Our Top Tips

Top Tips for Buying Property in the Canaries

Buying property is not a process to be rushed. Time should be taken to research the market and your particular island of choice.
Investing time at the beginning of the process will save you both time and money later on.

Our top tips are listed below for you to keep in mind when buying property.

1. Independent lawyer

• No matter what anyone tells you, no matter how easy it all seems and no matter how lovely the agent seems, ALWAYS use an independent lawyer to represent you throughout the purchase of your property on the islands.
• Make sure he is fully registered and has indemnity insurance.
  
• It is the lawyer’s job to protect you and inform you.
  
• You will need to pay the lawyer a fee, approximately €1000. This is not an area in which to keep costs down.
  
• The definition of ‘independent’ is that the lawyer represents you and only you.
  

2. Doing the maths

• Make sure you know your budget before you start looking at properties. This should include a mortgage in principle if you’re planning on borrowing money.
• If you're borrowing money, the repayments will stretch over several years when lending criteria and borrowing costs may change. Remember that interest rates are at all time lows and can only go up from here so make sure your budget covers any potential increase in future payments.
  

3. Beware of exchange rates

• The rates do not need to move substantially to affect the value of your purchase. When you start looking, £100,000 may buy you a certain property – a 10% drop in the value of the £ against the Euro, for example, may then put that property out of your budget. If you’ve already signed contracts to buy, this could cause you a problem. Speak to specialists in this area and secure your rate of exchange early.
• The rate fluctuations will also affect the costs of mortgages (if you raise the mortgage overseas and earn your income at home). Again, speak to a foreign exchange specialist to highlight the risks and to take appropriate action.
  

4. Research and ask questions

• Doing the research can save you lots of problems down the line so check websites, forums or discussion boards to get the knowledge you need to make the right purchase.
• Ask lots of questions. children are known for asking lots of questions and you should follow their lead when researching for your purchase.. Initially, focus questions on the company or people you're dealing with, not the properties for sale. Dig around for details on the owners.
• Ask for references or client testimonials (real ones) if it is a company, and make sure you find out in detail exactly what service they offer. Don’t just take their word for it – ask for details on their service in writing.
  

 

5. Risk / Reward ratio

• If you are buying property overseas as an investment (as many people have done in recent years), you need to bear in mind that big returns may come with significant risks. Be careful to assess the possible downsides to an investment property as well as the enticing investment numbers that could be achieved if all goes to plan.

Following these tips will help you make a more risk averse decision so heed the advice and you will be better protected.