De obra nueva, de segunda mano o para reformar, para vender o para alquilar… El mercado inmobiliario actual ofrece muchas opciones para invertir en vivienda. Descubre aquí cómo aprovecharlas y escoger la opción más rentable.

Investing in real estate means investing in a safe-haven asset. Compared to the volatility of other investment products, real estate remains one of the most profitable options for both small and large investors. This becomes even more appealing in times of economic uncertainty, when financial markets do not always guarantee the stability of investments.

Are you considering investing in real estate and would like to know if now is a good time? Are you interested in buying to resell, or would you prefer to rent? What do experts predict about the real estate market this year? What factors should you consider before deciding to buy a home? Below, we’ll share seven key points you should keep in mind if you want to get the most out of your investment.

1. Research the real estate market

To start, before investing in real estate, take the time to familiarize yourself with the current state of the Spanish real estate market and the trends that will shape its future. Most savers consider real estate to be a safe bet as a long-term investment, but if your goal is to achieve a high return or if you have a specific timeframe in mind for selling or renting out your new home, you should also be aware of the short-term outlook for the real estate market.

During the fourth quarter of 2021, the Housing Price Index for the open market published by the National Institute of Statistics showed a 6.4% increase nationwide. The year-over-year change stood at 3.7%. The average price per square meter stood at 1,658 euros, representing a year-over-year increase of 2.1% nationwide. For the current fiscal year, real estate analysts forecast growth of between 4% and 5%, which presents a very attractive opportunity to purchase a home as an investment.

2. Should I buy to rent or to sell?

Along with the price of the open market housing, thenumber of mortgages registered in the property registries is another good indicator of the realestate market’s vitality that can help us decide whether it’s a good idea to invest in a home to rent out or to sell.

According to the latest data from the Bank of Spain, for January 2022, the total number of residential mortgages registered in the property registries stands at 36,185. This figure represents a 10% monthly increase, which rises to 29.4% when considering the year-over-year change.

Gross rental yield is another key indicator for understanding the market. This ratio compares the cost of the investment to the profits earned. The latest data published by the Bank of Spain, covering the year 2021, puts the gross rental yield at 3.7% nationwide, in line with previous years.

3. Calculate your budget

Understanding current trends and the outlook for the real estate market will be a great help in deciding whether it makes more sense for you to buy a home as an investment or to rent it out, but whatever you choose, your options will be limited by your budget. To estimate this accurately, you first need to know how much you have in savings and what portion of those savings you want to invest.

Next, consider the type of mortgage you qualify for: What percentage of the new home’s price will you finance? Over how many years? Do you prefer a fixed or variable rate? As a general rule, financial institutions recommend that your mortgage payments shouldn’t exceed 35% of your net income.

4. Types of Housing

The Spanish real estate market offers a wide range of properties, from apartments, studios, and condos to townhouses, semi-detached homes, and single-family homes.

Currently, the most in-demand homes are two- and three-bedroom apartments—ideal for families—as well as penthouses, apartments with terraces, and ground-floor units with private gardens. Although the price of these properties is higher, their high demand makes them a very profitable investment, whether you’re looking to sell or buy a home to rent out. Having a private garage, an elevator, or common areas also adds value to the property, but it usually comes with higher homeowners’ association fees.

Furthermore, although new construction is the preferred option when it comes to investing in real estate, it’s always a good idea to explore what’s available on the resale market or properties in need of renovation before making a final decision.

5. Location, Facilities, and Services

Beyond the current situation and trends in the real estate market, there are also other key factors to consider when buying a home, as they influence its value when it comes time to sell or rent it, as well as its future appreciation. The neighborhood where the home is located, for example, can make a big difference in sale or rental prices, so it’s always advisable to thoroughly research the area and the amenities it offers (educational and healthcare facilities, shops, transportation, green spaces, and sports facilities…).

6. Additional expenses associated with buying a home

If you’re considering investing in real estate, keep in mind that this purchase involves some additional expenses that must be added to the sale price, such as administrative fees, notary fees, appraisal fees, and insurance premiums.

In addition, new-construction homes are subject to a 10% VAT, while for resale homes, the Property Transfer Tax ranges from 6% to 11% of the sale price, depending on the Autonomous Community. When estimating the return on our investment, we must also take into account taxes such as the property tax (IBI) and homeowners’ association fees.

7. Seek professional advice

Investing in real estate is a complex process, so if you want to avoid taking risks, it’s always a good idea to seek advice from a real estate expert. If you’re interested in new-construction homes in a specific area, find out about current developments and don’t hesitate to visit the properties that catch your eye. Currently, many companies are also embracing the “built-to-rent” model, expanding the supply of new construction aimed at the rental market.

On the other hand, choosing a developer that operates nationwide can be a very attractive option if you want to save time, are looking for the highest return on investment, and need advice to help you make a decision. The developer Culmia, for example, currently has more than a hundred developments throughout Spain, including major Spanish cities and the Mediterranean coast—areas that are much more attractive for real estate investment. Its offerings include two- to five-bedroom apartments, luxury penthouses, homes with ocean views, and exclusive villas, greatly expanding your options for finding your ideal home.

In short, despite the current economic climate, real estate remains a safe bet for both companies and individual investors. If you’ve taken our advice on investing in real estate to heart, all that’s left to do now is make up your mind!