When asking whether buying property in Spain is a good investment, home buyers need to factor in other considerations. Like anywhere globally, property sales can either turn out to be a dud and let down or a wise property investment that makes money. Spain presents lots of opportunities to start investing. Rather than look at the country's real estate market, drill down further about whether a town, city, or coastal resort presents opportunity for those looking to invest in properties.
Future property owners also need to consider other factors that can affect investment. The good news is that overall, for a mid to long term investment, Spain has much to offer, and with careful planning, research and due diligence, investors can grab themselves a bargain buy that turns out to be a cash generator. Let's look at how to invest in the property market of Spain.
Many people assume a good investment starts with an ideal property price, but it doesn't. All good real estate investors know precisely their hard-money status when buying properties. Now is the time to do a financial inventory. If borrowing money, shop around for low-interest rates. Don't forget when you buy investment property in Spain, you will deal in the Euro. Therefore, shop around for a currency exchange company that offers the best foreign exchange rates. Have an exact idea of how much ready cash you have and how much you need from a mortgage lender.
The purchase price isn't the only financial factor to focus on. Don't forget closing costs of the buying process and also yearly maintenance and running fees. These include notary, land registry, solicitor, and surveyor costs, alongside utilities and property taxes. Non-residents in Spain, should consider a management company for monthly checks and remember, owning a house involves yearly repairs and décor work.
Many a foreigner has inspiration to enter the renovation market, also known as flipping houses. This is a common practice all over the world. Buying homes that need renovating at a low house price, doing them up and selling them at a profit. However, the pay-off rarely works, more so if the property is an old rural house sometimes seen in small, remote, inland villages. More often than that, old houses have hidden flaws and a mountain of paperwork to navigate for them to match new properties on the market.
To diversify, overseas property investors often look to rental properties for a lucrative passive income, but careful homework and due diligence is needed. Financially, it works out if you have a set plan covering the marketing and tenant management. To reduce vacancy rates, choose properties near the beach, shops, bars, and restaurants. Additionally, for a maximum rental income, look around at current rented homes to know what yields to expect. Lastly, clever investors always make money and have a positive cash flow, but everyone still needs to pay taxes on rents. The per cent rate varies for EU and non-EU citizens.
One look at the Spanish property market reveals many destinations, from the Costa Del Sol to the Balearic Islands and famous places and neighbourhoods like the Costa Blanca, Marbella, and Puerto Banus. However, when it comes to investing in international real estate, the location needs just as much research as the actual property development. When looking at a residential property, drill down. What are the local amenities at hand, and more importantly, what are the local council's plans? Like any other market worldwide, Spanish real estate appreciates more in value when councils invest in infrastructure, local amenities, and industries like tourism. Likewise, investors buying a holiday home with plans to rent, should choose a top tourist hotspot to maximise occupied rate.
Any good real estate investor knows the key is to buy-and-hold, but have an exit plan to convert bricks and mortar back into hard cash suddenly. For this reason, every property investor also assesses liquidity, i.e., when it comes to selling property, how quick does the market move? In southern Spain, many markets attract both domestic and international buyers hence offer higher liquidity. Another example is remote destinations, that cut out any non-driving buyers, so good transport links are essential.
To understand the housing market even better, browse our portfolio of properties for sale. Including resale, new build and off-plan flats and villas for sale, each listing contains everything to know, including property prices, location, home features and contact details to find out more via email or telephone or arrange a viewing. When buying property in Spain with Spot Blue, your real estate investment will work in your favour.
We are Spot Blue real estate agent, and we have helped hundreds of people buying property in Spain to invest in the best local markets. Additionally, many foreigners who want to become ex-pats and residency or own a holiday home have used us. To chat more about the real estate market or if buying property in Spain is a good investment, call us today, or follow us on Facebook to stay up to date with property news from Spain.