12/04/2012 - Disadvantages Rent to Buy in Spain
Disadvantages Rent to Buy in Spain.
Spain has recently seen growth in the rent to buy market as developers look for new ways of selling property or occupaying distressed property.
Rent to buy is a common way to ensure a property is occupied but to also give the developer valuable cash flow when properties are just not selling.
Plus Points
- Move in no deposit, rent for a period e.g. 3 - 5 years
- Rent builds up towards your deposit
- Final purchase price is agreed at the start of rental period
Downside
- Long term deal with developer that you may find difficult to exit
- Property may be overvalued at start meaning you paid too much in the first place
- Who is to say what the development will be like in 5 years? Will it be fully occupied? Will you be living in a wasteland?
- Take professional advice before entering into any rent to buy scheme in Spain
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