Invest in an apartment for rent? Think about this.

Low interest rates, uncertain investment markets, and so on. The result is that more and more people buy a property and then rent it out, also in Spain. Are you also thinking about buying real estate in Spain? Here are some guidelines.

Is an investment property in Spain something for me?

Many are lured by the cheaper real estate prices in Spain than in their home country. But it is best to take into account the Spanish rules that may differ slightly from those in your home country.

• Rule 1: Do not believe everything you are told, the fact that a seller speaks your language does not automatically guarantee honest and sound information.
• Rule 2: Let yourself be guided by an experienced and neutral person so that you can clearly determine in advance what the final cost will be.
• Rule 3: Once decided, get assistance from an experienced legal firm to avoid pitfalls and problems. In many places a rental license is required to rent out as a holiday home, but what is often not said by sellers is that there are already several Spanish regions where these licenses are no longer granted, or to a limited extent, due to oversupply.

Also know that investing in real estate is a long-term investment but that this investment will also have annual costs. It is an active investment, so you will have to put in time, money and work time and again to keep your investment top.

Is it recommended to take out a loan?

If you have enough cash, think about the tax authorities. For example, if you suddenly spend 200,000 euros on a purchase, there is a possibility that the tax authorities in your home country will ask how you got that money. Before deciding to finance a part, also check which interests and costs you will have to pay and then compare whether it is possible to achieve a decent return by renting out.

The best locations, where should I buy?

What tenants often look at are the following criteria: – How far is the nearest airport? – How far is the beach, what is the view from the balcony? – Location of shops, etc. (is a car necessary or not) – Garage present – number of bedrooms

A property that meets many of these conditions (for example, not too far from an airport, located first line coast with sea view) will logically also fall in a higher price range, but also guarantee a higher occupancy rate and higher rent.

When does one speak of a good price?

As mentioned above, location is an important factor. Therefore, compare the requested price with other properties in the area and immediately look at the rents that other owners are asking. This will give you an idea of what everything will cost and what your final return will be.

An example: You buy an apartment for 200,000 euros, including notary and registration costs. You can count on a rental income of 9,600 euros per year. That means a gross return of 4.8 percent. Gross, because you also have to deduct your annual costs. Suppose you pay 3000 euros annually in fixed costs (community costs, insurance, taxes) then your net return will fall to 3.3%. If you also took out a loan to finance the purchase, you must also deduct these annual costs.

New build or second hand?

Your budget is important. A new-build home will often be more expensive than a second-hand home. On the other hand, with a new construction you will normally be reassured of maintenance costs for several years, which is not always the case with a second-hand one. But as mentioned above, the location remains important.

Who rents out my property?

You can choose to look for tenants yourself and leave the daily care to a “keyholder”. You do not pay any commissions to a rental office, but you have to take care of everything yourself. Another option is to rent out through a rental office. They take your research and administrative work off your hands, but of course charge a commission for this. Be sure to take this into account when calculating the return.