Rentals Question
May 30th 2016, 9:24 am
#1
Account Closed
Thread Starter
Joined: Aug 2015
Location: Los Montesinos
Posts: 204
Rentals Question
Do Spanish banks have any restrictions on you renting out your property whilst you have a mortage with them similar to UK buy to let schemes etc.
I had this question asked of me this morning and the reason is the owner has decided to rent a cheap apartment and rent out the house they own and hope to cover costs of cheap property and mortgage the mortgage on the property they own is on interest only repayment as agreed with their bank due to hardship
I can see what they are trying to do as they have told me their interest only payment is about 350€ per month and the rent of an apartment is 250€ per month and they hope to rent out the house at 500€ per month.
Surely the banks would not like this
anyone know?
I had this question asked of me this morning and the reason is the owner has decided to rent a cheap apartment and rent out the house they own and hope to cover costs of cheap property and mortgage the mortgage on the property they own is on interest only repayment as agreed with their bank due to hardship
I can see what they are trying to do as they have told me their interest only payment is about 350€ per month and the rent of an apartment is 250€ per month and they hope to rent out the house at 500€ per month.
Surely the banks would not like this
anyone know?
May 30th 2016, 9:27 am
#2
Joined: Jun 2006
Location: Granada Costa
Posts: 10,901
Re: Rentals Question
The bank doesn't own the property, so unless there is something in the mortgage agreement, you can do what you like.
I know many people who let mortgaged properties. Anyway, how would the bank know?
I know many people who let mortgaged properties. Anyway, how would the bank know?
May 30th 2016, 9:36 am
#3
Account Closed
Thread Starter
Joined: Aug 2015
Location: Los Montesinos
Posts: 204
Re: Rentals Question
Fred good point - how would bank know
Just read the thread on that girl in Barcelona - wonder if a similar thing could happen here if the owners do not declare the rent as income etc.
Maybe it is a good earner agree an interest only deal on your mortgage then rent out property for more than you pay the bank
Just read the thread on that girl in Barcelona - wonder if a similar thing could happen here if the owners do not declare the rent as income etc.
Maybe it is a good earner agree an interest only deal on your mortgage then rent out property for more than you pay the bank
May 30th 2016, 9:40 am
#4
Joined: Jun 2006
Location: Granada Costa
Posts: 10,901
Re: Rentals Question
One thing that you have to be very careful of is, if you let long term to a Spanish taxpayer. He has to show details of the property that he lives in and give the catastral reference number. The tax office cross checks the owner's details with their tax returns and pick up undeclared rental income that way.
