Now that real estate prices on average have adjusted and fallen across most of the Spanish market, it makes it a very positive time to explore these alternative opportunities.
According to a Spanish investment property specialist the main investment approach that has seen larger investors profit substantially on an ongoing basis is buying properties for rent within the larger commercial and university cities in Spain where domestic demand is not abating.
In fact, the city based buy to let property market in Spain has suffered nothing of the negativities of over supply, with many urban areas actually suffering from a restriction of supply leading to increased demand.
In the capital Madrid for example we are hearing reports that 62 percent of apartments which become available are being rented within the first month alone.
The low supply of good quality rental property is also affecting rental prices. For example, average monthly rents in Lorca have gone up from 400 Euros a month to 550 Euros over the period of the last three months, and as the date for the opening of the new University of Lorca approaches, so demand is expected to further intensify.
Therefore, property investors looking for a market where there is strong demand for property, more attractive underlying real estate prices and strong potential for consistent year round rental income should be focusing their search on Spain’s most in demand cities. Each day we are turning down clients looking for rental apartments. When one becomes available it is rented within the week, sometimes the same day.
Spain’s local population has suffered in much the same way as the British population from rising property prices in recent years. This has led to a situation where more Spanish than ever are seeking rental accommodation because they cannot get onto the housing ladder. The Spanish Prime Minister has pledged significant financial help, not just to first time buyers, but more interestingly for buy to let investors too.
Direct monthly financial contributions of 200 Euros a month are being offered by the Spanish government to people under 30 years old to help with rental payments; proposals have also been made to help tenants raise deposits; and for landlords who agree to rent properties to under 35s to help them get into private accommodation, attractive taxation incentives have been proposed.
Property investors quite possibly have a once in a lifetime opportunity to buy property off plan at below market prices as developers work hard to sell off stock, or to buy resale units in what is very much a buyer’s market, and earn rental income year round from the domestic market who are being aided and therefore encouraged to rent.
Karl Hopkins manages various websites including http://www.fly-2let.co.uk, a free and unbiased resource that provides information for overseas property investors as well as anybody else that is interested in buying homes overseas.
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