Content
Investment expectations
What type of housing to choose for investment?
How to get real estate income?
Costs and risks
Okupas (Squaters)
The best locations in Spain for real estate investment
The best investment is in yourself and your family. Health, education, travel and comfortable housing in a good location are the goals of most sane people. Spain traditionally attracts residents of northern and eastern Europe and there are several reasons for this.
- Healthy climate and natural diversity. The life-giving coolness of the Basque Country, the air of the Mediterranean coast saturated with sea salt and coniferous aromas, 24 rivers, the most famous of which is the Ebro, the delta of which is a real natural pearl. Whichever province you choose, you can be sure that the weather, for all its unpredictability, will be milder and more comfortable than in the northern countries. Over the years, people begin to appreciate this factor.
- Infrastructure, including transport, is developed almost everywhere in Spain. Even fishing villages and remote farms amaze with their well-groomedness and the possibility of access to all the benefits of civilization.
- Combination of historical and later unique architecture. Spanish urbanism is characterized by harmony in eclecticism - abundant park vegetation and art objects are organically combined with historical buildings, masterpieces of Gaudi and other Spanish architectural geniuses and coastal infrastructure.
- A benevolent atmosphere, stable and clear legislation, a worthy place in the EEC, a developed economy combined with care for nature, a special Mediterranean lifestyle, excellent cuisine and an abundance of cultural and entertainment facilities make life in Spain rich and measured at the same time.
- Reasonable property prices. Most countries are attractive in their own way, but it is difficult to find such a successful combination of all vital factors in one country. However, due to the high pace of construction, openness to investment and fair competition, prices for most properties do not seem shocking.
It is logical that most tourists who have visited anywhere in this country have the idea of a place to spend part or all of the rest of their lives in Spain, and many make their dreams come true. However, the tastes and life aspirations of people are diverse, and fortunately, Spain allows you to realize most of them.
Investment expectations
Among the tools for generating income, real estate stands apart. The fact is that, unlike securities, cryptocurrencies and precious metals, housing or commercial premises are an object of prime necessity for most people. According to this factor, real estate can only be compared with traditional currencies - you can live without shares, but without a roof over your head and money - it is difficult.
Therefore, it is incorrect to compare income from rental housing and, for example, speculation with securities or playing on cryptocurrency pairs. Again, let's not forget about the risks - real estate can become more expensive or cheaper, but it will always be in demand, and extracting passive income from it does not require special skills.
First of all, Spanish real estate attracts with the opportunity to improve the quality of life and save savings. From this point of view, the investor has quite bright prospects.
However, for many, the conditions of work or business may not allow them to spend most of the year in their Spanish home. In this case, there is a reasonable temptation to derive passive income from short-term rentals. And this is also quite realistic and feasible.
But there is no reason to hope for a quick speculative income based on an explosive rise in prices. There is every reason to believe that the trend that has developed in recent years towards a relatively small but stable increase in prices for Spanish property will continue in the medium term.
What type of housing to choose for investment?
Investments in new construction are more profitable. Provincial data may vary, but according to the Instituto Nacional de Estadistica (INE), new builds, on average, increase in price by 7.46% per year, while the secondary sector did not increase by 2%. Considering that the purchased new building eventually becomes a secondary housing, which is represented by a variety of offers according to the year of construction and location, you should not rely entirely on average statistics. However, you can safely count on a 3-4% increase in the value of your asset.
A popular scheme is to buy several small apartments in popular tourist areas, for daily rent and a condo or cottage for yourself and your family in a quieter area. This option allows you to enjoy life in a Mediterranean climate, living on rental income. It is also important that when life plans change, it will be easier to sell several objects of a small area and even benefit from it.
Spain provides an excellent opportunity to be realized in a narrower niche and make real estate part of your business. For example - the estate can be perfectly used for organizing celebrations and other events, having an apartment in a marina or a house in a fishing village, a boat and tackle, you can organize a fishing holiday on the coast or in the Ebro Valley, a house next to a golf club can be rented out to fans of this sport - There are a lot of options, the main thing is to understand the mechanisms for attracting a specific client base.
In each investment-attractive city, depending on the area, you can choose a bungalow, part of a cottage for several owners, a villa or apartments in apartment buildings of various years of construction.
But apartments in residential complexes remain a priority for most investors.
Those who focus on new buildings should take into account that after the recession caused by the pandemic, investment funds have again become more active in this segment. In 2021 alone, their share in new buildings increased by 22%. We are talking about affordable housing. This fact does not directly affect the price of real estate, but speaks of the market demand.
How to get real estate income?
The most common are two options.
Lease for a long time. Spain is a hospitable and tolerant country with a developed economy, an active cultural and creative life, as well as an authoritative scientific environment. Hundreds of thousands of expats are working and educated and, of course, in need of rental housing. Of course, the income from this method of passive income is significantly lower compared to daily rent, this option is quite suitable for an investor who shrewdly wants to invest in real estate today, and plans to move at a much later date. In this option, your property generates some passive income, you do not incur ongoing maintenance costs, and long-term tenants tend to take good care of your property.
Short term rental. In this option, the apartment works practically in a hotel mode and it is not always necessary to count on the adequacy of the guests. On the other hand, income from the tourist season compensates for the inevitable costs.
In both cases, if you do not plan to handle short-term rentals yourself, or do not personally know long-term tenants, it is worth resorting to the services of a professional property management company with a good reputation and legal support. She will take care of everything, and you will only have to receive rent, not thinking about the maintenance of your foreign property.
Costs and risks
In almost any major city in Spain and along the entire coast, profitable real estate can bring a steady income.
In Spain, there are no restrictions on investments for citizens of other states, therefore, as soon as there were signs of lifting epidemic restrictions, by the end of 2021, the number of real estate transactions concluded with foreigners increased by 1.5 times.
Spanish legislation is based on the principles of the European Union and protects private property and the rights of investors. Real estate taxes vary by province and these amounts, as well as the cost of a tourist license required to legally rent out housing, should be inquired in advance.
The cost of the transaction itself will be about 17% of the transaction amount.
- VAT for a new building ranges from 7 to 12% of the contract amount.
- Tax on the transfer of ownership - from 6 to 10% of the cadastral value.
- Also, the buyer pays notary and registration fees - from 1000 to 1650 €.
- Services of realtors will cost another 3-5%.
Also, if your choice fell on real estate in the budget segment, then it is worth evaluating the area in the evening. Some sleeping areas, nice and calm during the day, can be too noisy at night. Also, in such areas, after the mortgage crisis of 2008, another problem has become relevant.
Okupas (Squaters)
We do not undertake to talk about social justice in the framework of this article. But the unauthorized settlement of people in an empty property can lead to a lengthy legal battle.
Free advice. If you are just going to lock up your apartment or house, and want to visit Spain whenever you like, then it makes sense to conclude an agreement for the protection of your property with the police. In this case, any intrusion will be regarded as an attempted robbery, and this no longer gives uninvited guests a chance.
On the territory of closed residential complexes and in prosperous areas there are no problems with unauthorized settlement.
Problem areas exist in all cities of the world, and the Spanish "bad areas" carry much less risks in terms of crimes against the person than in many metropolitan areas, but property in such places is better controlled.
However, such problems concern only certain specific areas, and the extremely low price for an apartment acts as a marker here.
The best locations in Spain for real estate investment
Spain is so multifaceted that everyone can find their happiness in it.
Therefore, it makes no sense to give aesthetic recommendations, someone likes a measured life in the foothills, and someone likes to be in the center of a noisy party on the coast. And if there is a goal to change endless fogs and rains, or severe frosts to a more friendly, in every sense of the term, climate, while remaining within the boundaries of European legislation and lifestyle, the choice is obvious - Spain is open to friends.
Naturally, living a full life, combining business and pleasure, is best in places with an active social life and a developed tourist infrastructure. One of these places is the province of Alicante, the Costa Blanca and its adjacent territorial entities.
A healthy Mediterranean climate, developed tourist and social infrastructure, an abundance of entertainment for people of all ages and temperaments attract millions of guests.
If you decide to invest in your comfortable and warm future, acquire profitable housing, or combine these goals, it's time for you to contact the Alicante Real Estate agency. Your personal manager will provide you with qualified advice, taking into account your wishes and the planned budget, will select and show real estate options, and full-time lawyers will ensure the impeccability of the transaction and give advice on taxation. For owners of investment property, we will ensure its rental on favorable terms, as well as take care of all the maintenance, during the absence of the owner.
How much will you earn by renting out your apartment?
Call now and make your dream come true with Alicante Real Estate!
