Rent in Spain to buy lease options... are they worth it?

It is very common to have doubts about whether you should buy or rent. On the one hand, buying a home in Spain requires significant initial money, but it is not necessarily an appealing option to spend all your life paying for rent on a house that will never be yours. So how are you going to choose? Is it better in Spain to rent or buy?  property for sale in qatar

This article, prepared by ComparaJá.pt for idealist and news studies, looks at an alternative: a leasing option, also known as "let to buy," "let to buy" or "let-to-own." Find out everything you need to know about this alternative purchase or rental dilemma when you evaluate your property options in Spain, and even view the rental to own house selection available now.

How does rent-to-own work in Spain?

Basically, a lease option is a way of buying a property that takes account of its future acquisition if you have already rented it for some time. You can rent a property as normal (normally in Spain a period of 2 to 5 years is normal, as specified in the contract) and then you have the possibility to purchase it.

What are the advantages?

A loan to buy scheme allows plenty of flexibility, because before you buy it you can live in a place that gives you more time to save. This is a great way to achieve those who do not meet the proper economic requirements for buying a Spanish property, but who want to do so eventually.

Another advantage is that the tenants are not obliged to purchase the property once the rental period has ended. Only the seller has a certain commitment, because they are obliged, if the tenant still wants to buy it, to sell their house to the tenant within the agreed time limit

If, after a few years' rental of your Spanish property, you choose that it is not right for you, it is not compulsory to buy - before you buy, you have the opportunity to try! Similarly, you may decide to purchase the property earlier, before the end of the rental period, as long as both parties agree.

However, it is not just the tenant/buyer who benefits. There are benefits for the owner, too: they can increase their chances of selling their property and they will have still made money on the rental even though they do not sell it at the end.

All procedures, including term lengths or property values, shall be freely established between the tenant and the owner of the property when a lease agreement is signed. Normally, the rent is fixed for two to five years, although the purchase may be requested prior to this. Everything else in the contract can be purchased is the same as in the standard lease agreement, so for example - these are paid by the landlord - you don't have to pay the community expenses for the building while renting.

Finally, it is worth mentioning another incredible advantage: the rental amount paid is deducted from the total selling value, if specified in the contract, which is usually the same. This means that tenants don't lose their rental cash, but invest it in a possible future acquisition if they decide to do so. Moreover, the final sales price often carries a major discount on the Spanish standard market rate to encourage potential customers.

Are there any inconveniences?

There are some disadvantages, like anything else. In the Spanish market at the moment, there is little demand for leasing options, as the rental market has been growing in recent years while sales have been put back on fuel.

However, if you manage to enter into a rent-to-own contract, the rent may, as with letters, be subject to periodic revision. There can even be an additional 'optional fee' in addition to the deposit, as an additional guarantee for the landlord to know that the tenant takes the purchase seriously.

Please pay attention too to the final sales price agreed at the start of the rent-to-own period. Even when the rental is signed, the price may be below the market average, but depending on inflation and changes in house prices, the price can be above the market average in five years.

The seller is also in danger of wanting to sell the property, but eventually the tenant chooses not to keep it. That being said, homeowners usually only accept options for leasing if they want to sell the property but are not eager to do so, taking the loan as a kind of transition time until they are ready for sale.

In any event, consider whether a rental option is worthwhile for you because it could just be the ideal way for you to buy a home or villa in Spain over the next 5 years with all the benefits of trying before you buy. Several examples of this kind of property can be found on Idealist.