Property Investment In Spain Guide for 2020
Property investment in Spain can be fruitful and rewarding. The abundance of art and culture, sumptuous cuisine and fine wines, enchanting historic cities and pristine breaches make Spain a highly popular holiday destination.
Not only does investing in property provide you and your family with a private holiday home, it will be there for when you decide to retire also. Alternatively, there is the potential to sell your Spanish property for a profit.
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In the meantime, consider renting the property as a holiday home. Spanish villas in popular resorts like Marbella and Costa del Sol provide you with the potential to earn a second income.
Moreover, if you recruit a real estate agent in Spain to handle bookings and property management on your behalf, you can earn a profitable income for practically zero effort.
In this article, we will discuss why now is the best time to invest in Spanish property, what you need to do and the pitfalls to look out for. According to economists, Spain looks like the most lucrative European country to buy property right now.
Expected Returns From Property Investment in Spain
Spain was one of the hardest-hit countries during the global coronavirus pandemic. Its housing market was hit quite dramatically with property values plummeting by six per cent.
Falling house prices mean there is an opportunity for foreign investors to purchase a second home in Spain. The Central Bank of Spain estimate house prices will start rising gradually, although the estimate of a full economic recovery is forecast for 2023.
The upshot of the economic downturn is that property investors have some time to identify lucrative properties that will deliver a significant return on investment.
Having said that, Spanish estate agents say they are already starting to a slight pick-up in the housing market. The initial crash during the lockdown had been as high as 18.5%.
Economic forecasts for property investment in Spain look promising. The property rating agency, Fitch Ratings, forecast the Spanish housing market to fall by at least 8 per cent this year. It could even be as high as 12%.
Compare this to a predicted four per cent slump in Germany and between 3-7% in the UK, and it is clear to see that property investment in Spain offers the most lucrative package.
There are estimates that along the Costa del Sol and in the south could present an excellent opportunity for property investors.
After the 2008 housing crisis, bargains emerged in prime areas such as Marbella and Alicante. Experts expect to see similar patterns – although, with banks in better health, the recovery will be quicker this time around.
Finding the Right Property
Buying property in Spain is undoubtedly exciting but it can also be overwhelming. What you should be aware of before diving in headfirst is that the Spanish property market has many quirks.
Although there are no restrictions for foreigners to buy property in Spain, there are several legal hoops of hope to jump through. You also have to complete a financial assessment and obtain an “NIE number” together with registration at the local police station.
In all honesty, the process for investing in Spanish property is far smoother if you work with an established real estate agent. They will also have contacts with reliable legal advisors to handle the legal requirements on your behalf. Avoiding the paperwork alone is worth the fee to hire professionals.
Moreover, credible estate agents will handle the management and maintenance of your property whilst ever you are not living there. This is essential if you plan to rent your property out to tourists as a holiday home.
Professional property agents will also help you find a prime property that represents a good return on investment. Browsing online property portals may give you an idea of property prices, but they are typically overinflated and may not be the most ideal location for a holiday home.
According to insider experts, Marbella is emerging as one of the most attractive areas to buy property in Spain. There are report there has been in a significant number of enquiries for Costa del Sol properties. Prices in this region from €100,000 for standard apartments in Málaga to luxury villas in Marbella up to around €3 million.
The Spanish property market is undoubtedly experiencing another period of evolution and change. Existing properties are going for obtainable prices whilst new builds can be found for bargain prices.
Are you interested in investing in properties in Spain? Get in touch today and we can help you find the right property for you in Marbella and the Costa del Sol.