Investing abroad - Barcelona Spain

12 Replies

Hi everyone,

I am new in property investment based in London but would like to buy my first property in Barcelona. 

Is there anyone who bought in that city how could give me any tips in how to invest?

Thank you in advance for your help

Francisco

Hi both @Alexander Svanevik & @Francisco Galera ,

I am currently looking at relocating and buying in Barcelona.... So far, from what I've seen and read, it doesn't seem like the right place to invest. Prices are super high due to tourism and the lack of accommodation + you can't Airbnb (or short let) you place + you have to pay up to 25% taxes on the rents you perceive from your tenants if you're not Spanish resident.

I would love to know what you both think - if there is any neighbourhoods that remains interesting, etc...

Thanks for your feedback!

Pauline

@Pauline Hanuise It certainly depends on what kind of investment you're considering. And indeed Barcelona city is one of the most expensive areas for RE in Spain. Both property prices and rental prices have risen substantially in the last few years. Check out the Idealista index for stats on this.

There are a few peculiarities for Barcelona (or Spain) compared to other markets:

On Airbnb: You're right, there are only a fixed number of 9600 tourist licenses available in the city. This means that if you want to Airbnb your place, you'd have to buy a place that has an associated license. Typically these places will be far more expensive than those without. I haven't compiled hard numbers on this, but from looking at listings on fotocasa.es and idealista.com a flat worth €200k might be listed for up to €300k if it has a tourist license. These places are often in a better shape though, so it's not that easy to compare.

On Spanish residency and taxes: You have to pay tax on rental income regardless of your residence status. That is, Spanish people have to do this as well. But there are deductions available. More here: http://www.advoco.es/advice/8-personal-tax/75-taxa...

On the topic of taxes, if you intend to relocate to Spain and work here as an employee of a Spanish company, it's worth reading up on the Beckham Law. In short, you can get a flat income tax rate of 24% and pay no taxes on capital income from abroad.

In general, I'd say there are multiple co-existing markets in Barcelona. For example, the market for tourists buying a place is very different from locals living here - both on price and the quality of properties. One area that illustrates this is Poble Sec. This is a neighbourhood conveniently located close to the centre, near the sea, and right in front of the lovely Montjuïc mountain. It's traditionally a fairly poor working class neighbourhood with many immigrants, but in the recent years, more tourists have acquired property here - due to the location mentioned above and an increase in house-flipping happening here.

There are many opportunities for making good RE investments in Barcelona, but if you're looking for a cheap "buy and hold" investment, there might be better cities to place your money.

Thank you guys!

I am planning to stay abroad for a while until I will hopefully come back to Barcelona. So my intention was to "buy and hold" while I am abroad. I am looking for something like 60 to 80 square meter around areas such as Eixample or Gracia which might not be the most upcoming area as they are already well established but it should not be to difficult to rent it in the other hand.

As being totally newbie I am looking at everything that it is important before jumping. 

     Like how to find properties? 

I have seen website like www.idealista.com but I have heard also that some banks are reselling properties too. Is there a website only for landlords?

How to find the real value of a property?

I have fund this company which gives I think this type of information but not for free. http://www.urbandataanalytics.com/

Do you know them? It is like a data property market. 

Legal aspects I should know being a non residence in Barcelona?

Alexander are you living in Barcelona?

Thank you again

    

Thanks for all the details @Alexander Svanevik :) That's interesting - especially the Beckham law, I didn't know about!

I am not looking for a cheap buy and hold investment but rather at a good rental property with a good cash flow. Do you know of any good neighbourhood to invest at the moment?

I heard that San Antoni got a lot of attention at the moment... On my side I had a look at Poblenou, just because I felt in love with that area, for the good reasons you mentioned above ;-)

How to find properties:

The two biggest websites for RE in Spain are Idealista and Fotocasa. There are a few smaller ones as well including Habitaclia and Yaencontre. There's also an aggregator which puts "everything" in one place: Trovit.

On banks reselling properties, I believe SAREB is what you're looking for.

How to find the real value of a property:

This is the holy grail of real-estate investing, I suppose :) I know of 4 tools here (in no particular order):

  1. Realo
  2. BBVA (requires login)
  3. Valoracion.es
  4. TerceroB

I can't guarantee for the accuracy of any of these tools, but they might be a good starting point. 

One challenge is that very often Idealista, Fotocasa, etc., don't list the address, so that makes it difficult to use the tools above if you can't visit the property being based abroad.

Also, when looking at listing prices you should know that it's common to close a deal slightly below the listing price. The exact % depends on the area, state of the area, misjudgment of the seller in setting the listing price, etc...

Yes, I'm a resident in Barcelona. I unfortunately can't tell you much about legal aspects of being a non-resident in Spain. On the positive side, maybe I can help "on the ground" here if you need someone to check out a place. I'm new at BiggerPockets, but I'm interested in mutually beneficial collaborations with others. Feel free to reach out to me privately.

@Pauline Hanuise My pleasure :)

I personally really like Sant Antoni - it's right across the street from the area I mentioned earlier (Poble Sec). As an investment though, Sant Antoni is generally priced higher than Poble Sec. But it also generates a higher rental income as Sant Antoni is considered a "classier" area to live in than Poble Sec. 

Have a look at this report by Idealista on the latest rental prices. Sant Antoni is a part of Eixample (€18-19/m2) while Poble Sec is a part of Sants-Montjuic (€15/m2). The equivalent report on property prices shows that buying will cost you, on average, around €5000/m2 and €3300/m2 respectively. In other words the buy-to-rent ratio is quite a lot lower in Poble Sec. So if you're buying to get rental income, Poble Sec might be a better area.

Hi Alex,

Sorry for my late reply but I was traveling to Belgium that day.

I am here like you to meet people in the industry especially based in Barcelona.

My expertise/job is  trading/negociation rather than RE. Having say that part of my family are leaving in Barcelona so if you need some network like handyman, trusty cleaner, catalan transalation it should be easy for me to get you that. Again I am totally new, still educating myself and trying not to be paralysed by the amount of information. But if I can help from my end in a way or another it will be my pleasure. As you said so well: looking to build a mutual beneficial colaboration.

Alex - stupid question- is there any way to avoid to pay 24% of tax on rental income? What if it is your first investment in RE? That is a big chunk of the potencial profit gone...

If you come to London at some point let me know please. Drinks and foods it is on me!

Cheers

No worries @Francisco Galera !

On rental income tax, as noted here, tax deductions are quite generous. Specifically:

"- there are deducible expenses allowed (e.g. utilities, advertising and legal costs, rates, and even interest and amortisation of the property)

- there is a 60% deduction if the property is rented out as a dwelling (as opposed to a business)"

I travel to London occasionally for work so I might follow up on your offer :) Let me know if you're ever in Barcelona.