At the moment, the real estate market is still one of the most profitable sectors of the Spanish economy, both for large and small investors. Spain as a whole is one of the largest markets for real estate investment, especially residential.
Experts point out that the Spanish market remains popular mainly for three reasons: the presence of stable passive income, high profitability of deposits and confident price movement without sharp fluctuations.
Even with the current instability in global markets, including real estate markets, taking place against the backdrop of both record global inflation and a number of international crises, the Spanish real estate market remains stable and robust. It is these qualities that attract a large number of international investors to the country who are looking for a «quiet bay» for savings in the current conditions.
However, as with any investment, each asset and each market needs its own strategy. In this sense, investment practices that focus on the international attractiveness of the country's large cities are becoming increasingly popular in the Spanish market. The main tool is the acquisition of objects for subsequent rental. A less popular, but still common tool is the «flipping» of real estate.
Below we will analyze several strategic approaches to making money on real estate in Spain, which are in the practice of both private investors and brokers.
Classic investment: apartments for rent
The classic and most common type of real estate investment. It has remained popular for many years. The point is to choose the right moment to buy in order to ride the waves of tourists during the holiday season and the holiday season. This property is rented to visitors, but success largely depends on a correct understanding of which region or major city will receive the most attention in a particular season.
Over the past few years, rental rates have increased significantly, which led to an increase in profitability from deposits and even more popularized among investors such a fairly simple way of earning. At the same time, o is available for both large and small investors. In large Spanish cities, especially those comparable to Madrid, the average annual return on such investments ranges from 3.5% to 5%.
A new investment model in large cities
At the international level, in such large cities as New York, Paris or London, in the last few years they have begun to pay more and more attention to a new direction in investment. Relatively recently, she fully came to Spain. We are talking about the already mentioned «flipping» of real estate. A riskier strategy than the classic rental, but offering significantly higher returns.
"Flipping" means buying real estate in order to resell it on the growth of the market, but first adding a new value to it due to repairs or a small renovation. At the same time, the expectation of resale can last more than a year and at this moment such an object is put up for rent in order to provide funds to cover the costs of maintaining the property.
The popularity of such a strategy is strongly connected with the extremely active price growth in global markets in the last 2 years. The more actively real estate becomes more expensive, the more investments are attracted. Thus, in the first quarter of 2022 alone, the volume of investments in Spain increased by 141%. The indicators of the inflow of investments to the market by the end of this year promise to be record-breaking.