Mallorca Property Investments - Potential Pitfalls
Before deciding on investing in property in Majorca, ask yourself the following questions:
Can you afford the purchase and subsequent mortgage repayments, and have you taken into account all the hidden costs? These include numerous taxes such as the one-off purchase tax and subsequent annual Capital Gains, Wealth and, if you're hoping to rent, Corporate Gains tax, levied at 30%. Meanwhile, lawyers can be pricey and the process slow, with lots of red tape to cut through.
Do consider whether the size of your family is likely to grow, and factor this into the size of the property you acquire.
Look at any changes to the area you're looking to buy in. Is there a growth in new business openings or have yachts recently begun to moor in the harbour? Conversely, has the council put in planning permission for a new sewage mains close by or has Club Lager and Wet T-shirts just taken over the nearest hotel?
Are there good links to transport and local shops and amenities?
Is the land that you are looking at entirely private? Check that there are no right of ways running across it, or that the lovely well in your garden isn't utilised by the local villagers.
Where possible, ask why the property is for sale and find out how long it has been on the market for - if it's years then the chances are that the price is too high or there's something about your dream property that you've overlooked.
If you're going through an agent, make sure to check the credentials of the company they represent and don't be afraid to change if you're unhappy with their performance. Majorca has some fantastic property agents, but there are some sharks out there too. A good one will keep you regularly informed, be helpful and happy to go to lengths to answer any questions you might have.
And finally: Don't ever feel rushed into investing in a property. It's important to view the property several times before you buy, and visit during both day and night. Listen carefully for any obtrusive noises and try to ascertain who you're going to be living next door to.