Usually, clients who wish to buy a property must have enough savings to pay at least 20% of the property’s price plus taxes, and notary and property registry fees. Many are not able to overcome this first obstacle but new rental companies with option to buy have recently entered the market.
Albeit this service is not new and has been used by classic estate agents for a long time, these emerging companies born from new tech have empowered the market through the appearance of economic models that try to improve the connection between owners, tenants, or potential purchasers.
Sara Arranz, TresHabitat’s manager, believes that rental with option to buy ‘is an ideal formula to comfortably pay a flat deposit since rental agreements are for standard duration so the client can occupy the property from the very beginning.’
It’s an uncommon method since ‘the seller makes the biggest sacrifice by letting the property at the buyer’s disposal and allowing them to pay the initial 20% in easy instalments.’ For this reason, Arranz recognises it is ‘difficult’ to find owners willing to offer this practice since the funds are not immediately available to the seller.
When entering into an agreement, Arranz takes into account two details: drawing up, on the one hand, an agreement according to the Spanish Rental Property Law and, on the other one an agreement with the option to buy.
This contract does not necessarily mean more expensive or cheaper rental fees compared to a regular one, but it does imply a higher initial investment since a purchase option charge must be paid, generally much more costly than deposits. Furthermore, in the case of fees and unlike what takes place with guarantees, the initial investment is lost should the tenant not buy the property.