Real estate in Spain looks attractive, but the costs are considerable
As Deutsche Welle notes, demand for Spanish real estate among foreigners has grown significantly again in recent months. Spanish realtors report this, citing numerous calls and written inquiries from potential clients. Internet portals serving the foreign real estate sales sector also indicate interest in Spain.
However, so far it is only about interest – Spain's borders remain closed due to the COVID-19 pandemic, and foreigners cannot make actual deals. But sooner or later the borders will open. What awaits buyers? How profitable is it to purchase housing in Spain – for a seaside vacation, immigration, or business?
Study the market before buying a home
Interest in Spain is quite natural, believes Spanish lawyer Federico Delgado, who specializes in real estate sales. According to him, in recent decades, "millions of foreigners, mainly EU citizens, have acquired housing" on Spain's seaside resorts. Many of them, especially retirees, have settled there permanently. They are "attracted by the climate, low food prices, a developed healthcare system, and the friendly attitude of the local population towards foreigners."
In Spain, as the lawyer notes, there is a wide selection of housing for sale: both new and used. Prices range from 50,000 euros to tens of millions. The price depends not only on the size of the apartment or house, but also on the location, the quality of construction, and, of course, on the "degree of honesty of the seller."
Therefore, the first advice to a buyer is to "thoroughly study the market." To do this, "you should get acquainted with different regions of Spain and, accordingly, with real estate prices."
Real estate is not a cheap pleasure
People of average means should know that maintaining housing in Spain (even a small apartment) is not cheap. This was pointed out by another interviewee – Juan Ignacio Sanz, a member of the Spanish College of Property Managers. According to him, for an apartment of 50 square meters with two small bedrooms and a living room in a mid-range resort, you have to pay up to 400 euros per year. This amount includes cleaning of common areas, their lighting, and minor repairs. But if the building has a pool, flower beds, a children's playground and sports facilities, and a security guard and gardener work, the payments can be up to 200 euros per month.
For major repairs, the manager further noted, an additional amount is charged. In addition, the tax for the mentioned apartment is about 200 euros per year. Annual insurance is another 200 euros. Moreover, even if you live in the apartment only in summer, you have to pay for utilities all 12 months: at least 15-20 euros per month for electricity, 40-50 euros per quarter for water. And heating in winter or cooling in summer can cost you 500 euros per month.
Can you make money on real estate in Spain?
The multiple-entry annual visa issued to homeowners does not grant the right to work and allows you to stay in the country without leaving for only 90 days, and in total no more than 180 days per year. Only those who have invested 500,000 euros or more in their property can obtain a permanent residence document. Therefore, many foreigners who do not plan to stay in Spain for long have a desire to rent out their housing.
According to Sanz, this is possible and is usually done through intermediary agencies, provided the person has an appropriate license. The latter, by the way, is "quite difficult to obtain" in some regions of Spain: local authorities thus try to control the influx of tourists.
Apartments on the coast are usually rented out only in July-August, and vacationing tenants change every 10-15 days, the member of the College of Managers further noted. Of course, intermediaries take their percentage from the income. Part of the money goes to pay for cleaning when tenants change, as well as water, electricity, and gas cylinders if the apartment has a gas stove and water heater.
In addition, it should be taken into account that many tenants "relax" on vacation – they behave inappropriately. So, returning to their apartment, the owner often finds broken furniture, a faulty TV, air conditioner, or refrigerator. Thus, "the question of whether it is profitable to rent out housing is quite debatable," Sanz noted.
"Pitfalls" of buying a home
When buying a home in Spain, both interviewed experts recommend contacting only legally operating real estate agencies. Many of them serve clients in several languages.
What you should not do is use the services of unfamiliar compatriots who persistently offer their help to visitors at Spanish airports and hotels. Lawyer Delgado claims that there are "many fraudulent schemes" using which "you can be sold illiquid housing, and even at an inflated price."
And manager Sanz, for his part, warned about the peculiarities of Spanish laws. The fact is that in recent years, the scourge of homeowners in the country has become the illegal occupation of housing by homeless people, most often illegal migrants. So, if you come on vacation and find that unknown persons are living in your apartment, do not be surprised and do not try to evict them yourself. The law prohibits this. You can only contact the police.
If you are lucky, the uninvited guests will be evicted by court order in a few months. But if they have minor children, the eviction process can be significantly delayed.