I'm new to the BP community and love the podcasts and content so far...
I'm currently researching the UK markets as well as Spain and Portugal looking for whichever options make the most sense for rental income. If anyone is in these markets and wants to share ideas or tips then let's connect!
Strategies I want to employ:
buy and hold
note investing (maybe at a later stage)
P.s - I have a marketing agency and a long background in sales and marketing so I'm happy to help if anyone has any questions around this topic - feel free to message me.
Hello @Deep Johal ,
What yields are you expecting in Spain or Portugal?
Im aiming for 8-10% CoC return. I see you are from barcelona... what are you seeing as average returns in your region?
In Barcelona city is becoming impossible to get that yields. Maybe 4,5% is more accurate.
In other cities may be possible. I still have my network in Barcelona, but 100% of my operations are in Valencia.
Valencia still cheap and you could get 7-8% without putting to much effort. But you should buy with cash.
Mortgages in spain are low interest, but they give you only 70% LTV.
Ah i was just in valencia today! I like the look of the market and spoke to people about deals. Maybe we could collaborate if you are in this market also?
Yes yields are around the 4.5-5.5% mark in Barcelona, but the capital gains potential is high ... Especially useful if you're looking to buy and hold. If you're looking to flip and are more concerned about net rental yield for better cash-flow, Valencia is a good option.
I'm from Portugal, and I'd recommend investing in emerging suburban areas of Lisbon and Porto.
Hi all. This is my first time posting on a forum, it's so great to see people talking about Spain. We're in Galicia in northern Spain. The highest COC return here is around 4%. are the 7-8% return in Valencia that you refer to on long term rentals or only in tourist areas?
Hi @Christina Creighton ,
That yields are for long term rentals. We are selling now one of our flips (https://www.idealista.com/inmueble/81685415/), and even with our 20% margin you could make 6%.
Just buying a distressed property for 80-90.000 euros and doing a cheap rehab (10.000 euros), total cost of 110-120.000 euros, you get 7%.
Hi Deep / Adrià,
Thanks for above posts.
I am a newbie just starting out on REI path and glad to find other people interested in Valencia.
I was in Valencia and Alicante cities recently and felt more inclined toward Valencia (bigger city; more diverse opportunities instead of mainly tourism in Alicante's case).
It'll be great to know your thoughts about good neighbourhoods in Valencia for long term rental investment.
Check the neighbourhoods around the city centre: La Saidia, Patraix, Les Corts,...
Buy as cheap as possible, if it's for long term is better to buy a property without elevator, but with some space to be installed --> 30-40k maximum.
With that you could reach 7% yields consistenly on time. Of course the yields during the years of this upper trend will be 9-10%, but expect a drop.
I would say that a property without elevator of 30-40k you could expect a rent of 350-400 euros per month, but in few years will drop to 250-300 euros er month.
Just my 2 cents.
If you're looking for 90-100sqm with elevator on the neighbourhoods mentioned, I think that kind of flat could maintain a rent of 500 euro on the long term. Right now this kind of flat is rented for 750 euro.
Then you could expect a consistent 5-6% on 30 years period.
Thanks. It's helpful getting the numbers in perspective. Much appreciated.
Your analysis about falling rents is quite intriguing. So in other words, if the tide turns soon, one expect to just break even for some time or worse . But having said that. I'd be happy with 5-6% as a new investor.
@Usman Masud not intriguing at all. Spain is a country with a declining and ageing population with excess of housing. The average net salary is 1480 Euro per month.
Do you think that paying 30-50% of your salary on rent is a stable situation?
The reason why we are on maximum yields is because the young generations need to save up to 40k to buy a property of 120.000 Euro.
Real Estate is cyclic, there will be times where the yield of a house will be 4% others that will be 10%. But on time periods of 30 years, is not realistic that the yield that the property will deliver is the one of the higher peak.
You are right, rents are also bound to disposable income. Place I used to live had long term rent being around 30% average disposable household income. 50% is obviously not tenable.
We have just bought a flat opposite Lisbon, the yield is 10-12%. So it’s totally doable
@Sisi where in Lisbon did you buy? I was looking pretty diligently for a while but only found 8-9% gross yield max, so nowhere near 10-12% net - ( calculate yield as net to get the CoC value)
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