[Mwin]

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!

 

[Pesky Wesky]

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!

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?

 

[Mwin]

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 .

 

[snikpoh]

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!

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.

 

[Mwin]

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.

 

[Williams2]

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 !!!

 

[xabiaxica]

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 !!!

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

 

[mickbcn]

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!

Wait to invest in Spain until past the next October.

 

[Pesky Wesky]

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.

 

[Williams2]

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.

 

[Mwin]

Wait to invest in Spain until past the next October.

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

 

[Mwin]

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?

 

[Williams2]

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

 

[Mwin]

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.

 

[snikpoh]

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.

 

[Mwin]

... 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?

 

[Pesky Wesky]

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.

 

[Pesky Wesky]

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.

 

[Madliz]

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.

 

[Williams2]

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.