Historically, properties have been preferred to secure family assets. This trend continues, since investing in housing in Spain continues to be profitable.
In fact, investing in housing is preferred over investing in stocks or investment funds.
One of the reasons is its sure revaluation, although many do it to invest in housing to rent. However, it is important to know how to select the zone and the region in which it is located.
Best places to buy a home in Spain
Whether you want to invest in housing to rent or to live in it, your situation is essential. This is so because depending on it, the home can be revalued or depreciated.
The best places to invest in housing in Spain are those that have certain advantages. Some of them are places near beaches and where there are exclusive or luxury houses. It is also worth investing in spaces where you have good services for foreign tourists.
Spain is one of the countries where investing in housing is still profitable. Specifically in cities and regions such as Cádiz, Málaga, Marbella, Estepona, among many others.
Is it advisable to invest in housing to rent or to live in?
Here are some reasons:
Become an estate
We are always concerned about having our own heritage. You must remember that what you pay for rent you throw in a deaf ear. While investing in housing to rent or occupy implies using the money destined for rent to pay for something that will be yours.
This case is very valid for young couples looking for their first home.
To protect your assets from inflation
It is always a good time to invest in housing, but now it is almost an obligation. Since the post-pandemic period has been characterized by rising inflation.
Although this creates the doubt as to whether it is preferable to invest in housing or commercial premises. In this sense, if you rented you can update the value according to the IPC index.
In addition, by investing in rental housing you will not be affected by price increases.
Possibility of tax benefits
They will be applicable if you buy a home with the money obtained from selling another. This exempts you from paying taxes on this money. As long as you reinvest within a term of less than 2 years.
This is one of the situations that makes Spain one of the best countries to invest in housing.
Low interest on mortgages
Mortgages are currently at an all-time low. Therefore, it is a good time to invest in housing.
On the other hand, banks generally finance 80% of the value in the case of a first home. In the case of a second home, the financing is around 60%. But by investing in a rental home it would be easy for you to pay the mortgage payment.
Lower volatility in real estate cycles
It has been observed that after the real estate crisis that emerged in 2008, the cycles of the sector have acquired great stability. That is why most foreigners look for a good place to invest in housing in Spain.
Most profitable places to invest in housing in Spain
Whether you want to invest in housing or commercial premises, profitability depends on its location.
Below, we show you some return rates by region. With this information you will have a clearer idea of investing in housing to rent or to make it your home.
Communities with the highest profitability
It is important that you know that the average return in Spain was 6.8% in 2020. We are going to show you the communities that at least equal this average for investment in housing in the country. They are presented from lowest to highest profitability.
- Autonomous Community of Catalonia, presents a return of 6.8%.
- Valencian Community, has an average return of 6.9%.
- Murcia Region, 7%.
- Comunidad Foral de Navarra, has a return of 7.1%.
The other communities have an average profitability lower than that of the whole of Spain. It is also interesting to note that the average in this sector in 2019 was 6.6%, that is, 2 tenths lower than in 2020.
Communities with lower profitability
Just as there are communities with a very positive return, there are others with an index below the average. This does not mean that you should not invest in housing to rent or as a second home, but that you should study the market well in the area to ensure your investment.
Now, the communities with the lowest profitability are presented below. They are ordered from smallest to largest.
- Balearic Islands, with an average return of 4.8%.
- Basque Country, with a return of 5.4%.
- Madrid, with 5.5%.
- Extremadura, has a rate of return of 5.5%.
Before you make a decision based on the above, you should know that these vary annually. So when you go to invest in housing to rent or as a second home you should review them.
Taking them as a reference for profitability only in the year of purchase. For example, the Balearic Islands was the second most profitable region in the country in 2016. However, this trend was reversed because rents fell due to a reduction in labor supply.
Likewise, in Barcelona and Madrid, lower profitability is expected year after year. This is because the housing supply increased, making it easier to invest in rental housing. But keeping in mind that rents will be low over time.
In summary, it is still profitable to invest in housing in Spain, especially if you want to invest in housing to rent.
This despite the fact that it is a difficult asset to sell, the payment of taxes and the cost of maintenance. However, it is still one of the safest investments you can make.
What you should do is study the market as you would in any other investment. In this way, you can guarantee that your resources will be financially secure.
Invest in the construction of a house
Other options to obtain profitability is to invest in the rehabilitation of houses, that is, to buy a house to reform or rehabilitate it and then sell it.
It is also interesting to invest in land to build a custom-made home. Whether with the aim of selling it or living in it, building your own personalized house on a piece of land is always a good decision with which you will obtain profitability.
If you want to know how to sell or how to buy a piece of land, we will give you all the clues and steps so that you do not miss anything:
Investment needed to build houses
If you bet on investing in land and building a house, you should bear in mind that the purchase of land is one of the most important aspects. The location of the land will increase the value of the house built.
Other aspects should be considered, such as choosing a home construction company, that is, a builder specializing in real estate construction.
If you choose well, everything will be easier since this construction company will take care of all the administrative part, building permits from the town hall, first occupation license, taxes, etc.
If you carry out a turnkey house construction order, everything will be easier, they will take care of the entire project and the construction management to achieve the construction of the house of your dreams.
Is it profitable to build houses to sell them?
Whether to live in it, rent it or sell it, investing in land to build on will always be a good profitable investment in the long term.
If you want to know how much it costs to build a house in Malaga, in Ibiza, or build a luxury villa in Cádiz, or any other location, do not hesitate to contact us, we will be happy to make a budget tailored to your needs. the construction of the desired single-family home.
