# Invest in Spain property: how much you can gain?



## Mwin (Jul 22, 2017)

Hi all,

This is my first post and I'd like to take this chance to thank you all for contributing useful information here on this forum.

I am now considering to invest in property in Spain to get residency and toward citizenship. The so-called "Golden Visa" requires that I need to invest at least 500 K Euro to get resident permit. I wonder if I buy 400 K Euro property for rent, (100K will be for my accommodation), how many % ROI can I expect to get from rental (after tax, of course), and which region/city is good for that kind of investment?
Is 3.5% ROI reasonable, or too high/low?

Any thought will be welcome! Thank you!


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## Pesky Wesky (May 10, 2009)

Mwin said:


> Hi all,
> 
> This is my first post and I'd like to take this chance to thank you all for contributing useful information here on this forum.
> 
> ...


The property market in Spain is a fickle market and in fact was the key factor to bringing the financial crisis of 2008 - 2016 about. True it was the construction business that took the direct hit, but of course house prices, house rentals, and anybody connected to the business from door makers to floor layers to architects and lawyers were affected and affected very badly. And it is also true that house prices and rents are on the up, but for how long before the next crash, big or small comes to Spain?


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## Mwin (Jul 22, 2017)

Pesky Wesky said:


> The property market in Spain is a fickle market and in fact was the key factor to bringing the financial crisis of 2008 - 2016 about. True it was the construction business that took the direct hit, but of course house prices, house rentals, and anybody connected to the business from door makers to floor layers to architects and lawyers were affected and affected very badly. And it is also true that house prices and rents are on the up, but for how long before the next crash, big or small comes to Spain?


Thanks, Pesky Wesky! I'd love to learn the exact answer of your last question, too .


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## snikpoh (Nov 19, 2007)

Mwin said:


> Hi all,
> 
> This is my first post and I'd like to take this chance to thank you all for contributing useful information here on this forum.
> 
> ...



I would certainly not buy property in Spain as an investment!

I have a number of properties but they were bought before the crash. I also have 3 children who I plan to leave the properties to - I certainly don't plan on selling them for a profit.


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## Mwin (Jul 22, 2017)

snikpoh said:


> I would certainly not buy property in Spain as an investment!
> 
> I have a number of properties but they were bought before the crash. I also have 3 children who I plan to leave the properties to - I certainly don't plan on selling them for a profit.


snikpoh, I can agree with you that buying property in Spain is not a good investment. However, I think I am investing in Spain resident card and passport and wondering what kind of money (apart from other things) I can get back.


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## Williams2 (Sep 15, 2013)

Mwin said:


> snikpoh, I can agree with you that buying property in Spain is not a good investment. However, I think I am investing in Spain resident card and passport and wondering what kind of money (apart from other things) I can get back.


I would have said the UK was the perfect place to invest in Property ( rather than Spain ) as there's always a 
shortage of property ( and seems relatively unaffected by Brexit ) so you should ( depending on where you
pick to buy your property ) and whether it was a dilapidated property ( bought at auction & then done up ) to 
achieve even greater returns.
The rental income is good in the UK and even better if you decide to live there and avoid the new Non-Dom
taxes on UK property owned by overseas landlords.

On top of that if your resident in the UK, you can put your money in ISA'a and SIPPs to earn tax free interest
and tax free returns on investments in Stocks & Shares in whats called Self-Select share ISA's & SIPPS.
Although you will have to start working in the UK and start paying UK taxes to really benefit from SIPPS.

The tax free perks of ISA'a and SIPP's are unheard of in Spain and I cannot see any shade of Spanish government 
ever even thinking of introducing ISA's and SIPP's here in Spain. Which is a shame really !!!


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## xabiaxica (Jun 23, 2009)

Williams2 said:


> I would have said the UK was the perfect place to invest in Property ( rather than Spain ) as there's always a
> shortage of property ( and seems relatively unaffected by Brexit ) so you should ( depending on where you
> pick to buy your property ) and whether it was a dilapidated property ( bought at auction & then done up ) to
> achieve even greater returns.
> ...


but he wants to live in Spain.... buy residency (& eventually nationality) in a way, for 500,000€. 

If he wanted to do that in the UK he'd need 2 million GBP


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## mickbcn (Feb 4, 2013)

Mwin said:


> Hi all,
> 
> This is my first post and I'd like to take this chance to thank you all for contributing useful information here on this forum.
> 
> ...


Wait to invest in Spain until past the next October.


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## Pesky Wesky (May 10, 2009)

Mwin said:


> snikpoh, I can agree with you that buying property in Spain is not a good investment. However, I think I am investing in Spain resident card and passport and *wondering what kind of money (apart from other things) I can get back*.


Or what kind of money you could lose. If you're looking at a quick turn around you might find a profit (don't know how big or small because that will depend on the area and type of property of course), but in the long run, as people are pointing out to you, property in Spain doesn't guarantee making money.
In Madrid ATM rental prices are rising quite fast.


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## Williams2 (Sep 15, 2013)

xabiachica said:


> but he wants to live in Spain.... buy residency (& eventually nationality) in a way, for 500,000€.
> 
> If he wanted to do that in the UK he'd need 2 million GBP


I know, I know but I was only giving my candid opinion to add to other replies to this post that Spain is not a good place to invest,
in property or otherwise - which would lead me onto to my four cents worth that the UK's a better place to go, live and 
invest than Spain.

From the entrepreneurial investors point of view.


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## Mwin (Jul 22, 2017)

mickbcn said:


> Wait to invest in Spain until past the next October.


Hi mickbcn, any reason for the next October, pls? Why not sooner or later?


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## Mwin (Jul 22, 2017)

Pesky Wesky said:


> Or what kind of money you could lose. If you're looking at a quick turn around you might find a profit (don't know how big or small because that will depend on the area and type of property of course), but in the long run, as people are pointing out to you, property in Spain doesn't guarantee making money.
> In Madrid ATM rental prices are rising quite fast.


When I invest in property, I look at capital gain/lose, and cash flow. While predicting what kind of capital lose/gain from investment in property in Spain will depend very much on the Spain market performance and it is difficult, I just wonder if there is any market benchmark for cash flow. 
Of course having a benchmark figure will not guarantee me to have that kind of cash flow, but at least it helps.
Let's say if I buy a property with annual guarantee cash flow of 4% for 4 years, is it reasonable, or that figure is too good to be true?


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## Williams2 (Sep 15, 2013)

Mwin said:


> When I invest in property, I look at capital gain/lose, and cash flow. While predicting what kind of capital lose/gain from investment in property in Spain will depend very much on the Spain market performance and it is difficult, I just wonder if there is any market benchmark for cash flow.
> Of course having a benchmark figure will not guarantee me to have that kind of cash flow, but at least it helps.
> Let's say if I buy a property with annual guarantee cash flow of 4% for 4 years, is it reasonable, or that figure is too good to be true?













Maybe you should try your hand at buying rundown properties in Madrid & Barcelona and doing them up ( so they are
worth far more than what you paid for it ) like they do on the British BBC TV series - Homes under the Hammer.


BBC TV Series - Homes under the Hammer


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## Mwin (Jul 22, 2017)

Williams2 said:


> Maybe you should try your hand at buying rundown properties in Madrid & Barcelona and doing them up ( so they are
> worth far more than what you paid for it ) like they do on the British BBC TV series - Homes under the Hammer.
> 
> 
> BBC TV Series - Homes under the Hammer


Thanks, Williams2, for your suggestion. It's good idea, in deed.


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## snikpoh (Nov 19, 2007)

Mwin said:


> Hi mickbcn, any reason for the next October, pls? Why not sooner or later?


... because that's the date for the next vote on Catalonia (sp?) independence.


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## Mwin (Jul 22, 2017)

snikpoh said:


> ... because that's the date for the next vote on Catalonia (sp?) independence.


Interesting! Anyone has idea how the vote result will impact property market in Spain?


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## Pesky Wesky (May 10, 2009)

Mwin said:


> Interesting! Anyone has idea how the vote result will impact property market in Spain?


Probably negatively. The referendum at this moment is illegal. Whatever the outcome there's bound to be months of unrest - I don't mean shooting in the streets, but political quibbling and that's rarely good for buying and selling especially if you are an outsider and don't know the market you're dealing with.


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## Pesky Wesky (May 10, 2009)

Mwin said:


> When I invest in property, I look at capital gain/lose, and cash flow. While predicting what kind of capital lose/gain from investment in property in Spain will depend very much on the Spain market performance and it is difficult, I just wonder if there is any market benchmark for cash flow.
> Of course having a benchmark figure will not guarantee me to have that kind of cash flow, but at least it helps.
> Let's say if I buy a property with annual guarantee cash flow of 4% for 4 years, is it reasonable, or that figure is too good to be true?


I couldn't tell you. I've already said everything I know about the Spanish property market. I've only ever owned one house in my life and that's where I'm living now.
I do know though that many many people have regretted relying on Spanish property to gain an income or profit.
You have asked for advice and you are getting it, so please at least take it into consideration.
Look at figures for annual rates and predictions for the sales of housing in Spain. Today I mentioned it to my Spanish husband and we were in agreement that although contruction isn't happening on the same scale as pre crisis (Spain was the world's biggest consumer of cement for example) construction is taking place again when there are still millions (literally) of empty properties.
It's a gamble and you'll have to decide if you want to risk it or not.


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## Madliz (Feb 4, 2011)

Anyone looking to invest in property in Spain should bear in mind the costs of buying and selling here. There are regional dofferences within the country, but you can expect to pay 10-14% in various taxes and fees on top of the purchase _and_ sale price. That alone would make me wary of the viability of 'doer-uppers' here.


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## Williams2 (Sep 15, 2013)

Williams2 said:


> Maybe you should try your hand at buying rundown properties in Madrid & Barcelona and doing them up ( so they are
> worth far more than what you paid for it ) like they do on the British BBC TV series - Homes under the Hammer.
> 
> 
> BBC TV Series - Homes under the Hammer


Another idea which would no doubt save you the time & expense of doing up a property bought at auction. Are those properties that come up for auction ( or whatever ) as a result of Bank repossessions where again 'location, location' 
would be important but there's no doubt plenty of properties around; many still from the economic crisis where
the owners defaulted on his or her mortgage and it subsequently comes up for auction as a result of a bank
repossession. To my mind the Costa's ( except perhaps in some yet to be discovered - offbeat places look too expensive ) whereas the work a day places like Madrid, Barcelona or Valencia could be promising.


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## mickbcn (Feb 4, 2013)

Mwin said:


> Hi mickbcn, any reason for the next October, pls? Why not sooner or later?


Because the 1th October we will have the referendum pro independence here in Catalonia and if we win everything will be different in Spain, specially because Spain will loose the 20% of his GDP.,and in a very few years Spain will loose too the "colonies" of Valencia,and Balearic Islands (the catalan countries) and don't forget the Basque country....


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## mickbcn (Feb 4, 2013)

Mwin said:


> Interesting! Anyone has idea how the vote result will impact property market in Spain?


Spain has one debt of more than one billion (european) of euros 1.100.000.000.000 this mean the 110% of his GDP,aproximate, if Catalonia win the elections (ilegal) hehe,then Catalonia will be another state and Spain will loose the 20% of his GDP,Catalonia have one GDP of 223.629 euros (2016) with one debt of 76.000.000.000, aproximate one 35% of our debt,(because Spain steal us aproximate per year 16.000.000.000 )first steal us the wallet and then borrow us the money..


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## mickbcn (Feb 4, 2013)

223.629,000.000 milions of euros!!!


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## Horlics (Sep 27, 2011)

Mwin said:


> When I invest in property, I look at capital gain/lose, and cash flow. While predicting what kind of capital lose/gain from investment in property in Spain will depend very much on the Spain market performance and it is difficult, I just wonder if there is any market benchmark for cash flow.
> Of course having a benchmark figure will not guarantee me to have that kind of cash flow, but at least it helps.
> Let's say if I buy a property with annual guarantee cash flow of 4% for 4 years, is it reasonable, or that figure is too good to be true?


I discuss returns with 4 people I know who own and rent out property in Spain. All of them make more than 4% yield.

They're in an expensive area where demand is high throughout the year. It's all about location and I am sure there are places where you could buy properties only to see little demand for them. 

Although there's greater than 4% yield you shoulder consider that acquisition and disposal costs are high. The first 2 years won't be profit, it'll only just cover the purchase taxes.


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## Horlics (Sep 27, 2011)

mickbcn said:


> Spain has one debt of more than one billion (european) of euros 1.100.000.000.000 this mean the 110% of his GDP,aproximate, if Catalonia win the elections (ilegal) hehe,then Catalonia will be another state and Spain will loose the 20% of his GDP,Catalonia have one GDP of 223.629 euros (2016) with one debt of 76.000.000.000, aproximate one 35% of our debt,(because Spain steal us aproximate per year 16.000.000.000 )first steal us the wallet and then borrow us the money..


Bore off Mick, there's a good chap. Your separatist spam is off topic.


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## Mwin (Jul 22, 2017)

mickbcn said:


> Because the 1th October we will have the referendum pro independence here in Catalonia and if we win everything will be different in Spain, specially because Spain will loose the 20% of his GDP.,and in a very few years Spain will loose too the "colonies" of Valencia,and Balearic Islands (the catalan countries) and don't forget the Basque country....


While may things will be uncertain if Catalonia become independent, there will be one sure thing: the Catalonia football league will be boring. Who is going to challenge Barcelona FC then?


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## mickbcn (Feb 4, 2013)

Horlics said:


> Bore off Mick, there's a good chap. Your separatist spam is off topic.


This is a real information,not spam,and If I where investor I will wait until midle October or later...depends..maybe you can buy in Spain for a half of the price...who knows.


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## Mwin (Jul 22, 2017)

Horlics said:


> I discuss returns with 4 people I know who own and rent out property in Spain. All of them make more than 4% yield.
> 
> They're in an expensive area where demand is high throughout the year. It's all about location and I am sure there are places where you could buy properties only to see little demand for them.
> 
> Although there's greater than 4% yield you shoulder consider that acquisition and disposal costs are high. The first 2 years won't be profit, it'll only just cover the purchase taxes.


2 years to cover purchase taxes is not bad.


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## skip o (Aug 1, 2011)

I poked around on rental properties in Barcelona and it looked pretty unappealing. A real estate agent was bragging about his clients making 3% a year, and I wouldn't be surprised if that was gross profit, not net. Definitely read up on the problems landlords have with squatters and problem tenants. I own rental properties in the US where, after taxes & insurance & maintenance & the occasional unpleasant surprise, I net about 18%, Maybe that is a high bar to compare to, but Spain seems like a landlord's nightmare to me.


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## Williams2 (Sep 15, 2013)

Now here's something that could take off in Spain. Rent out Luxury Beach Huts on the Costa's.


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## Mwin (Jul 22, 2017)

skip o said:


> I poked around on rental properties in Barcelona and it looked pretty unappealing. A real estate agent was bragging about his clients making 3% a year, and I wouldn't be surprised if that was gross profit, not net. Definitely read up on the problems landlords have with squatters and problem tenants. I own rental properties in the US where, after taxes & insurance & maintenance & the occasional unpleasant surprise, I net about 18%, Maybe that is a high bar to compare to, but Spain seems like a landlord's nightmare to me.


Wow, 18% net for property rental! No wonder so many ppl want to live the American dream!


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## Williams2 (Sep 15, 2013)

Williams2 said:


> Now here's something that could take off in Spain. Rent out Luxury Beach Huts on the Costa's.













Another idea is a Sunbed Reservation App for tourists to reserve their ideal sunbed at their favourite holiday
resort location.


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