Investing in property in Spain
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Every now and then someone asks me about investing in property in Spain usually long-term 5+ years and taking advantage of the market when it’s down etc. These are private individuals and not what we might call real investors.
My initial response is usually quite negative and of course I point out the high acquisition and disposal costs and all the other annual costs that go hand in hand with owning a property in Spain and that’s not even mentioning all the risks and of course the harsh tax rules applying to the taxation of rental income etc
But if they want to buy a property using it for family holidays and renting it when not here etc then that’s a different story altogether.
But my question is would anyone recommend buying a pure investment/rental property in Spain and if so what type of property or development and from where?
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Faro,
I know many people renting still now and not having a problem, specially in the Mijas Costa area. As long as your property is well priced you will rent. Obviuosly it is much harder to rent the further up the hills you are. Some properties in the Calahonda and Riviera del Sol area are way past the toll road and no one lives up there, there are loads of empty properties and tones being reposesed, no one wants to live in a ghost town.
If you go to the lower areas you will see that prices are still fair and that properties are renting and selling.
One of my close friends is selling her villa which is 260m² built for under €500,000 and i can guarantee you it will not be on the market for long at all! It is not even with the agencies yet and she has already had a few offers, that just goes to prove that if you have the right price you can make it.
You can always make an investment work if you now how!
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I would say your initial ("quite negative") response is the correct one, for all the reasons you mention, and add to that that unless you are living in Spain and can keep a close eye on your investment yourself and manage it, then you would probably be best advised looking for an investment closer to home and one that you understand better.
On the other hand, there are certainly some interesting opportunities for someone who is just looking for a long term place to park some dosh, not necessarily needing an immediate return on their capital. Whether or not prices will rise over the next few years to levels similar to what they were is the stuff of crystal ball gazers, but if you stick to well established, well populated towns with year round residents, and avoid all the new developments (i.e. location location location) then I would imagine you will not go too far wrong. How about a 3 bedroomed apartment in a popular residential street close to Torremolinos town centre for €100k?
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