How to invest successfully in a property in Spain

The investment in properties is experiencing a new golden age and that's why professionals and particular are focusing on the residential sector as a way to obtain long-term benefits, given that the gross profitability of housing rental reached 7, 29% at the end of the last year 2017 in Spain, therefore an investment for leasing in the residential market is confirmed as an attractive option for large and small investors.

Investing in property is a decision that needs caution and ingenuity, so we show you the key factors to take into account for investment in property in Spain:

The market trends for each province

It's essential to know the profitability offered by the provincial market and choose the one with the highest risk-return ratio. The provinces that predict a better performance (low risk, high profitability and a notable evolution with respect to the previous year) are Madrid, Malaga, Valencia and Alicante. The province of Barcelona, with a negative interannual evolution of its rental income (-0.2%), enters a new cycle in the trend of purchase and rental prices. On the other hand, it is necessary to clarify that in the case of Almeria the negative variation is due to the better behaviour of the sale prices with respect to the potential rents obtained in the rental market.

Location and characteristics of the dwelling

It's necessary to choose a good area with perspectives of revaluation. The location of the home is a key factor so the ideal is that it's in an area that has all the basic services.

To achieve the ideal location, the residential real estate market must be analyzed in a micro way as Urban Data Analytics (UDA) does. This allows us to see differences in local areas and segmented by type of housing.

Another important factor is the conditions of the house, the characteristics and the services that it offers, the most advisable thing would be that a professional will carries out a technical inspection to determines the state of the mechanical systems, the general disposition and the aesthetic-environmental conditions. Professional Housing Inspection certificates (IPV certificates) provide the assurance that the property is in perfect condition, at least, the possibility of raising a possible discount if there is any defective element.

Consult an expert

Each investor profile suits a certain type of purchase. Investing in an area with high demand allows you to ensure greater liquidity in the case of having to sell the apartment. A rigorous monitoring of the real estate market through Big Data methods indicates that the provinces with the lowest real estate risk are Madrid, Valencia and Malaga.

Valuing the investment and consulting the experts in the sector is important to avoid unnecessary risks. PropTech companies like UDA have the capacity to offer data adapted to the profile and the requirements of each investor, comparing markets and going down to the maximum segmentation.

Get a good price and a good mortgage

We don't want to pay too much for the property and multiply the time of return on the investment or get into an endless number of reforms for a supposed real estate bargain, for that reason, it's advisable to check all prices and study all the possibilities of purchase. To assess whether the price put by the seller is adequate, in addition to seeing the house, it is useful to know what the average price of the area and other floors with similar characteristics is.

On the other hand at the time of obtaining a mortgage loan, it is advisable to consult as many banks as possible and negotiate to obtain the best credit offered by the market. The buyer is facing one of the best moments in recent history to obtain a mortgage loan on advantageous terms with AFD credits due to low-interest rates.

Credit: elmundo.es, expansión.com