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As investors wait for credit issues to sort themselves out worldwide, many of these same investors are keeping an eye on Spanish real estate. Spanish banks hold billions of Euros worth of properties, many of which they are willing to sell at a loss.  Banks, of course, are not in the real estate business, and holding these assets on its books can be a drain, especially if the properties are vacant.  For many of these businesses, the properties are a drain on their balance sheets, and as quarterly reporting dates come due, the banks will be more and more willing to make a deal.

That is where a well-informed investor can make a great deal, especially if the investor can pay cash.  Another advantage of paying cash is that there may well be a consolidation in the banking industry, with small and even medium-sized banks unable to withstand the strain of holding on to these non-performing assets.  Larger banks may buy out the smaller ones, resulting in fewer choices for those seeking real estate loans.  Owners who want to sell property in Spain may need to find an agent or broker with expertise in Spanish properties in order to obtain the desired level of coverage for their property.

If the anticipated contraction in Spanish banking does occur, overseas investors may have a distinct advantage when it comes to buying property in Spain, because they can likely apply to banks in their home country.  However, plans are afoot in Spain to boost the credit supply in-country, and if that does happen as planned, investors could see quite a few new opportunities open up. 

Investors looking for bargains can look to areas just outside larger metropolitan areas and resort or tourist destinations.  While these locations have not softened in price as much as others, good buys can still be found with a little searching.  The advantage, of course, is that these properties hold its value much better than many other types, and so are a much more secure investment.  In addition, these locations can be let out to holidaymakers for an added income stream for the investor.  This may also carry tax advantages to the investor, depending on a variety of factors.  As with any investment with income potential, it is a good idea to speak with your tax or investment advisor regarding various strategies.

While banks have been holding back its prime properties under ownership and selling off the others, should a bank become a takeover target by one of the larger Spanish banks, they would likely offer up some of the prime properties in a bid to raise cash and remove the non-performing assets from the balance sheets.  That is when an investor who has been keeping track of the Real Estate Owned (REO) for the various banks can make a considered investment.

By keeping an eye on the movements in the Spanish financial industry, the timing of investments can be made for the advantage of the investor.