All you need to know about sale and lease back Property in spain.
We completed a deal and received a positive testimonial from a client who sold his property portfolio in and around Cabo roig/ Villamartin to a buyer who was only looking for investment. Please read below.
It got us thinking is sale and lease back a good idea in Spain.
Let’s say you are an investor
- You get a discount on the price
- Costs are saved
- You can see the history of payments from the tenants paid directly to the bank account.
- You are not wasting any time looking for tenants.
What about the owner?
If you sell your property now you get a cash injection. Why wait until after your days to turn your fixed-assent to money, enjoy it now!
We can draw you up a long term lease that states you are there for as long as you want.
Nobody ever needs to know you sold. You keep your old house, your neighbours and friends.
You’ve maintained the house all these years, you can still benefit from your upgrades.
Spanish Solutions will draw up tight rental contracts and protect your rights.
Guest post by Spanish Solutions client, Hughie
I recently sold a small portfolio of property in Spain. Spanish Solutions conveyancing department along with some help from Mari Carmen (MC management, Torrevieja) coordinated everything as you’d expect. It was a slightly different type of sale that what I am used to.
The investor came to me through Spanish Solutions not exactly looking to buy a residential property in the Spanish sunshine, but looking for a solid investment. I met him in La Zenia and we had a chat to see if we were a good fit for each other. He had toyed with AirBnB and other avenues in the short term rental area. Various law experts advised him on property management, tax on rental property, licences etc.
The portfolio I had for sale (off the books) consisted of three commercial units,(Cabo Roig and two in Mil Palmeras) two apartments in Los Dolses and a detached villa in Villamartin, all rented.
My properties paid more or less 7.5% return every year. That is an excellent return but due to personal circumstances, it was time for me to sell and move the cash back to the UK.
What he really wanted though was a solid, proven return. That is why we spoke about sale and lease back.
Protecting the tenants. How Spanish Solutions helped.
I had tenants in my units for five, six, ten years and more. These were good tenants, very solid, with no intention of moving out or missing a rental payment. It shows the importance of having a good property management company, paying your rental taxes, having good rental contracts (signed by all parties), and generally looking after and being fair to the tenants.
For them they don’t really mind who they are paying the rent to, again once it is all official and nobody is cutting corners. They signed a new contract with the new landlord, honouring the exact same terms. In fact, the tenants slightly improved the terms and conditions but it suited everyone.
James didn’t have any break in rental income. He wasted no time looking for and vetting tenants. He didn’t pay a finders fee to a property rental company. Spanish Solutions renewed the rental contracts and set up the direct debit payments with Bank Sabadell and all that went smoothly. I got a special offer for doing six conveyancing deals together.
As they were doing the conveyancing I knew that my utility contracts were cancelled and the new contracts were in the new owners name.
The tenants all had an extension to their existing contracts, some added security for them.
The Three commercial units involved all got a further 5 year lease.
No Commissions, fees, property management or added costs.
Myself and my wife sold without having to advertise the properties, or having estate agents upsetting my tenants. We paid no commission to anyone.
I too had absolutely no break in my rental return. In fact, I was receiving rental income right up to the day we signed the new set of deeds in the notary.
Had I put the clients out of the properties as well as disgruntled tenants, I’d have refurbishment to do to the property to help sell. This buyer only cared about the rent, not the aesthetics of the houses and especially the commercials.
He was able to get a valuation done with Tinsa, so he knew the prices were accurate.
We gave him a 10% drop off the market price- Great value for me; one buyer to negotiate with, one trip to the notary, one folder and one bank involved.
Had I sold the properties individually, it would have taken a year or more and who knows how much hassle would have been involved?
My tenants, although I am sad to lose them will be looked after by the new landlord. Just in case, he has good contracts with the new owner. Thanks again to Spanish Solutions for drawing up my rental contracts and doing all the conveyancing in a tax efficient manner.
Does Sale and Lease back in Spain work?
For me, sale and lease back worked. We highly recommend Ana and all in Spanish Solutions and we will deal with them in the future if we ever come back to Spain.
Hugh and Helen.
Looking to invest in Spain?
If you are looking to invest in property in Spain, let us know and perhaps we can find you another investor selling a complete portfolio of property.
We have also looked into buying a property in Spain through an offshore investment fund as happens regularly in the UK on behalf of our clients.
Perhaps helping seniors with Equity release is a way to invest in property in spain?
We can also help you with Bare Ownership in Spain, bank loans, tax, legal and anything else you might need to make your investment reap rewards for you!
If you need more information about Sale and lease back in Spain.
Get in touch and we can set up an appointment with our tax advisors.