Is it a good idea to go for buy to let now?

 I want to buy a small flat in Sevilla, Granada or Madrid as an investment. The price I am looking for is 100 K and I will put 20-25 k. the flats I am looking at (studios to 2 bedroom flats). do you think it's a good idea? I am worried about many things.. not being able to rent it out easily. 2) the tenants not paying 3) the ecnomic situation is Spain 4) and is it a good idea in general? 

I am looking for your advice.

thanks  

 your question is like the how long is a piece of string one

there is no answer

I don't think buying in Granada/Sevilla is a very good idea.  Unemployment in Andalucia is very high (over 30%) so there is not much demand for rentals, especially with losts of Spaniards moving back in with their parents.

Madrid would be a better idea but I don't think you'd find anything decent there for 100k, at least not in central Madrid.  What sort of rental yields are you expecting?  I think you'd only get 4-5% in Madrid, which is not great...

If you did a buy to let it would have to be in an area where there is demand, otherwise I would think it would be too risky.  I agree with sanchez1, Madrid would be your best bet but your budget seems a bit low so I doubt you'd find something in a decent area.

 the thing is that Granada is a university city while Sevilla has 2 universities and they have a huge student community especially Granada. My mortgage would be something like 250 euros a month while the rent could be 400-500 Euros a month. There are OK flats in central Madrid in an area called La latina which is also a young people´s area.

You would need to be very careful about the area and the type of tenant that you would be getting. In the event that you end up with a tenant who refuses to pay its very difficult to evict them especially if you aren't a resident. Rental income is often well shaken by the time agents fees and all the other charges are paid.. 

 how much are the agent fees? is it 10% of the rent for instance? and can I ask the estate agents to evict the tenant if they refuse to pay? also what other charges I have to pay ? Tax for example if my flat worths 80k euros and the rent is 400-500 a month how much tax I will be asked to pay annually ? I am just looking for a rough estimation.  

 Agents fees are usually one months rent per annum. However, there is often an additional charge to cover dealings they may have with repair men etc. In my case this is a one of charge of €300.

Regarding eviction I haven't directly had to deal with yet (thank god). From what I gather an agent will look after it but it is a very long procedure and tenants rights are very strong in Spain. 

Other charges include IBI (Council Tax), Non Resident Property Tax (If applicable) €300 per annum. If you are in an urbanisation you will also be liable for communidad fees and possible entidad fees.

You will be liable for income tax of 24% of an profit you have made on the rental. You can now offset mortgage interest etc for example against rental income.

 There are quite a few properties on the market at the moment where owners are using rent to buy as an option, you could do this and then let it out for holiday rentals??? I think your budget is a bit low for the cities, if you came out of the cities you could pick up a fully reformed 2/3 bed house for around the 80k mark complete with furniture. As a holiday let you could rent for between 250 to 500 a week depending on the time of year. You would have to pay for cleaning and keyholding though probably around 60 euro a changeover. Just a thought!!

Caz

thanks a lot guys! I appreciate your advice! 

figo79

 the thing is that Granada is a university city while Sevilla has 2 universities and they have a huge student community especially Granada. My mortgage would be something like 250 euros a month while the rent could be 400-500 Euros a month. There are OK flats in central Madrid in an area called La latina which is also a young people´s area.

As I understand it, most Spaniards to stay at their home town university and don't tend to venture too far away from home.  So I don't think you have the same kind of student rental market as you do in the UK.  You seem to be interested in areas where there are young people, but with youth unemployment at over 50%, I'm not sure that is wise at the moment...

La latina looks an intersting area though, with some reasonably priced property.

 there are two bedrooms flats in La Latina in Madrid and other residential areas in Sevilla for 100 k or even less. The are in an OK condition. I can get those and let them out to families. but I am really worried about them not paying the rent after a while. I was thinking to use estate agents for this to make sure that they take care of this hussle. 

 Getting a mortgage might be an issue, unless you have a big deposit.

 is 25% ok? or they would want more than that? 

 Possibly, 50% would be better, don't forget on lower price properties you will also need 12-15% of the property value for fees etc. Most repossesion properties are being offered with 100% mortgages, but a lot are over priced due to the banks trying to get there monies back.

 Wow I did not know this! 12-15% on the low priced houses! that's a lot. If the local banks are not going to accept the 25% I am offering I will try an International loan. let's see. 

The Notary fees and Tax have recently gone up, as well as this you have legal fees. I hope you manage it.

 http://www.spanishbankproperties.com/sale/ Try this!!

 wow these houses are nice!! but are they easy to rent out? 

 Hi figo79

There are replies else where on eyeonspain saying you would find it very hard to make any money renting out a property on a buy to let in Spain. With your level of investment you can make £200 per month in the uk on a buy to let property. It may not have the same romanticism as a Spanish one but at least it will pay for itself. Your buying feees will be less than £3000 rather than £10000.

Eviction of scum tenants will be a problem where ever you buy but expect to be £1000 in the uk if court action is needed. Any debt run up by the tenants is not tied to you or the property in the uk - their £2000 gas/electric bill is not your problem. You will also have lots of legitamate expenses you can put againt your profit, not as much as a tory peer though.

You could even build up a small property portfolio in the uk and use it to pay for a Spanish property.

Remember for student lets you may only get income for 9/10 months and potentially have higher refurbishment costs every year.