Are you interested in investing in Madrid property but don’t know where to begin?
Investing in Madrid: 3 steps to get started
- Prepare your finances
- Establish your investment goal
- Know the market
We begin with the first and most important step:
1–Prepare your finances
We know! It is tedious and no one likes dealing with paperwork and legal documents but it is very important. Fortunately, you have come to the right place. Our team at Madrid Estate will support you and help you assemble the proper documentation. This way, you can focus on the most enjoyable part of the process: seeing the properties!
Have you considered getting a Spanish mortgage?
Did you know that in Spain, foreigners can get mortgages for up to 50% of the property value? Additionally, the fees are relatively low compared to other countries. Given that EURIBOR is at all all time low, and Spain has recently changed their mortgages laws to make them more favorable to consumers, makes this a very attractive option..
What is the true cost of investing in Madrid real estate?
There are additional costs to investing in Madrid real estate that you might not be familiar with them. They are:
- The Impuesto Bienes de Inmuebles tax, or IBI: This is 0.8% of the property value
- Legal and notary fees
- Home insurance
- Taxes: These are 6-10% of the property price, depending if you are investing in Madrid or another part of Spain
CLICK HERE to learn more about the additional costs associated with investing in Madrid
2– Establish your investment goal
Clarity equals power. The more you know what you want, the faster and easier it will be to find your ideal property. We recommend asking yourself the following questions:
Do you have a strategy in mind? Do you want to achieve a specific return on your investment?
Do you want to invest in a specific neighborhood? What is this neighborhood?
Do you want to generate a passive investment return, or do you prefer to renovate and flip your apartment?
Do you know the best way to optimize your resources?
We can help you answer all these questions and define your strategy for investing in Madrid property. To learn h0w we can help you, click here to arrange a free consultation.
3– The reality of Madrid real estate prices
The first thing you need to do is familiarize yourself with the prices per square meter in the Madrid market.
Here are some basic price guidelines, as of the end of 2018:
6,000-8,000 €/m2: The sky is the limit! In this price range, you can buy in the most elegant neighborhoods of Salamanca, Almargo and Justicia.
5,000-6,000 €/m2: In this price range, you can buy in neighborhoods such as Chamartín, Chamberí, Huertas, Chueca and other high quality neighborhoods that aren’t necessarily considered luxurious.
4,000-5,000 €/m2: This price range still allows you to purchase property in the center of Madrid, but it will likely need to be renovated.
3,000-4,000 €/m2: With this budget you can find a fixer-upper in Lavapiés. The price of Madrid real estate has increased greatly the past year, so we do not recommend this neighborhood for investing in Madrid real estate if the price/quality ratio isn’t right.
2,000-3,000 €/m2: If this is your budget, you can find a property in the suburbs or in neighborhoods where prices have been slower to increase. For example, Usera or Madrid Rio.