Thinking of buying a property to rent? Or perhaps renting the property you already own? Below are some costs and facts you should consider.

1. Notary fees (drawing up and notarising the "escritura" (title deed)
2. 7% IVA purchase tax (equivalent of VAT) for homes and apartments (16% for individual land purchases)
3. "Registro" - registering the deed at the Property Registry
4. Electricity hook-up
5. Water hook-up
6. Gas hook-up (if necessary)
7. Legal fees (if necessary)
8. Community fees

BUYING AN APARTMENT

Apartments are sold with the client paying half of the sales price during the course of construction (the other half being paid to us by a mortgage that has already been granted to us with a local bank.)

When the Apartments are completed and the client wishes to take title he can either pay off the bank´s half and thereby have clear ownership of the property OR continue the mortgage with the bank (which is generally for 15 years with the option to extend or cancel it at any time.)

1. The Notario - This is the man who acts on behalf of the Government to make sure that:

a. The seller is who he says he is; and
b. That the Title is clear and if not the Escritura (the written document) will so say what status and what rates of interest are owed.

2. VAT (IVA in Spanish) - Equals 6% of the Escritura´s declared value.

3. Registering your Title Deed (IVA in Spanish) -

Registering your Title Deed with the Registrar of Deeds in Vera should cost approximately 270 Euros. That price is for a 2 Bedroom Apartment of approximately 75 M2 in size. Naturally a larger Apartment or House would cost more

4. Electricity

About 180 Euros for the standard contract of 3,500 Watts. You pay bi-monthly fees based upon consumption and the amount of watts you have contracted.

5. Water

Contract is usually about 175 Euros and depends on consumption.

6. Gas (Butano)

If you cook with gas the bottles cost 7 Euros for a refill. The contract per bottle costs 30 Euros.

7. Legal Fees

Lawyer's usually charge about £700 (1000 Euros) for over looking the legal paperwork on purchasing a typical two-bedroom apartment. "Gestors" often much less for the same work.

8. Community fees

In the past, all the complexes that I have built, I have also owned a substantial amount of Apartments in them for my own rentals, consequently I too want to keep phase and charges for Community ownership as low as possible.

II. YOUR obligations toward THE COMMUNITY of owners.

By law the Community must meet once a year and elect a President, Administrator and a Secretary to care for the daily running and maintenance of the Community. The date for that meeting is inserted into the title deed. If you have a good developer he usually will manage the entire project keeping maintenance costs as low as possible.

Fees usually run 25-40 Euros per month, depending on how large the Community is and what they have to maintain; pools, garden, parking.

A Cost of Electricity and Water depends on consumption. Usually a 2 Bedroom Apartment is 30 Euros for Electricity and 30 Euros for Water. Rubbish collection for Apartments is approximately 5 Euros per month.

B Land Taxes on the property ("Contribucion Urbana", or "I.B.I.") for a 2 Bedroom House would be approximately 90 Euros per year.

III. EARNING A PROFIT ON YOUR APARTMENT IN SPAIN

Our Company does not take a laissez faire attitude towards renting your property out. We expect our clients to earn a good income on their substantial investment. We do not wait for someone to walk in the front door and plead with us to rent them an apartment. We are aggressively marketing on the Internet to various "activity clubs" to entice them to come to Spain and RENT. Our Company will be soliciting directly to Golf Clubs, Air & Hang Gliding Clubs, Scuba Diving Clubs (3 of Andalucia's 19 Blue Flag Beaches are here in Mojacar for snorkelling and underwater activities), Windsurfing and Sailing Clubs, Golf, Tennis and English Lawn Bowling Clubs, etc.

Let's face it, if we rent out your Apartment for as low as 250 Euros a week in mid-February, you still get 200 Euros profit. If we can bring in the off season visitor you very well could pay your entire community fees for the year. If you want to rent even more you could help yourself by putting up adverts in your home Supermarkets, news agents etc.

RENTAL CHARGES

The times have changed. Clients coming on holiday expect much more than to wade in the sea and drink sangria. They must be constantly looked after. Our Company will be charging a 20% commission for rentals. This holds multifarious advantages. Because we are in the construction industry, we maintain a full staff of Electricians, Plumbers, Carpenters and cleaning people. Should something go wrong-- we are there. Furthermore, we can take additional care of them to facilitate an enjoyable stay. Our holiday packages can include: airport pickups, car rentals, food packages, and arranging special side trips to other interesting localities.

EARNING A SUBSTANTIAL PROFIT ON YOUR INVESTMENT

The Spanish banks are offering mortgage facilities to our clients for 50% of the sales price. While you only paid half the purchase price you then are given time to pay the rest in a mortgage usually over a ten to fifteen year period (you can cancel whenever you want).

Here is how it works:

The average client owes approx. 54 Euros for every 6000 Euros borrowed. Therefore if he bought his place for 60,000 Euros and borrowed 30,000 Euros his PAY BACK TO THE BANK would be approx. 270 Euros per month, or 3240 Euros per year.

HOWEVER if the client allowed us to rent his apartment and he received back just 330 Euros clear for the High period of eight weeks in July-August, and one each at Christmas and Easter he will have reaped 3300 Euros for ten weeks of rentals! Still leaving the owner some 42 weeks of use or further rentals!

III. ESTIMATED RUNNING COSTS FOR YOUR APARTMENT ARE THE FOLLOWING:

ELECTRICITY
30 Euros per month X 12 *DoC . 360 Euros

WATER
30 Euros per month X 12 *DoC . 360 Euros

LAND TAXES (I.B.I.) per year ... 90 Euros

COMMUNITY FEES (Estimate)
30 Euros per month X 12 .... 360 Euros

RUBBISH COLLECTION (BASURA)

Per year .......... 60 Euros
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TOTAL 1230 Euros

Cost per month = (Approx) 102 Euros

* Depending on Consumption