The Pros and Cons of Renting and Buying in Spain

Are you thinking of moving to Spain? If you do then you’ll be in good company, with thousands of ex-pats taking the plunge and moving to the land of sun, sea and sangria each year.

As well as deciding when to move and where to move, one of the main decisions ex pats have to make is whether they should rent or buy a property. Each approach will have different levels of security, investment, and of course, money. There are pros and cons of both renting and buying.

Here’s everything you need to know to help you make the decision about which approach is best for you:

The Costs Involved in Renting vs Buying

If should go without saying that buying a property is a considerably more significant financial investment than renting a property. However, there are financial implications of both approaches to consider.

When you rent a property, you will need to pay an upfront security deposit to hold the property. You will then need to make monthly rental payments. The upfront payments involved in renting a property in Spain are much smaller than they would be to buy a property, meaning you can dip your toes into Spanish life without making a significant financial investment.

By contrast, there are huge upfront expenses involved in buying a property in Spain, as there are when buying a property anywhere. You will need a deposit, usually at least 10% of the property value, as a down payment, there will be fees and property taxes to pay, and you will also need to make monthly mortgage payments.

Whilst buying a property may seem prohibitively expensive, you will be investing in a building that can grow equity over time. This means that buying a property in Spain should be seen as an investment. Like any investment, this means that the value of your property could go up or down, but whilst the Spanish property market did see a dip during the Coronavirus pandemic, they have recovered significantly since 2021, with prices increasing to approximately 1,800 euros per square metre.

How Committed Are You To The Property Or Area?

If you’ve never lived in Spain before then renting can be an appealing choice because it provides you with both mobility and flexibility.You can change your mind about the type of property or area you live in. You can even decide life in Spain isn’t for you at all!

Whilst renting gives you more freedom and flexibility, it doesn’t offer the same level of stability that owning your own home does. Whilst it ties you to a specific property and location, it means that you cannot be removed from your home: with rental properties if your landlord decides to sell the property, or change the terms of your rental agreement, they have the freedom to do so.

On the subject of flexibility, you should also think about how easy it would be to leave your life in Spain. In a rental property you can simply serve your notice period and move home. When you own the property you will have to sell it. This can be a time-consuming process, with the average property sale in Spain currently taking 6 months. You should consider this potential selling time frame when making an informed decision about whether selling or renting is right for you.

Do You Want To Grow Your Investment?

A rental property will give you somewhere to live, whilst buying a property will give you the dual power of somewhere to live and a long-term investment. The investment potential is a significant consideration to take into account when deciding to buy a home.

Because the Spanish property market is showing both long-term stability and long-term growth, now is the ideal time to invest in property here. You can take advantage of the appreciation of property values, and enjoy living in Spain whilst growing your investment. If you decide you no longer want to live in Spain, you could also use your property to generate a rental income.

By contrast there is no investment when you rent a property. Instead, you are helping to grow your landlord’s investments, and contributing to their financial stability. 

Will Renting or Buying Suit Your Lifestyle Best?

Owning a property is a big commitment, and this shouldn’t be underestimated when deciding whether to buy or rent your home.

When you rent a property in Spain your landlord will be responsible for upkeep and maintenance on your property: this means that you won’t have to complete any time-consuming DIY, or have to consider the financial responsibilities that property maintenance involves either. Renting is hassle free in this regard.

If you own a property, you are responsible for all its upkeep and maintenance. This can be time-consuming and expensive, but it does mean that you can personalise the space, painting and decorating the home in the way that best suits you.

Owning your home has a sense of comforting permanence, and allows you to create a long-term home that suits you, establishing permanent roots in your chosen Spanish community.

The Legal Commitments of Renting Vs Buying

Renting is often seen as a less stable option than buying a property, and whilst in many ways this is true, tenants have robust and well-protected legal rights in Spain. The rights and responsibilities of your landlord will be clearly laid out to you when you sign your tenancy agreement. If these responsibilities are not adhered to, you will have the right to legal recourse.

When buying a property, the main legal commitments come as part of the purchasing process. Legal processes such as property transfers, title deeds, and mortgage contracts form a key part of the property buying process. If you are buying a home in a community then you may have ongoing homeowner association or community fees to consider.

If in doubt, seek advice from a legal professional before you make the legal commitment to either rent or buy.

Only you can decide whether to rent or buy a property in Spain. Each individual's financial situation and personal circumstances are unique. Whilst one person may like the security that comes from homeownership, another will prefer the freedom of renting their home.

It is important to take the time to consider all the options, so that you can make an informed choice about which element of the Spanish property market will suit you best.

Are you thinking of moving to Spain? Whether you want to travel from spot to spot and enjoy everything is culturally diverse location has to offer, or you’re just looking for somewhere quiet and warm to enjoy your retirement, our locally based property experts can help. Why not get in touch today to find out more about how we can help you find the home of your dreams.