Real estate investments in Spain, as a rule, are considered attractive and quite safe, due to the tangibility of their income, as well as the historically positive dynamics of prices. Despite the fact that the 2008 crisis demonstrated that there are no risk-free assets, among the alternatives, the real estate market remains one of the safest areas of investment.
This is especially true during periods of sharp inflation, which the global economy is experiencing at the moment. And although real estate investments have traditionally been considered earnings for wealthy people and large companies, given the amount of liquidity needed for this, today there are more and more options for ordinary citizens.
We are talking about investments within the framework of the Spanish SOCIMI system. The latter is a Spanish network of trusts for real estate investments. They were originally designed to attract money to the construction sector from both ordinary Spanish citizens and foreign investors. SOCIMI's mechanisms are transparent, deposits are protected, and dividends are paid regularly. A similar system appeared a little later in neighboring Portugal — we are talking about SIGI.
SOCIMI is trying to democratize the real estate market and stimulate the digitalization of the sector. Due to the new influx of money into the market, various PropTech startups have begun to appear in recent years - companies that focus on integrating modern technologies into the rather conservative real estate sector. Spain has become the second country in the world, after the United States, in terms of investments in Protech (Property Technology).
An example is the company PropHero, which focuses on the analysis and exploitation of big data to increase the return on investment in residential real estate for rent. The models of this company, among other factors, take into account the demographic dynamics of the Spanish market, the movement of rental rates across the country and regions, unemployment rates and the state of the labor market in order to accurately assess the risks of non-payments. PropHero also analyzes liquidity flows in the market.
According to PropHero, regions away from major cities, especially such as Madrid and Barcelona, are best suited for investment in rental housing. Remote areas and the deep province offer the highest returns, taking into account the low risks of non-payments, low liquidity and depreciation of housing in the markets. The service provided by the company is to search for objects in such favorable regions for its customers. The minimum amount of investment in this case will require about 80,000 euros, including all expenses. And the profitability is promised against the background of 8% per year.