Can you imagine winning the lottery and receiving a prize of 400,000 euros? For many Spaniards, this poses a crucial decision: plugging financial holes or finally buying a home? According to an iAhorro survey analyzed by Fotocasa, these two destinations are the clearest for most.

At a time when property acquisition has become challenging for economic reasons, the lottery prize seems like a golden opportunity to become a homeowner. However, is that really the best choice, and what factors should you consider before investing your winnings in a home? Here we share with you five crucial points you should weigh, although it is always wise to seek the advice of a financial expert before making such an important decision.

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1- Taxes and expenses associated with the purchase of a home

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While the gross prize may be 400,000 euros, after taxes, you would be left with around 328,000 euros net. In cities like Madrid or Barcelona, where the price per square meter exceeds 4,000 euros, this amount might not be enough to acquire a property.

In addition, you should consider the additional taxes and expenses when buying a house, which represent between 10% and 12% of the value of the property. Therefore, to cover these costs, it would be prudent to look for properties under 300,000 euros.

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2- Long-term maintenance costs

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Buying a home involves not only a down payment, but also ongoing expenses. From municipal taxes to property maintenance, these costs must be considered. If the home requires special care, such as landscaping or swimming pools, you should make sure you can afford these expenses out of your regular salary.

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3- To avoid decapitalizing yourself completely

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Using the entire award to buy a home can leave you without an emergency fund for future unforeseen expenses. It is essential to evaluate your current financial situation and consider other options, such as allocating part of the award for housing and relying on financing for the rest.

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4- Access to better conditions with partial financing

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If you decide to finance part of the purchase, you may be able to access better conditions and lower interest rates from banks. However, this also entails financial risks that should be analyzed with an expert.

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5- Investing in rental properties

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Another strategy to consider is to invest the money in a rental property. This would generate recurring income, although it will also require maintenance expenses.

Ultimately, the decision will depend on your personal preferences and financial situation. Consulting with experts, considering the costs associated with the property, evaluating financing options and weighing between buying a home to live in or investing in rental properties are essential steps before taking the plunge. Choose wisely and make sure you make an informed decision!