What mortgages does the bank offer to buy a home as an investment?

Published on June 20th 2018

In second residences less money is granted and for less time

The brick is again attractive, but not in the way it was in the years before the housing bubble. In the 90s, investors bought houses to sell a few years later, pocketing large capital gains.

The approach is now quite different: the formula consists of buying to rent and squeeze, thus, the juicy yields that the tourist rental provides, more profitable than the traditional one. 

The rent of all life offers a profitability of 7.3% - a year ago, the data was 6.3% - according to a recent study by Idealist, while various voices suggest that the short-term can reach double digit if a high occupation is achieved.

"Many people are already investing in housing as an alternative to saving the pension, and 85% of those who buy a house as an investment do it to rent it," as pointed Beatriz Toribio, director of studies of Fotocasa.

According to the data of this real estate portal, 34% of Spaniards who acquire a second residence plans to allocate it to the holiday rental, that is, to offer it to tourists for short stays. Only 7% will choose to dedicate it to traditional leasing. And still an immense majority - 59% - will do it to enjoy it with their family.

Now, what conditions do the entities require when requesting a loan to access a second residence? The starting point changes, since, in this case, the client already faces the monthly payment of a mortgage. The conditions harden slightly, since the bank pays less money and for less time than when the house to finance is the first. The interest, generally, does not vary.

 

Source: El Economista