Buying a property is not an easy task. Not only is the process full of legal steps and issues to consider, but also each country has its own peculiarities, and as a foreigner, it can be hard to grasp them fully. That is why in this article you will find our best tips for an easy and successful real estate investment in Spain. We will explore the 7 recommendations on how to invest and end up fully satisfied with your decision.
How to find the best value-for-money locations and properties
Out of all the factors that define a good purchase, the location may be the most important one.
In that sense, one of the main consequences the specific location generates is a difference in price per square meter, a crucial indicator when comparing real estate opportunities.
In Spain, the price per square meter changes drastically from one region or autonomous community to the other. And that is why this can be the first filter you can use to find your ideal deal.
Catalonia, Madrid and the Basque Country are the regions with the most expensive prices for square meter; while Murcia, la Rioja, the Canary Islands, or Extremadura offer the cheapest options. You can learn more about rental prices in Spain in this article.
This analysis may help you dismiss many areas and end up just with those 2 or 3 that really fit your requirements, but how can you find the best properties in any specific area?
For that purpose Idealista, the biggest online platform for the real estate market in Spain, is the perfect ally.
As the vast majority of properties for sale are listed out in Idealista, you can be sure not to miss any good deal if using this website.
With a really user-friendly interface, you just need to type your preferred city or region, and then apply the different filters according to your preference (for example, price).
Understand the main reason you are buying
On the other hand, your final decision must also be influenced by the real reason or purpose you are buying the property.
In that sense, you have two different options: you can buy to rent afterwards, or you can buy for your own holidays/accommodation/residency.
What differences does this imply?
If you are buying to rent the property afterwards, you may be looking at real estate opportunities that are closer to the beach and nearer big cities, as that will help you charge higher rent, and otherwise, you would find it pretty complicated to find tenants.
In that sense, places that are well connected when it comes to public transportation and that have main services (like big supermarkets, shopping malls, etc.) nearby are another must for a later successful rental.
But if you buy the property for your own use, then the quality of the construction will play a much more important role.
That is why in those cases it is usually really recommended to go for primary housing (as in Spain the quality difference between primary and secondary real estate is huge).
Visit the area first, purchase after
Nowadays, many real estate companies and sellers offer really immersive experiences on their websites, including high-quality pictures and videos.
Those digital assets make you feel as you are actually in front of the house you want to buy, creating a sense that you really understand the conditions of the property and you are ready to buy even from a distance.
But that is not the case.
There are many other aspects that must be considered apart from how many rooms the house has or how big the kitchen is, and the area and surroundings in which the property is built are some of them.
That is why you should always travel first to the location where the property is located just to walk, visit the area, understand the neighborhood, and all those extra details that will really count in the long run.
Just after then you will have a real idea of what is the real value of the property and if it is the right choice for you.
And, as we will now see, you can do the whole thing easily as long as you use the following legal path.
Get your golden visa
That is the case as, just because you purchased a property in the country (and as long as this property is valued at over €500.000) you will obtain a residence permit that also allows you to work and bring your relatives with you.
And the truth is that it offers many advantages.
First of all, you can obtain it by entering the country as a tourist. That is, you can obtain your tourist visa, travel to Spain to check several properties you had in your “wishlist”, purchase your preferred option, and then obtain your golden visa residency. Without leaving the country at any time.
Once you obtain it, you will be able to keep and renew your Spanish residency every year as long as you keep the real estate investment. And you will be able to do so as long as you simply visit the country once per year (without a minimum time spent required as happens with other permits).
And, perhaps the most important part for many investors, that half-million real estate value required does not need to come from just one property.
You could, for example, buy a total of 3 properties, live in one, and rent the remaining ones, and as long as the total sum of the 3 is over €500k, you will be granted residency.
Rely on a real estate agent and save money
You may be considering avoiding the extra costs that an intermediary implies, just to save some extra money on your purchase.
But, due to 2 main reasons, that is may not be a recommended option.
First of all, relying on a property expert can help you avoid losing money. Not only will she be someone who knows the area and all the hidden aspects a foreigner can’t see, but also she will help you find the best deals and guide you step by step throughout the whole process.
But, on the other hand, you must bear in mind that in Spain it is usually the seller who pays for the real estate commission, so as a buyer you may not be charged for service while enjoying its benefits.
Then, of course, try to find reliable real estate agents; a company with enough references and credentials that can provide their full attention to your case.
At Balcells Group we can help you with the complete real estate investment and make sure you enjoy a comfortable and successful purchase. Keep reading for more information or ask us anything:
Be careful with outstanding debts
At our office we have found many cases in which the foreigner found a really good deal, agreed with the seller on a good price, just to find out afterwards that the property had some outstanding debt that must be paid, adding extra charges to the final price that then made it not such a good deal.
In the Spanish territory, the buyer inherits all debts associated with the property that were not paid when buying.
We are talking about property taxes, mortgage payments, and other related costs.
So make sure to check those before moving forward with your investment decision, and compute the total price incorporating those and all the costs we will see in the next section.
Consider all taxes and expenses associated with the purchase
A profitable purchase or one that is worth when considering the value for money that you get must compute and understand all the extra costs and taxes associated with the transaction.
In that sense, taxes and expenses will differ whether you purchase primary real estate (from a developer) vs if you buy a second-hand house (re-sale). You can find all the details in this article about property taxes when buying.
If you buy from a developer you will pay 10% on the price of VAT (21% if it is a commercial property); and then the stamp duty, which ranges from 0.5% to 2% depending on the region.
And, then, if you purchase a second-hand house, you will pay the property transfer tax, which again is different according to the Autonomous Community in which the property is located, but as a general rule is an 8% for properties until 400.000€, 9% if the prices ranges between 400.000 and 700.000€, and 10% if above 700.000€
Finally, you will also face notary fees, land registration fees, the cost of the change of utilities, any type of legal fee if you hire a lawyer, and the possible interest if you use a mortgage.
If you need to fully understand all the costs associated with your purchase and your particular case, do not hesitate to ask our lawyers.
Book a consultation with one of our lawyers and solve all your doubts:
