Investment Property in Andorra

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Buying Investment Property in Andorra?

Looking to buy investment property in Andorra? It’s a sound choice, yet one that must be executed correctly. This article tells you about buying investment property in Andorra, the types of deals available and the likely returns. Remember, buying property in Andorra has, on average, yielded in excess of 8% returns per year, and significant capital asset growth.

Buying investment property in Andorra with cash outright is also a sure fire hedge against any rise in interest rates. Some investors look to buy properties in need of renovation or a change of purpose. They then renovate those properties and rent them out on a long term or short terms basis. Many investment properties in Andorra are purchased by non Spanish Nationals and are either used as a holiday homes or straightforward by and hold investments in Andorra.

Once these properties have been renovated and rented then investors in Andorra may refinance the property by taking a mortgage over the property at a higher value, using the income to pay the mortgage and reinvesting the profit from the deal into more property in Andorra or elsewhere.

How easy is it to buy investment property in Andorra?

Buying an investment property in Andorra might be more complex, but Spain is a very welcoming country for foreign buyers as foreign ownership of properties in Andorra has really helped lift and stabilize the local economy.

The procedures for buying a property in Spain as an expat are relatively straightforward. Before buying, you’ll require a financial number, which can be obtained by visiting a police station with your passport. This is typically processed on the same day for Spanish or EU citizens, but may take a little longer for other nationalities.

Financing an investment property in Andorra can be done by cash or mortgage charge. It is often easier for expats to finance the purchase from their home country. Pre 2008 many Spanish banks in Andorra would lend to international investors although they have been reluctant to do again, so even now.

What is the average price of investment property in Andorra?

Average property costs per square meter in Andorra are €1,722 per square meter, representing a solid, year on year growth trajectory of 8%.

Map of Andorra

Andorra, officially the Principality of Andorra, is a sovereign landlocked microstate on the Iberian Peninsula, in the eastern Pyrenees, bordered by France to the north and Spain to the south. Believed to have been created by Charlemagne, Andorra was ruled by the count of Urgell until 988, when it was transferred to the Roman Catholic Diocese of Urgell. The present principality was formed by a charter in 1278. It is headed by two co-princes: the Bishop of Urgell in Catalonia, Spain and the President of France. Its capital and largest city is Andorra la Vella.

Andorra is the sixth-smallest state in Europe, with an area of 468 square kilometres (181 sq mi) and a population of approximately 79,034. The Andorran people are a Romance ethnic group of originally Catalan descent. Andorra is the world’s 16th-smallest country by land and 11th-smallest by population. Its capital, Andorra la Vella, is the highest capital city in Europe, at an elevation of 1,023 metres (3,356 feet) above sea level. The official language is Catalan, but Spanish, Portuguese, and French are also commonly spoken.

Tourism in Andorra sees an estimated 10.2 million visitors annually. Andorra is not a member state of the European Union, but the euro is its official currency. It has been a member of the United Nations since 1993. In 2013, Andorra had the highest life expectancy in the world at 81 years, according to the Global Burden of Disease Study; in 2019, it had the 23rd-highest at 81.9 years, according to the United Nations Development Programme.

Making Money on Investment Property in Andorra

The best way to make money on Andorra Property is via an expert international investment fund.

Your Financial Advisor or Accountant won’t bring you the opportunities because of course they won’t receive their greasy commissions.

Investment funds are not even allowed to advertise so you’ll never hear of them unless a friend recommends them.

You will need at least some experience with previous investments to be eligible and of course these funds are extremely picky about the investors they accept. They can afford to be. They don’t need your money, but they can put your money to work for you like never before.

Costs of buying a property in Andorra

Fees for buying a property in Andorra vary from area-to-area, and many are negotiable – for example, there are no fixed fees for lawyers or estate agents. Buyers must pay the majority of the costs, which are generally as follows:

  • Property transfer tax in Andorra: 6–10% (existing properties) / VAT (or IVA) at 10% (new properties in Andorra)
  • Notary costs, title deed tax, and land registration fee in Andorra: 1–2.5%
  • Legal fees for buying investment property in Andorra: 1–2% (including VAT)

The seller usually pays the estate agent fees in Spain. Estate agents usually charge their fees as a percentage, typically around 3% of the final sale price.

Who is the Best Real Estate Agent in Spain?

PRestates is a multi-award winning Luxury Real Estate broker in Andorra, with a 18 year track record the agency has been directly or indirectly responsible for the largest volume of transactions in Andorra in the past two decades.

Types of investment property in Andorra

It is important to understand the main types of Investment Property in Andorra

  • Undeveloped land in Andorra
  • Commercial property in Andorra
  • Residential real estate property in Andorra
  • Operating property investment in Andorra
  • Distressed property investment in Andorra
  • Investing in a World Class fund with activities in Spain, and in Andorra

Types of property investment deals in Andorra

The main types of property deals in Andorra are:

  • Buy to let in Andorra
  • Buy to hold
  • Serviced Accommodation in Andorra
  • Vacation Rentals in Andorra
  • Commercial Property in Andorra

The Most Successful Property Investment Fund 2020 : Click Image to Download Prospectus

Buy to hold in Andorra

Long-term rental property in Andorra is widely considered one of the best ways to diversify your property portfolio. So buying and owning property means much more than just investing in a single property, it can bring you a variety of benefits, such as access to a variety of investment opportunities and the benefits of long-term ownership.

While some investors in Andorra may be confused or intimidated when they start, buying and owning property can be one of the best investments you can make if you do your due diligence before you start.

The rental income from investment property in Andorra generates short-term income that can be used to pay off a mortgage or to invest money. The strategy of buying and holding property is one of the most common investment options.

The value of the Andorra property will increase over time and the investor will benefit if he is willing to sell it later. The investor benefits from being bought in the expectation that the value of the property will rise over time.

Investors considering a Andorra property purchase and holding strategy should do their best to calculate the potential income from renting out the property. The bottom line is that monthly income should exceed the cost of rent in the first year of ownership and annual rental income over the next five years.

If the investor plans to sell the Andorra property later, possible profits should also be taken into account. Finally, any losses from taking out a mortgage or other type of property financing must be taken into account, as well as any gains from the sale.

Convert Andorra property to Holiday Accommodation

For property investors in Andorra, converting a home into a serviced apartment would mean higher rents than the normal rent increase. As a result, many people are buying investment property in Andorra and then converting these homes into serviced apartments to maximize yield.

The types of property used for serviced accommodation in Andorra are often the same as those you would use to buy to let. Where you have a guaranteed short-term rent, it’s not as rigid as renting out a property.

Lease Andorra property to the Worlds Best Rehab

Remedy Wellbeing is a bespoke, luxury treatment center with a significant corporate footprint in Spain. This means they treat just one client at a time in luxury 6* accommodations. All properties used by Remedy Wellbeing are as unique as they are inspiring. If you own or represent some of the most exceptional, unique and luxurious accommodations in Spain, Remedy Wellbeing can be contacted via their dedicated property management company, Physis Realty.

Disadvantages of investing in Serviced Accommodation in Andorra

  • Holiday accommodation is more of a business strategy than a property strategy, and the workload is far more intensive.
  • You’ll need to furnish your holiday rental accommodation in Andorra
  • You’ll need to clean the rooms and change the sheets every time your guests leave.
  • Who does all the laundry?
  • Who does all the cleaning?
  • Who’s going to do all the work for you in Andorra
  • How are the guests actually going to get in?
  • Are you going to have somebody to do a meet and greet?

Buying investment property in Andorra to convert into serviced accommodation or holiday lets is not really considered an investment, because the amount of work involved make it a full time job.

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