The following blog is inspired by an article that appeared in Bloomberg this week. As the Spanish economy starts to reopen, flights are due to land here again from early June and there is a buzz in the Spanish air; investing in Spain? ordinary people, not just investors are looking for that.
What has changed in real estate investing in Spain?
There’s ample opportunity in real estate investing in Spain, according to the publication. Investing in Spanish real estate means something vastly different than in the past.
When we started doing conveyancing for our buyers back in 2005, they were predominantly Irish, Scandinavian and of course, British people who wanted a holiday home in the sun. These ex-pats are still buying, but not just for lifestyle investing.
Some people just are looking at Spain while thinking about diversifying their property portfolio, others see value in the Spanish property market. And others still are looking for alternative Spanish property investments.
Planning to retire in Spain?
One such technique is for people who are thinking of retiring in Spain in say: ten years, buying now in a “Buyers market”, renting the property and in ten years, owning it for free.
Spanish Solutions of course help all our investors with tax planning and all the related aspects of buying their property in Spain- Legally!
Soon the vaccine distribution in Spain and across Europe will find its stride, yet uncertainty continues to swirl around financial markets.
Do you really want to put your fortune into a recently launched blockchain currency?
Maybe buying a property in the sun makes sense; Get a return on your money and four weeks holiday every summer too! Our estate agent clients are telling us demand is great right now.
According to CrowdStreet, the investment company, 96% of investors polled plan to add commercial real estate to their portfolios this year. That is way ahead of stocks and bonds when less than 60% of experienced investors plan to put their money.
With Spanish hotels and retail still in a slump, investing in real estate, particularly in tourism areas that rely on people coming here to spend their money seems questionable. Yet Spanish estate agents are predicting an increase in year on year activity of 60% in 2021.
For investors considering adding Spanish real estate to their portfolio in 2021, here are some tips and ideas:
Think short term
Buyers can lose thousands, tens of thousands in many cases by ignoring the immediate, short term issues. Find a lawyer, but don’t just pick the cheapest one. Ask them what estate agent they recommend, then negotiate with the agent/builder and sellers. Always avoid private deals – statistically, 20% of those involved in private deals are happy they didn’t use an agent- The odds are not in your favour. Paying too much is never good and when an estate agent tells you that an additional 10,000 spread over ten years is very little, she is to be avoided.
Think medium term
We mentioned above the trend of people to “buy now, retire later”. Why not buy your home in Spain and let the property do the work? Why not get your rental return, while getting a great deal and getting a feel for the country. Spanish Solutions can help you with tourism licences, tax and fiscal matters as well as pointing you in the direction of some wonderful deals. The house you buy now doesn’t have to be your forever Spanish home. By all means upgrade when you retire, with your foot firmly on the property ladder.
Think Long term
“The day you buy is the day you sell” is an old saying. Buyers who are trying to be too smart may well get burned. Sure, Bulgaria or Brazil are trendy places to invest, but year after year, the tourists come back to Alicante, The Costa Del Sol, Valencia and other hot regions in Spain. Why would this change? Well, it won’t. Buying here means that you will have a simple asset to flip whenever that day comes. Thinking long term also means you protect your heirs. We can help.
What about investing in a REIT or SOCIMI as they are called in Spain? There are various ways to invest your money in a portfolio with hundreds of other buyers rather than just one deal. This year we started advising investors on how to get involved in multi-family units, crowdfunded deals, equity release deals and even private lending. All these opportunities, if managed correctly can produce impressive dividends.
Spain is open for business, you just need to think first, talk to us second and make it a positive experience for all involved.