Top Tips For Purchasing Property In Tenerife
It can be a very exciting time when purchasing a home in Tenerife. However, it can also be an expensive and worrying process.
The following are some useful tips to help you get through the entire process and safeguard you from potential pitfalls.
Do your research
Before you even start to search for a property to buy in Tenerife, it's a good idea to first visit your lawyer.
There are numerous preliminary issues that you should discuss during the relatively calm time before finding your dream home. They include property ownership, mortgage financing and structuring your purchase to minimise costs and taxes.
Select a reputable estate agent
Estate agents in Tenerife are not really regulated unlike in the UK where they must hold a license and be professionally qualified in order to practice. Check to make sure the estate agent is fully registered, well established, and has a sound track record for quite some time.
That will help to ensure that you are covered and protected from any potential issues. If the agent offers any further assurances then even better but there are several well-established estate agents in Tenerife through whom you are guaranteed professionalism and safety.
Surveying the property.
Just like you would do when you are in the UK or any other northern European country, be sure to obtain a survey or get the property inspected before entering into a purchase agreement. Also be sure to thoroughly research the requirements for mortgages and the options that are available to you. Weigh all of the pros and cons of getting a mortgage from a UK lender or similar versus getting one from a local lender or bank close to the property that you are buying.
Buying with non-Euro currency
When you purchase a property in Tenerife inevitably you'll have to transfer a sum of money in Sterling (if buying in pounds or any non-euro currency) into euros in order to purchase your property. When it comes to exchange rates, they are constantly changing and fluctuations of more than 10% can happen, even within a short period of time. That means that there can be significant changes in costs, especially when it takes some time for the purchase to complete, like when purchasing a property.
A currency dealer specialist will usually offer a better exchange rate than a high street bank will. They can also provide a range of services which can help to protect you against adverse currency movements.
Be aware of bank charges
if you request your bank to transfer money for you then you should expect to be charged for them doing it for you. A local bank also might have substantial charges for receiving your money. However, a reputable currency trader or services such as Transferwise might be able to reduce or eliminate those charges altogether.
Fixing exchange rates
You can make an agreement to purchase your foreign exchange for currency to be delivered within a period of time of up to two years and then fix your exchange rate at your agreement time. That is referred to as 'forward buying' and helps you with securing an exchange rate at a really advantageous level and remove the risk that comes with adverse currency movements that may result in non-euro currency values increasing on your Spanish property between the time that you sign your contact and your actual payment.
Mortgage repayments
If you have to make overseas payments on a regular basis like mortgage repayments, then you need to arrange a currency dealer to help get a payment plan set up for you. This will eliminate the worry that exchange rate fluctuations can cause when currency payments are made and the transfer fee will just be a fraction of what a bank would charge you.
Is Tenerife property a good investment?
Due to being a year-round destination, investing in property as a part-time home or generating holiday rental income is an excellent bonus.
Most of the popular resorts are becoming more and more popular and with them, the property rentals are busier than ever with most of the year fully booked in advance.
Final thoughts
Make sure you never sign anything unless you're absolutely certain that you have everything in place and you're happy with the decision.
If you're ever in any doubt, there is no obligation and you can walk away if you're not happy.
Tenerife estate agents can do much of the heavy lifting for you and will keep you informed of the progress. Once you find the right agent, it makes it so much easier to process and think more clearly.
The island makes a great home and if done right, you too can have a slice of paradise.
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