When you’re thinking about moving to Barcelona permanently in the near future, buying a house in the city is a solid investment. However, if you’re thinking about buying a second home or a vacation property, investing in Barcelona can be a smart move to make a profit.
Here are 5 tips on how an investor can make money investing in Barcelona’s property from our experienced consultants.
1. If you have to choose between flats or houses, choose flats.
In a city like Barcelona, flats perform better for ‘buy to let’ investments. In general, flats also tend to contribute good returns for investors.
If you have extra budget to afford two-bedroom flat, take it. It would be better if the property comes with two bathrooms as well. When you have more flexibility, you can also freely repurpose your property.
In Barcelona, for instance, a city that hosts worldly digital nomads, a flat with more than one bedroom can be rented out for co-housing, catering to the needs of international start-up community and young entrepreneurs.
2. If you have purchased a house and later on found it to be too big for you, break it down into flats.
Some people may have purchased a big house or vacation villa for their families–and enjoyed it for some time. However, when the children have moved out and the investor is nearing retirement age, most of the times he would find the property too big and tiresome to live in.
Before deciding to sell it as it is, consider breaking it down into 2-3 flats or blocks. The investor can choose to stay in one of the smaller new flats, and sell or rent out the others.
3. Be smart and efficient with your taxes.
Experienced investors know that to make profits from a property, they should also be smart about how they manage their taxes: not to pay more than what they have to. To keep your tax down, you should take advantages of rules and regulations to get maximum capital growth. Furnishings, for instance, is a tax-deductible items. Find a property consultant who can provide sound advice about various legal ways to minimize your tax payment.
4. Never turn your head from the suburbs.
There around 1.6 million people in Barcelona’s city center, while another 4 million live in the suburbs.
Castelldefels and Gava, for instance, has convenient and frequent trains to Barcelona, and you can reach the city in only 20 minutes. The area is busy on weekends, with people flocking its stretch of seafood restaurants along the sandy beaches.
Sant Cugat del Valles is also connected to Barcelona via a 20-minute train ride. Located near the mountain and natural reserve, the area is also popular for expat families as it hosts cinemas, concert hall, shops, and sport clubs.
5. Get a trusted local partner with access and knowledge about the Municipality’s plan
The Municipalities of Spain are the basic level of Spanish local government. Each municipality forms part of a province, which in turn forms part or the whole of an autonomous community. There are a total of 8,118 municipalities in Spain. Each runs like a corporation with an independent legal personality.
When buying a property in Spain, investors need to know in which Municipality the property falls under, and what is the Municipality’s view on the area’s development plan. What is the Municipality’s plan for land use? Are they supporting land development opportunities, or constraining it?
Knowing the Municipality’s view and outlook is very important to ensure that you are making an investment that will serve your best interests, especially when you’re aiming for a long-term profit.
Do you have a property in Barcelona (or in other areas of Spain) that makes less money than what you expect? Feel free to talk to our consultants about it, let us understand reasons for this, and offer the steps we can take to start making more profits out of it!