Buying property in Spain as an investment
Investing in foreign real estate is a reliable investment with an average return. They also attract Russians by the opportunity to earn on savings in euros, since in recent years the rates on foreign currency deposits are extremely low. One of the main ways to recoup the investments made is to lease real estate. In the list of countries that allow you to earn in this way, Spain is one of the first places.
Spanish rental market
Today in Spain, more than 20% of housing is leased. Experts note that most of the young families that previously saved up money for their own homes now prefer to rent housing. Add to this that Spain is one of the most popular tourist destinations, and it will become clear why a rental business, if properly managed, brings a stable income of at least 5% per year.
The most popular among tourists are Barcelona, Mallorca, Murcia. The occupancy rate of real estate in Barcelona reaches 90% throughout the year, since tourists come here not only in high season. Another profitable region for the rental business is Valencia, but here the majority of tenants are students. Spanish universities are actively involved in exchange programs, so there is always a demand for apartments near them.
Recommendations for the delivery of real estate
In order for your property to bring you income, not trouble, you need to consider several important factors.
At the stage of choosing the investment object, decide which is more profitable for you – residential or commercial. Housing is easier to rent, the tax in this case will be less, but if you are not lucky with tenants, the problems will be daunting. Income from renting commercial real estate is taxed at a high rate, and finding tenants is not so easy, but if tenants suddenly stop paying or ruin the premises, it is much easier to evict them and receive compensation than in the case of residential real estate.
If you decide to rent residential property, decide whether you will earn on a short-term (tourist) lease or will rent apartments for a long time. The type of license you have to purchase depends on the type of lease. So far, compliance with this law is not monitored very strictly, but, for example, surrender without a license of real estate in Barcelona will ruin you. A similar approach is common in a number of popular tourist areas. Short-term rent is considered if housing is rented out for less than 1 year.
It is important not to make a mistake with the location of the housing. In tourist areas, the object should be located as close as possible to attractions or to the sea, in student – to the university. It is not worth investing in real estate in disadvantaged areas. It will not bring profit to you, but there will be many problems.
The type of housing is also important. For income, the best option is a small studio or two-bedroom apartment. Apartments with a large number of bedrooms are more profitable to rent “room by room”, but in this case you will have to pay extra attention to the service.
Do not make a contract yourself, at least until you become an experienced entrepreneur. Different regions of Spain have very different laws. You cannot take into account all the nuances, which means you will lose either money, or time, or the right to enter the country.
Check potential tenants carefully. Ask the tourists for a copy of their passport and visa so as not to run into illegal immigrants, when renting for a long period you will need a statement from the tenant’s bank account, a copy of his work contract and a letter of recommendation (preferably not one) from the previous landlords. These measures will not protect you completely, but will significantly reduce the risks.
Ways to rent real estate
There are two ways to rent real estate – on their own and with the help of intermediaries. The intermediary may be the manager or agency. This option is suitable for those who do not know Spanish, and for those who are not ready to devote themselves to the rental business completely.
The fact is that it is not enough to find tenants, although the search itself takes a lot of time. You will also have to solve their issues, which are very different – from theft of a passport to a broken washing machine, and these questions arise at any time of the day. There is only one minus in working with intermediaries – they will take away almost a third of rental income from you.
If you do not want to pay intermediaries, then the easiest way is to use the portals where ads for real estate are placed. In Spain, this is Idealista.com, Milanuncios.com, Habitaclia.com. For those who do not know Spanish, you can recommend Russian-language forums and groups in social networks. Many emigrants, students and tourists are looking for housing there. In addition, there are also English-speaking international portals airbnb and booking. Note that all intermediaries take a commission for their services and without fail submit information to the tax authorities of the state.
Real estate expenses
The property you purchased should not be idle, otherwise it will be unprofitable.