Many prospective homebuyers in Costa del Sol underestimate the time necessary for completing a purchase, especially for luxury properties.
For example, foreigners in Spain should expect to wait for two months when they apply for a Número de Identificación de Extranjero (NIE).
Otherwise called the Foreigner’s Identification Number, an NIE application marks the first step of buying a Costa del Sol vacation home.
Costa del Sol may be famous for being the California of Spain, but getting an NIE can be a source of culture shock. It isn’t as simple as signing a form and being done with it.
In fact, it’s a common blunder for foreigners when they forget to book an NIE appointment.
Once you complete the application process, the real work begins toward a luxury property purchase in Costa del Sol.
When it comes to vacation homes in Costa del Sol as investments, a real estate advisor with decades of experience should be your minimum standard. (Inmobiliaria Rimontgo)
1. Prepare A Steady Cash Flow
A lack of access to financing often intervenes with a home buyer’s cash flow, according to luxury real estate specialist Inmobiliaria Rimontgó.
The agency advises home buyers to secure enough cash for the initial payment and foresee extra charges.
If you’re applying for a mortgage, a steady cash flow becomes more important. A typical deposit represents at least 30% of the purchase price.
Let’s say you plan to buy a EUR 23 million (US $26.7 million) vacation home in Costa del Sol with scenic views from La Zagaleta. The minimum deposit for a mortgage based on the property could reach EUR 6.9 million (US $7.8 million).
A steady cash flow is important when applying for a luxury mortgage in Spain.
2. Consult A Real Estate Advisor
Homebuyers in Costa del Sol can avoid a disrupted cash flow by seeking help from a real estate professional. It also helps if a broker achieved significant accomplishments.
Take Rimontgó as an example. The firm holds the distinction of being instrumental for Spain’s first-ever Golden Visa issued to a winery buyer.
When it comes to vacation homes in Costa del Sol as investments, a real estate advisor with decades of experience should be your minimum standard.
Another commonly overlooked aspect of buying a Costa del Sol vacation home involves the cost of ownership. (Inmobiliaria Rimontgo)
3. Understand The Cost Of Ownership
Another commonly overlooked aspect of buying a Costa del Sol vacation home involves the cost of ownership. This is especially true for individuals when they finally have the money to buy a luxury home.
Keep in mind that homeowners in Costa del Sol must pay:
- Impuesto sobre Bienes Inmuebles (generally known as real estate taxes)
- Impuesto de basura (garbage collection/removal tax)
- Community fees
- Utility fees (e.g. electricity, water)
The garbage tax may seem rubbish, but many foreigners end up miscalculating the cost of homeownership in Costa del Sol.
Like a mortgage application, a real estate advisor should fully explain the true cost of buying a vacation home.
Costa del Sol attracts foreigners and locals alike with the promise of year-round sunny weather.
4. You Will Need Patience…And A Lot Of It
Costa del Sol lures foreigners and locals alike with the promise of year-round sunny weather.
Unknown to many, some homeowners have gone through several bureaucratic and legal hoops before basking in that coveted sunshine.
Here’s a sample scenario of what occurs (assuming you already have a lawyer) after choosing a luxury property in Costa del Sol:
- You pay a reservation fee.
- The lawyer drafts a purchase agreement.
- You and the seller sign the title deeds at a specific date.
- The lawyer registers the deeds.
These steps only provide the simplest glimpse of a luxury property purchase in Costa del Sol.
There would be several steps before and after the sample scenario, depending on your circumstances. Still, don’t let the drawn-out process discourage you.
Most problems with a luxury home purchase in Costa del Sol happen because of incomplete paperwork. If you fail to secure an NIE, for instance, you’re already months away from starting a homebuying process.
Home prices in the country have trended upward since 2020. This designer-done villa in Malaga is listed for EUR 5.95 million (about US $6.9 million). (Inmobiliaria Rimontgo)
5. Forget The Perception Of Economic Crisis
Spain has gotten a rather odd impression that the country remains in economic turmoil. This perception then leads buyers to think of cheaper homes.
On the contrary, home prices in the country have trended upward since 2020.
According to the Ministerio de Fomento (Ministry of Development), home prices in Spain cost EUR 1,661.60 per square meter during the third quarter of 2021.
Housing prices in the same period of 2020 reached EUR 1,619.60 per square meter. Higher prices, even during a pandemic, indicate no such recession.
If you factor in the price of luxury homes in Costa del Sol and the region’s popularity, any perception of an economic crisis also seems irrelevant.
Luxury properties of Costa del Sol often feature high-end pools and outdoor amenities. This six-bedroom residence features an infinity-edge swimming pool surrounded by decking. (Inmobiliaria Rimontgo)
The Final Part: Break The Language Barrier
Fluency in English and Spanish puts homebuyers in Costa del Sol at a favorable advantage.
While many people speak English in the region, Spanish remains the medium of choice for official documents and paperwork.
In other words, bilingual real estate specialists and lawyers would be helpful to break the language barrier. You can easily avoid property scams at the same time.
Click here to find the best vacation homes near Costa del Sol.
