtain adequate mortgages in older to invest in the market. Although there are many financial institutions that are doing what they can to stimulate the property market with things such as residual discounts, extremely low mortgage fees and in some cases free arrangement fees, but there will still be many buyers that may not be able to qualify for a mortgage loan. However for those people with a stable income they should remember that it is important to never accept the first mortgage which is offered to them but rather they should shop around until they are absolutely positive that they have found the very best mortgage option available.
Excellent opportunities could be found
For those with the financial means do not act rashly but rather be patient and wait for opportunities to present themselves. There are many people who are left of no other option but to sell because of financial difficulties and it may be possible to negotiate a very favorable deal. Because of the recession many financial institutions had to foreclose on Spanish property owners and now they are sitting with properties on their books which are difficult to get rid of and this is another opportunity which should be considered.