Have you fallen in love with an apartment but you’re not sure if it is a good investment? Many times we find a space with ideal architecture, layout and design but it isn’t aligned with our business plan. To keep this from happening to you, here are five tips for successfully buying a property in Madrid.
1–Evaluate the area and see how much renovating the property would increase its value
Consider buying a property that needs renovating. Did you know that each 1€ spent on renovating a property in Madrid increases its value by 1.5€?
2–Buy with an objective in mind
When buying a home to rent, we must be practical and think about what will bear fruit from the beginning. It’s important to like what you buy, but it doesn’t need to be the apartment of your dreams because you will not be living there. Rather, the neighborhood and floorplan must be optimized for business. You should also consider whether your want to rent it short, medium or long term as this will be a key variable when you choose your neighborhood and layout.
3–Always add an additional 10% to the property’s value to budget for closing costs
You have to take into account the additional costs associated with buying property in Madrid: taxes, notary fees, legal fees, accountancy fees and registering the property with the Land Registry.
Focus on the things about a property that you can’t change. Not every property can get an Airbnb license- there are certain minimum standards that must be met to get a touristic license. Ceiling height, luminosity and the number of windows are all key factors on the rental market.
4–Don’t lose a good opportunity because you negotiate too much
If you find a property in Madrid that checks off most of the boxes on your list, don’t look much further. Sometimes we are so concerned about getting a good deal that we let the perfect property slip through our fingers. If you find the perfect property in Madrid, our tip is to buy it and don’t fixate on negotiating the perfect deal. Good properties with ideal characteristics “fly off the shelves.” The maximum you can negotiate on properties like this is 3%.
5–Get your documentation in order before you begin your property search
We always advise to start your property search by getting your paperwork in order. You need to find a Spanish bank that will pre-qualify you for a mortgage so you know exactly how much money you have to work with. Spanish banks can be slow, so you need to work with a bank that can close the deal. We work with a number of banks that we can put at your disposal.