How to make money on the resale of real estate in Spain

Resale is the process of buying property and then reselling it at a higher price for a profit. Buyers and investors who buy and resell houses do business in real estate sales for less money than it is. Sometimes housing may need renovation and therefore it is sold at a discount. However, the most common way for investors to resell houses is to purchase housing without a purchase option - 30-60% cheaper than the actual market value.

Content:

• The most promising market
• The pandemic and investments in real estate in Spain
• New buildings under construction for resale in Spain
• New projects in Spain under construction
• Is it safe to currently buy off-plan real estate in Spain?
• Fast resale of real estate in Spain
• We will help you make money on the resale of real estate in Spain

The most promising market

According to a study by the international consulting company Knight Frank, in 2022, Spain will become one of the leading destinations for real estate investments in Europe, the Middle East and Africa - behind only countries like the UK, Germany, France and Netherlands.

As the report states, Spain will receive about 7,500,000 euros in real estate investments.

The pandemic and investments in real estate in Spain

Knight Frank spokesman, Humphrey White says: “Spain is a beautiful country for real estate investment. After the pandemic, the Spanish real estate sector is actively recovering especially in logistics, data centers, offices and living quarters. We are confident that 2022 will strengthen the growth we are seeing now.”

According to a survey conducted by Knight Frank, Spain is one of 5 countries selected for secondary housing. The Spaniards note that they prefer to invest in a second residence ahead of Portugal and Italy.

More than half of respondents (56%) say the pandemic has not changed their plans to invest in second homes abroad. 60% said the health crisis changed their mind.

On the other hand, about 20% of Spaniards surveyed changed their place of residence during the pandemic, preferring more spacious housing.

Which direction is best for investment in Spain?

According to the consulting company, Madrid is one of the most popular residential investment destinations among Spaniards and foreigners. Not surprisingly, the Spanish capital is the country’s economic engine.

Madrid’s districts and neighborhoods with growth potential are Arganzuela and new residential projects in Gran Vía, Claudio Coello, Alcantara, Velazquez, Serrano and Almagro. These provide ample opportunities to acquire housing at affordable prices.

New buildings under construction for resale in Spain

Spain’s real estate sector has been transformed during the pandemic.

As noted by Vicens Ramon, manager of RTV Group Real Estate: “During the pandemic, new construction did not suffer much, except for the first 3 months of uncertainty when everything was paralyzed. Then the pace of construction and sales resumed.” Real estate expert, Eduardo Molet, notes that “this year, the percentage of new housing purchases was higher than secondary. The number of visas, according to some sources, has grown by 20%.”

The demand among buyers changed; they began to choose new houses with large terraces and beautiful views. Jesús Duque, Vice President of Alfa Real Estate, said: “It is terrific that isolation and telecommuting have made us change in terms of the perception of our home and have prompted many people to relocate.”

Sales of larger houses with common areas and located on the periphery of large cities increased.

Property prices in Spain are rising

When secondary house prices and rents dropped since the pandemic, new housing prices are rising. Eduardo Mole says that the prices of apartments in new buildings in Spain are increasing and will remain the same in the coming months.

At the height of the pandemic, prices for new houses peaked in the past 10 years and increased by between 4% and 20%, depending on the characteristics of the property, according to Vicens Ramon. The price gap between new buildings and resale has widened and will likely grow further between 2022 and 2023.

New housing at the best prices

Buying property in new buildings in Spain will be cheaper in Castile, Leon and Castile-La Mancha. Prices become more affordable depending on the proximity to Autonomous Communities.

New projects in Spain under construction

Today, new buildings in Spain are houses with sustainability, high energy efficiency, quality finishes, avant-garde designs, large terraces and common areas, and all kinds of services from outdoor and indoor pools, paddle tennis courts, beauty salons, to gyms.

Most of the real estate offers are concentrated in Madrid and Barcelona with attractive promotions. In Madrid, you can find the exclusive Park & Palace Gilmar residential project with a rooftop sky bar. In Valdebebas, the Isla Pedrosa de Gestillar project is presented, which is one of the most significant urban developments in Europe thanks to a design based on sustainability and high energy efficiency. The construction company Via Célere is building the Célere Finestrellas II project in Barcelona and completing the Residencial Bell Sarrià residential complex.

Valencia is one of the most attractive cities for new house purchases: the Sky Homes complex by Neinor Homes, consisting of 4 20-story buildings, is located here. In Alicante, the Santa Clara Residencial project by ASG Homes with 68 avant-garde design chalets stands out. Costa del Sol is a modern residential complex overlooking the Mediterranean Idilia Views, designed by developer Aedas Homes. In Malaga, the Residencial Nereidas project from Metrovacesa can be noted and in Torremolinos, the Residencial Habitat Alborán project from Habitat Real Estate. Marbella has 3 exclusive luxury villas close to Puerto Banus Marein.

Is it safe to currently buy off-plan real estate in Spain?

Observing specific recommendations, you can profitably resell a property that has not yet been built with a significant profit and avoid risks. Moreover, Spain has adopted the law, “On Construction Management”, to protect a future owner in case of unforeseen circumstances when buying a house.

When buying off-plan real estate, an investor has several advantages:

• Cheaper operations. Buying an apartment usually costs 15% less than buying a finished home.
• The privilege of choice. The ability to choose options in accordance with the needs and desires of the buyer.
• Modern technology.

Recommendations for a safe off-plan transaction

Information

An online advertisement or information brochure may be enough to get our attention but it is not enough to invest money without going into details.

Before choosing a property and the quality of building materials, it is necessary to study the developer. Find out if the company owns the land where the building is planned for or if it has the appropriate licenses. It is also advisable to look for reviews from others about the company.

Documentation

New technologies allow us to visualize what the house will look like when completed. It is necessary to collect as many documents as possible that detail the characteristics of a house in Spain to avoid unpleasant surprises.

The plans and detailed technical data sheets are primary documents. It is also essential to find out if you can choose the layout of the space, what will be located in the common areas, whether there will be a parking space, an elevator, etc.

Pay special attention to what is written in small print

It is necessary to read everything that is written in small print. This is universal advice for any transaction involving signing a contract. Typically, the document should contain the following detailed information:

• The exact price of housing with a breakdown of VAT.
• Key handover date.
• Fines in case of delay in delivery of housing.
• Long payment form before signing the mortgage.

If you have any questions, you need to consult an expert.

Check all points before signing the contract.

After house construction is completed, all that remains is to confirm the legality of the procedure and implement all the points agreed upon earlier. Having done this, you can be calm and confident that you will become the owner of a new home.

Fast resale of real estate in Spain

Real estate offers without the right of repurchase offset some of the best discounts on quality properties available on the market today, making them ideal for buyers looking to resell the property in Spain for a profit. Such properties are sold by lenders and government agencies seeking to collect outstanding loans or tax debts so they are often sold at a significantly lower market value. Usually, real estate exhibited by banks and other organizations is bought by investors at auction in order to resell an apartment in Spain almost immediately after purchase at real market value.

Cost accounting

Buying and selling a house can come with many hidden costs that lower your bottom line (e.g. appraisal costs, property tax payments). Another typical expense is repair work. You can get an additional discount on a house that needs renovation but at the same time, you need to be sure that after renovation, the property will make a profit.

Making good investments

It is also important to note that the resale of an apartment in Spain does not mean buying the cheapest housing but housing with good investment opportunities. Is the property located in a convenient area? What kind of infrastructure is there? You need to be sure that the house you are buying will be wanted.

Selection of real estate for subsequent resale in Spain

The best way to start investing and selling houses is to look at foreclosure listings on online services.

Housing maintenance

It must be remembered that the buyer pays all the costs of maintaining the property until they can resell it (these are monthly mortgage payments, property taxes, etc.).

Financing

Securing financing for houses for resale is a crucial point.

Financing depends on the loan duration. Loans issued for 30 years have stable interest rates but are intended for those who buy real estate for ordinary residences. The interest rates and costs of closing such a mortgage will be high, although the payment requirements can often be low. Investors usually prefer non-long-term loans with lower closing costs and higher down payments.

Is there a risk of losing money when reselling in Spain?

As in any process associated with real estate purchase, the following risks are associated with resale: buying real estate with low investment opportunities, poorly developed infrastructure, and high repair costs.

We will help you make money on the resale of real estate in Spain

Do you want to invest in real estate in Spain? Spain-Real.Estate has a collection of current offers for the resale of residential real estate in Spain. Become a successful investor with Spain-Real. Estate!