The land is right now the most in vogue speculation resource because of the ongoing development of the Spanish economy, the expansion in rental costs, the dynamic revaluation of properties and the upturn in the travel industry in Spain.
If you are considering investing in the real estate sector in Spain following are some tips to help maximize profits:
As indicated by the IV Casaktua Study, 10% of Spaniards who are presently searching for another property do as an investment within the real estate sector. The profile of these purchasers is that of mature employed people somewhere in the range of 45 and 54 and with venture reserve funds of somewhere in the range of 100,000 and 150,000 euro. As far as choices, every Spanish respondent to the survey said it is ideal to purchase a property so as to lease (33%), holiday rental (14%) or renovate and sell on (12%).
- Weigh up the advantages and disadvantages: would it be a good idea for you to purchase to lease or purchase to sell? Securing a property to lease/rent has the advantage of giving you fixed monthly payments and a property which will inevitably increase in value. Another option is holiday rental, the upsides of which are a higher revenue than a conventional rental, payments ahead of time and more accessibility of the property for your own pleasure. Then again, purchasing a property to sell on later conveys a lower financial risk providing that it is sold at a more expensive rate than you got it for, this can often provide you with a substantial amount.
- Choose your property dependent on the venture objective: the sort of property you purchase will change depending on what financial option you chose. Properties that are furnished with a couple of rooms are perfect for short – term summer rentals. As for long term leasing/rentals, the most fitting option would be a well-positioned 2-or 3-room, outside apartment with a lift and a parking spot.
- Go for large urban areas and renowned holiday resorts: in the event that you want to purchase with the aim of selling, it is ideal to decide on Spanish urban areas, for example, Madrid and Barcelona where the market is dynamic. Other strong purchasing areas to be considered are, for example, Santa Cruz de Tenerife, Palma de Mallorca, Valencia, Malaga, Alicante, Pamplona, Gipuzkoa or Murcia, regions that are seeing more revaluation of housing costs. The area is additionally significant when considering leasing/renting. Madrid, Barcelona and San Sebastian are the costliest urban areas. The most touristic areas, for example, the Costa Blanca and Costa del Sol, are likewise superb choices worth considering for both investment types. The reason lies in the developing interest for second homes in warm coastal areas and the increasing demand for short-term holiday rentals.
- Prioritize developed areas: the best spot to search for homes is ineffectively mature neighborhoods with reasonable prices, good demand for lease/rents, public transport connections and amenities close-by. In Madrid, for instance, the areas flanking the M30 ring road are proving to be an intriguing option. It is additionally smart to consider investing in University and business areas as they will consistently be sought after. The best alternative, obviously, is to purchase a property in the downtown area, yet the underlying venture will considerably more.
- Properties in great condition: regarding rentals, it is critical to remember you’re your property must be in excellent condition to entice tenants. In the event that you need to reform the property after you buy, you should guarantee that the price tag is low enough and that the property does not present any unforeseen expenses. This is the best way to make renovating costs more reasonable. The normal expense of a total home makeover can be around 450-500 euro/m2 (depending on what quality finishes you require this can increase).
- Calculate the profitability: to calculate the investment, you need to consider other factors than just the purchase price. You additionally need to include the duties/taxes, the costs of a lawyer, notary, etc. and the property reform (painting, electrical appliances, furniture, and so on.). Once all these costs have been taken into consideration you will be able to calculate the profit of your potential investment property in Spain