Real estate prices in Spain are currently rising. In the last 2 years the prices have risen by 6 and 9 percent respectively. (Source, Kyero) A quick win, you might think for those who currently sell their property, but we have to make a side note to this calculation.
Anyone who buys Spanish property - and sells it on the short term for a higher price - seems to make a profit at first glance. However, costs and taxes that were paid at the time when the property was purchased have also to take into account. In addition to that, there are often also costs involved when selling a property in Spain. Both expenses will influence the final net return on your investment.
Costs when buying Spanish real estate
Overall you can assume that the purchase of a property in Spain comes with 13 to 15% expenses on top of the property price. What these costs and taxes consists of we have detailed on our website. You can access the information here.
A simple calculation thus teaches that the purchase of a Spanish property and the resale in the short term is not necessarily profitable. Purchase costs and the costs of selling must be taken into account.
Returns on the longer term
The situation gets more interesting when an investment in Spanish real estate is done with a long term view. In that case, buying and selling costs can be spread over a number of years. An attractive return is then more likely to expect.
Returns on the short term
Investors wo want to get a return on their Spanish property on the short term, could think about renting out their property. Next month we will discuss the management and rental possibilities that Ibérica-Estates can offer you.
If you would like to have more information about return on Investment on your future investment in Spain please feel free to contact us straight away.