Bank Repossessed Property Sales in Tenerife
The popularity of Tenerife depends on a number of different factors. Obviously, the favorable climate is the main contributory factor in this island becoming an extremely popular holiday destination.
However, Tenerife has kept up with this explosion in the numbers of tourists and now boasts a lot of excellent facilities, including some golf courses, fantastic bars, restaurants, hotels, and a whole host of entertainment. So, there are many reasons to buy bank-owned property in Tenerife, which is a reliable investment tool for everybody!
A bank owned property is a property where the owner, who has obtained a mortgage on it, was not able to make monthly payments to the lender (the bank). In this case, the bank has a right to seize or repossess the property. There have been huge changes in the economic climate across Spain, including the island of Tenerife, in the past years.
One of the main changes is the fast growth and increasing demand for bank repossessed property. For today, most bank owned properties in Tenerife are available to the general public. Thanks to new Government legislation, Spanish banks can own properties, which are sold quickly at a commercially viable price.
Bank Repossessions are Increasing in Tenerife
The number of bank owned properties in Tenerife is increasing due to the economic changes while the mortgage costs are rising as are the basic costs of living meaning that inflation is rising. Electricity, food, gas, and petrol prices have increased a lot in the last few years, so people with a mortgage on their Tenerife properties have less money to make their mortgage payment to the bank. The mortgage rates have also increased significantly in Tenerife. Those who have purchased property in Tenerife believed that low interest rates were here to stay.
Many bank owned properties in Tenerife are apartments, because many people invested in them and expected to sell the apartments at a healthy profit when their deposits were completed.
This worked for a long time, but now many buyers found their apartments to be worth less than they were when they bought them, so they either had to try to keep up with the mortgage payments or walk away and lose their deposit. Many of these speculators could not afford mortgages on their properties, so they had their apartments repossessed.
There are still many bank-owned properties in Tenerife available in the villages which are very close to the popular resort areas, such as Buzanada, Cabo Blanco, Valle San Lorenzo, and La Camella. Within the resort areas, repossessed properties are not often available, but once they appear on the market, they get snapped up in less than no time due to the increasing demand. Although the Tenerife economy seems to be improving, more bank-owned properties are still expected on the real estate market of Tenerife.
Advantages of Investing in Bank Owned Property in Tenerife
One of the major advantages of buying a bank owned house in Tenerife is that you are not required to pay transfer fees for the transaction. However, you will still be liable to pay the bond registration fees as well as the attorney’s fees for registering the property in your name. Anyway, the savings on transfer fees can add up to thousands. As the banks crave for getting rid of the properties on their books, there is a big chance to find a real bargain.
When you buy a bank-owned property in Tenerife, the only person you deal with is the bank. Some home buyers may prefer to not deal with homeowners. Repossessed properties are often vacant, so you will not have to deal with troubled homeowners, tenants reluctant to leave, or former owners threatening legal action. Moreover, when you buy a property from the bank, you do not have to deal with a seller reluctant to negotiate for sentimental reasons, because the bank has no emotional attachment to the property.
Unlike those properties that are sold at foreclosure auctions, you can always ask to inspect bank-owned properties before closing on a deal. Moreover, it is better for you to come and see what you are going to buy, before it is not too late. Bank-owned houses are sold “as-is,” and because of that you have to inspect it before committing to a purchase.
An inspection of the property might turn up minor damage and neglect, such as missing appliances, stains, and unkempt yards. Moreover, it may uncover the need to address larger problems, such as major leaks or holes in walls. Sometimes, bank-owned properties are distressed homes because the former home owners are usually not likely to keep the place up-dated or even move-in ready. Before moving in, serious repair work may be needed to be done.
Perhaps, the biggest reason for people to get interested in bank-repossessed properties in Tenerife is because of their below market value prices. But you should not think that you are going to get a steal.
Sometimes, bank-owned home that requires much repair work can become as expensive as a homeowner-sold move-in ready property or even more expensive. Remember that bank-owned houses and apartments in Tenerife are not all diamonds in the rough. Before making a purchase, compare the price of bank-owned properties with other homes in Tenerife and be sure to inspect it properly.
Disadvantages of Buying a Bank-Owned Property in Tenerife
Bank-owned property often comes in a poor state of repair as the former homeowner did not have enough money to keep the house or apartment in good repair. Buying property “as is” means that you do not have recourse to the owner (a bank) once you have purchased a house and discovered some defects afterward. The cost of repairing a bank-owned property may be considerable, and the expenses must be taken into account when you consider the total price the property of before making an offer to the bank.
If the bank-owned house is very old, the electricity, heating, and plumbing systems probably need to be replaced or totally overhauled. All of these repairs are very costly sometimes. Inspect the property, and bring along an engineer or building inspector who will be able to uncover existing problems and discuss with you the way of their repair.
Work with an interior designer or architect to completely understand what can be done to both the interior and the exterior of the house you are going to buy. Knowing the prices for the necessary repair works before making a purchase can save much money and stress afterwards.
If you want to purchase a bank-owned house in Tenerife, then make sure that the property is vacant. If the former owner refuses to vacate the house or vagrants live there, then it can result in a legal mess and you do not want to be involved in.
Other Issues to Consider When Buying a Bank-Owned Property
Whether you are going to buy a bank-owned house as an investment tool or as a home to live in by yourself, it is extremely important to make sure that the property has a good location. It is very important for your house to be located in a good area; there is nothing good to invest in a property that will never be sold again because of its bad location.
Purchasing a house in Tenerife is always a serious financial transaction. Do not be in a hurry to do so – now there are lots of bank-owned properties in Tenerife, so take your time and you will be able to get the bargain of a lifetime. Investing in property in Tenerife has become extremely viable over the past few years and with lots of bank-owned properties springing up all over the island, there is no surprise why foreign property investors flock here.
More and more people now understand the benefits of investing in Tenerife bank-owned property. The weather on the island of Tenerife is one of the main attractions for many tourists from all over the world. As other holiday destinations are affected by tropical storms, high levels of humidity, and extremes of temperature, Tenerife offers the best climate conditions with average temperatures ranging between 23-28 degrees and no earthquakes or hurricanes!
Investing in Tenerife property has one more advantage which is its investment value. Now you have a great chance to purchase a bank-owned property, repair it, and then sell it at a higher price! This is not the case in Tenerife. For the past several decades, Tenerife property prices have been increasing year on year.
When purchasing a bank-owned property in Tenerife, everybody takes into account its location as well as travelling time. A common concern of most people is the distance from the amenities and work.