With Spanish house prices continuing to climb and borrowing costs still weighing on buyers, one property investor is urging would-be purchasers to avoid mortgages altogether and look for alternative ways into the market.
Real estate investor Cesar Rivero, who regularly shares advice on social media, says taking out a traditional home loan in the current climate can be a mistake – particularly for investors.
His message is blunt: don’t rush into mortgage debt.
Buying without the bank
Rather than relying on a lender, Rivero promotes a strategy based on deferred payment purchases, which consists of negotiating directly with owners to pay for a property in instalments over several years.
He suggests starting with research, using tools such as ChatGPT to identify towns with low prices per square metre, good access to essential services such as hospitals and police stations, nearby universities, and a strong agricultural workforce.
These factors, he argues, often point to areas with steady demand for shared rental accommodation. Alternatively, some property portals make reports of the cities in Spain with the highest rental yields.
Once a shortlist of locations is identified, the next step is to analyse rental demand – particularly for room rentals – using major portals such as Idealista. Areas with strong room-by-room rental markets are then targeted for purchases.
Targeting neglected properties
Rivero advises investors to focus on run-down houses, closed properties, abandoned premises or even semi-ruined buildings — assets that often struggle to sell quickly. A key tactic, he says, is filtering property listings by older adverts, which can reveal homes that have been on the market for months with little interest.
From there, he recommends approaching multiple owners with offers based on deferred payments, rather than a lump-sum purchase.
If an agreement is reached, the property is bought before a notary with a small initial deposit, while the remaining balance is paid over an agreed period – often five, 10 or even 15 years. The contract typically includes a resolutory condition clause, which protects the seller if payments are missed.
Turning it into an income stream
Once acquired, the strategy is to renovate the property and rent out individual rooms, generating income that can be used to cover instalments and fund future investments.
Rivero argues that this model can be repeated multiple times, as it avoids the affordability checks and borrowing limits imposed by banks.
What is a deferred payment purchase?
A deferred payment sale allows a buyer to acquire a home without paying the full price upfront, spreading payments over time under terms agreed with the seller. It can appeal to buyers who lack access to large amounts of capital or want to avoid mortgage financing.
For sellers, the arrangement can help move a property more quickly, especially if they don’t urgently need the cash. Safeguards are usually built into the contract, such as retaining ownership until the full amount is paid, or cancelling the sale in the event of default.
In Spain, these agreements fall under the principle of contractual freedom set out in the Civil Code, allowing buyers and sellers to structure deals as they see fit.
For buyers, deferred payments offer greater flexibility and remove the need for bank approval, but they can also result in higher overall costs if interest or penalties are included.
Sellers, meanwhile, may attract a wider pool of potential buyers and even earn additional income through interest. However, the risk of non-payment remains the biggest downside, requiring careful legal safeguards and financial planning.
As Spain’s housing market continues to heat up, deferred payment deals are gaining attention, but experts agree they should be assessed case by case, with proper legal advice, before ditching the mortgage route entirely.
