<< Back to Main Valencia Press ReleasesGovernment Guaranteed Rental Scheme and 100% Mortgages Boost Valencia's Buy To Rent Market.
Added: (Thu Nov 23 2006)
Spain's Ministry of Housing has set up a Public Rental Agency with a view to invigorating the Rental Market in Spain.The government is guaranteeing full market rents to property owners willing to rent their properties for a period of 5 years under this Guaranteed Rental Scheme. Together with 100% mortgages now on offer to non residents who are under 35 from Banco de Valencia, Buy To Rent property investment is becoming increasingly attractive especially when one bears in mind that capital appreciation in Valencia is still in double digits.
Guaranteed Rental Scheme
The scheme works as follows : property owners entrust their properties to the
Housing Ministry to be rented under the government's Guaranteed
Rental Scheme. Rental periods are for 5 years after which time the property
owner can recover his/her property or rerent the property for another period
of 5 years. The government for its part guarantees to return the property in
the same condition that it receives the property in. Soft loans are also available
to property owners who wish to renovate their properties prior to renting them
under the scheme (5 year loans up to €20,000). The government scheme insures
the property against wear and tear, non payment of rent and even malicious
damage.Appointed agents are entrusted with the task of finding tenants. The
costs associated with the rental are deducted from the rent and are in the
region of 10% of the rental. The rent is paid into the property owners bank
account during the first 5 days of each month. Payments start once the first
tenant has been found and are indexed linked.If the tenant moves out before
the 5 years are up, payments continue and the appointed agent will seek a new
tenant at no additional cost to the property owner.
The only downside for the property owner under this Guaranteed Rental Scheme is
if he/she decides to sell his/her property before the 5 year rental
period is up. If this happens the property owner must find a buyer willing
to buy the property with the sitting tenant and see out the remainder of the
rental period after which he/she can recover the property or rerent it under
the government scheme for another period of 5 years.
Banco de Valencia is also offering 100% mortgages to non residents who
are under 35 for periods of up to 35 years. Banco de Valencia is also offering
80% interest only mortgages. The size of the mortgage is based on the banks
valuation of the property and as these valuations are up to 10% above the
purchase price, good buy to rents can be gotten for relatively small money
up front and around €500 per month.
Here you have a link to Kyero where one of our clients presently has a buy
to
rent property advertised:
http://www.kyero.com/property/375515
The property is situated near the Football Stadiuum in Valencia, one of the
cities top areas. The property was bought for €213,360 and is being financed
via a 35 year mortgage from Banco de Valencia at Euribor + 0.75 fixed for the
first year at €1,016 a month. The rental is €700 per month.
The football stadium is being moved to the other side of the city, construction
beginning next March. The present stadium is due to be demolished in 2009 and
7 blocks of shops, offices and apartments will be built in its place with the
pitch being preserved as a park.
There has never been a better time therefore to purchase quality buy to rent
apartments in Valencia city. The arrival of sailing's America's Cup next April
showcasing the city to an expected global tv audience of 300 million viewers
makes the buy to rent argument all the more compelling.
I will leave the final word to The Sunday Times property columnist and Spanish
Property Insight Consultant Mark Stucklin : Property
in Valencia city could be one of the best investments in Spain
