Investing in property in Spain: what you need to know?

Hospitable and sunny Spain has long been one of the most popular tourist destinations. Real estate in Spain is increasingly attracting the attention of foreign investors. The housing market in large cities is developing steadily. Rural areas are being in great demand, for which the price of the issue is much lower than in resorts. Investments in real estate in Spain have always been, are and will be in trend, both among residents of European countries and in the post-Soviet space. What a novice investor needs to know will be discussed in this publication.

The main reasons for investing in real estate in Spain

Before discussing the questions "where?" and “how?”, consider the principal motive–“why?”. Why invest in real estate in Spain? There are three main reasons you should invest:

• Real estate on the sea coast in one of the most popular countries among tourists in the world;
• Guaranteed high income from investments, as well as their high liquidity;
• The desire to do business in an economically developed country with high social standards and living standards.

In addition to purely aesthetic pleasure, real estate in Spain allows you to abstract from the harsh realities of the Ukrainian or Russian economy. By the way, the bureaucracy in this country is no less developed than ours. So, nostalgia for this aspect of life is unlikely to arise. But in all other respects, Spain is at an incomparably higher level of development.

Regardless of the purpose of immigration, employment or doing business, an important condition for staying in the country is a residence permit in Spain. It can be issued when buying a property worth from 500 thousand €.

You can consider investing in real estate in Spain to rent it out. We suggest you familiarize yourself with the following figures, which will help you understand the profitability of such a transaction. The average price per square meter of housing in major cities in Spain will cost about 3,000 € and more. For the province, this figure is much lower - up to about €2000. Thus, you can buy an apartment in Spain from 100 to 125 thousand €. Renting a one-room apartment in tourist centers ranges from €650 / month. On the outskirts - from about €500 / month.

Thus, renting an apartment in Spain can annually bring its owner from €7800. Considering the associated costs and taxes, which amount to about 24%, the net annual profit is approximately 6,000 €, which allows you to recoup the purchase price in about 16 years. Considering that real estate prices are systematically increasing, the return on investment will take place earlier.

What is the residential real estate in Spain?

Before choosing something, familiarize yourself with the entire range of offers. It is possible to distinguish real estate primary, secondary and "semi-new". In the first case, we are talking about buying a home from a developer. The second option includes apartments or houses where people have already lived. We are talking about "semi-new" real estate with resale of housing, without its initial settlement.

Most often, the latter option is the most expensive, as the real estate buyer is trying to resell it for maximum profit. But the choice between "primary" or "secondary" is no longer so unambiguous. Of course, new real estate using modern construction technologies can save you from several "surprises" that periodically arise during the renovation of old housing. But if you go to Spain for national flavor and romance, then it is easier to find them on the old streets of "secondary" real estate.

Also, residential real estate in Spain can be represented by houses, apartments and lofts. If everything is clear with the first two types, then lofts are a relatively recent trend, gaining popularity since the mid-1980s. A loft is an old industrial building converted into housing. Enterprising Europeans decided in this way to give a "second life" to abandon plants and factories. Their disadvantage is that initially these premises were not intended for human habitation, thus requiring additional repairs and decoration.

As property in Spain is divided into free and socially protected. Free real estate is actively sold by real estate firms and is distinguished by speculative prices. Housing with official protection is subsidized by the state and sold at a minimum price.

In which region of Spain is it better to buy property?

Housing prices in Spain depend on several factors, among which location plays a significant role. The most popular cities in Spain include Alicante and Valencia. The first one is distinguished by the saturation of nightlife and the variety of offers for active leisure. Valencia is more moderate and calm, while being a powerful cultural and intellectual center of Spain. These rather different regions are united by friendliness and hospitality to foreigners, as well as a peculiar Spanish mentality, in which the simple pleasures of life are valued above money or a career.

On the islands, prices for small apartments start from 85,000 €, within walking distance of the sea. A townhouse of 150 sq.m with a plot of land and a swimming pool can be found for 300,000 €.

Alicante is one of the most loved destinations by foreigners on the Mediterranean coast of Spain, with plenty of coastal accommodation options. Those who are interested in an apartment on the coast or a house by the sea go to Alicante.

Those who want to buy apartments in Spain pay no less attention to the Costa Blanca. On average, the price of an apartment in the southern part of Alicante to Pilar de la Horadada is the most affordable in the Spanish Mediterranean and starts from 100 thousand €. There are many attractions here, all kinds of festivals are held, and sports life is also striking in its activity.

The northern part of the Costa Blanca - from Benidorm to Oliva - is more picturesque, greener, but also more expensive. For comparison: the average price per square meter in Alicante in the city center is €2500, and in Benidorm €3000/sq.m.

Investments in real estate in Spain are characterized by high profitability and liquidity. In addition, an apartment or a house in such a picturesque country allows you to escape from the cycle of everyday life and relax on the seashore. Real estate in Spain, despite periodic difficulties in value, traditionally remains in trend, only having time to provide new properties to meet unabated demand.