Rent To Own in Spain

If you are looking to invest in real estate in Spain, you may be debating between buying and renting. While the first requires a lot of capital and the second doesn’t guarantee ownership, there is another option: rent to own! Also known as “rent to buy” or “let to buy,” this form of investment is highly appealing to anyone who wants to own property in Spain in the next five years. In this article, we’ll cover the pros and cons of the rent to own investment option.

Photo by Emre Can from Pexels

Benefits

While the rent to own option is not common in Spain, there are plenty of benefits for both property owners and investors. Even though this buying option isn’t commonplace, you need not be afraid to call property owners or sellers to offer it, as they may well be interested. At the end of the day, it is easy to convince sellers to choose this buying option as they receive the desired amount for their property and require a deposit, meaning there’s no risk. Owners who accept the rent to own option can also negotiate terms that range between 1-5 years for payment.

Photo courtesy of Nattanan Kanchanaprat

As for investors, there are also several upsides to rent to own properties. First of all, it allows people to invest with little money. The average deposit is only 10-30% of the asking price, which gives investors time to generate the remaining funds according to the payment terms agreed upon. Second, during the rental period, the investor can upgrade the property, which will enable them to sell it for a higher price, thus being able to pay the original owner in full and still make a profit. Finally, if the owner, for some reason, decides to back out of the agreement, they are usually required to pay the investor two times the amount of their deposit.

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Downsides

In all fairness, we feel that we should mention that there are some caveats to renting to own. As an investor or homeowner, it’s always best to get all the information to weigh your options before making a decision. The biggest risk when it comes to choosing the rent to own payment option is the purchase price. Sometimes, property owners set the purchase price a bit higher than other comparable properties in the market, in order to account for possible market price increases or inflation that may occur in the future. However, the property owner’s need to feel compensated for their time can lead to the investor overpaying and not getting a good deal.

Over To You

Hoping to invest, but looking for an option that suits your budget? The ability to rent to own is a valuable resource for homebuyers and renters alike. If you are looking to find a property that meets your requirements and need help negotiating your terms, don’t hesitate to contact us. At Wanderlust Realty, we usually have a couple properties on our inventory that offer the rent to own options, and we have years of experience working to help our clients find the best property for them at the best price!