Looking to buy investment property in Barcelona? It’s a sound choice, yet one that must be executed correctly. This article tells you about buying investment property in Barcelona, the types of deals available and the likely returns. Remember, buying property in Barcelona has, on average, yielded in excess of 8% returns per year, and significant capital asset growth.
Buying investment property in Barcelona 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 Barcelona are purchased by non Spanish Nationals and are either used as a holiday homes or straightforward by and hold investments in Barcelona.
Once these properties have been renovated and rented then investors in Barcelona 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 Barcelona or elsewhere.
How easy is it to buy investment property in Barcelona?
Buying an investment property in Barcelona might be more complex, but Spain is a very welcoming country for foreign buyers as foreign ownership of properties in Barcelona 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 Barcelona 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 Barcelona 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 Barcelona?
Average property costs per square meter in Barcelona are €1,722 per square meter, representing a solid, year on year growth trajectory of 8%.
Map of Barcelona
Barcelona ( BAR-sə-LOH-nə, Catalan: [bəɾsəˈlonə], Spanish: [baɾθeˈlona]) is a city on the coast of northeastern Spain. It is the capital and largest city of the autonomous community of Catalonia, as well as the second most populous municipality of Spain. With a population of 1.6 million within city limits, its urban area extends to numerous neighbouring municipalities within the Province of Barcelona and is home to around 4.8 million people, making it the fifth most populous urban area in the European Union after Paris, the Ruhr area, Madrid, and Milan. It is one of the largest metropolises on the Mediterranean Sea, located on the coast between the mouths of the rivers Llobregat and Besòs, and bounded to the west by the Serra de Collserola mountain range, the tallest peak of which is 512 metres (1,680 feet) high.
Founded as a Roman city, in the Middle Ages Barcelona became the capital of the County of Barcelona. After joining with the Kingdom of Aragon to form the confederation of the Crown of Aragon, Barcelona, which continued to be the capital of the Principality of Catalonia, became the most important city in the Crown of Aragon and the main economic and administrative centre of the Crown, only to be overtaken by Valencia, wrested from Arab domination by the Catalans, shortly before the dynastic union between the Crown of Castile and the Crown of Aragon in 1492. Barcelona has a rich cultural heritage and is today an important cultural centre and a major tourist destination. Particularly renowned are the architectural works of Antoni Gaudí and Lluís Domènech i Montaner, which have been designated UNESCO World Heritage Sites. The city is home to two of the most prestigious universities in Spain: the University of Barcelona and Pompeu Fabra University. The headquarters of the Union for the Mediterranean are located in Barcelona. The city is known for hosting the 1992 Summer Olympics as well as world-class conferences and expositions and also many international sport tournaments.
Barcelona is a major cultural, economic, and financial centre in southwestern Europe, as well as the main biotech hub in Spain. As a leading world city, Barcelona’s influence in global socio-economic affairs qualifies it for global city status (Beta +).
Barcelona is a transport hub, with the Port of Barcelona being one of Europe’s principal seaports and busiest European passenger port, an international airport, Barcelona–El Prat Airport, which handles over 50 million passengers per year, an extensive motorway network, and a high-speed rail line with a link to France and the rest of Europe.
Making Money on Investment Property in Barcelona
The best way to make money on Barcelona 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 Barcelona
Fees for buying a property in Barcelona vary from area-to-area. There are no fixed fees for lawyers or estate agents. Buyers must pay the costs:
Property transfer tax in Barcelona: 6–10% (existing properties) / VAT (or IVA) at 10% (new properties in Barcelona)
Notary costs, title deed tax, and land registration fee in Barcelona: 1–2.5%
Legal fees for buying investment property in Barcelona: 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?
Physis Realty estates is a multi-award winning Luxury Real Estate broker in Barcelona, with a 18 year track record the agency has been directly or indirectly responsible for the largest volume of transactions in Barcelona in the past two decades.
Types of investment property in Barcelona
It is important to understand the main types of Investment Property in Barcelona
The Most Successful Property Investment Fund 2020 : Click Image to Download Prospectus
Buy to hold in Barcelona
Long-term rental property in Barcelona 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 Barcelona 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 Barcelona 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 Barcelona 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 Barcelona 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 Barcelona 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 Barcelona property to Holiday Accommodation
For property investors in Barcelona, 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 Barcelona and then converting these homes into serviced apartments to maximize yield.
The types of property used for serviced accommodation in Barcelona 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 Barcelona 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, Property Secured Investments.
Disadvantages of investing in Serviced Accommodation in Barcelona
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 Barcelona
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 Barcelona
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 Barcelona 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.
Alexander Bentley leads Remedy Investments™ a private equity fund specializing in operational real estate. Remedy Investments™ has significant expertise in developing Luxury ApartHotels across Europe and the wider APAC region.
Alexander Bentley is the creator & pioneer behind Remedy Wellbeing Hotels & Retreats. Under his leadership as CEO, Remedy Wellbeing Hotels™ received the accolade of Overall Winner: International Wellness Hotel of the Year 2022 by International Rehabs.
Because of his incredible work, the individual luxury hotel retreats are the world’s first $1 million-plus exclusive wellness centers providing an escape for individuals and families requiring absolute discretion such as Celebrities, Sportspeople, Executives, Royalty, Entrepreneurs and those subject to intense media scrutiny.
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