Today’s guest post comes from I Sold My House, who are sharing their 5 top property investing tips to help you if you’re looking to buy in Spain or her islands.
Sometimes, buyers may feel as if they have a disadvantage in the property and real estate investing business. And this perceived disadvantage tends to hold them back from buying and selling properties in Spain.
Our 5 top tips should help you feel more confident when buying. And when the time comes to sell your house, you’ll know how to get the right price to maximise your profits on your investment too.
Tip #1 Get your property investing sums right
You’ll never turn a profit on your investment if you don’t get your sums right. So before you become a property investor in Spain, you need to create a budget and stick to it at all costs (no pun intended).
For example, you’re planning to purchase a Tenerife property for €250,000. And after renovating it, you want to sell it a few years down the line for €350,000. So you have have €100,000 to play with as your potential profit margin.
But… if you have to spend €100,000 or more to fix up the property then you’ll not only fail to make a profit, you’ll end up losing money on taxes, upkeep, and other expenses too. So that’s why you need to set a budget, to ensure you keep your renovation expenses as low as possible so as to turn a healthy profit.
Tip #2 Find the perfect investment property that meets your needs
Some investment properties might be better than others, depending on your personal situation and other factors. For example, if you own a number of income generating apartments in Los Realejos already, and want to buy more, it would probably make sense to continue buying in this area.
Of course you could purchase other properties in other parts of Spain, but they may become difficult to maintain. Ideally, you want to avoid spreading yourself too thinly so you can properly manage your new investment.
Or, you may decide that a property isn’t right for different reasons. Maybe it’s too expensive. Or maybe it isn’t expensive enough (!) Obviously, you know your personal situation, so you can decide on the ideal property to meet your investment needs.
Tip #3 Maintain the property to add value to your investment
In order to get the top price when you come to sell your property, you have to make sure you maintain it. It needs to look gorgeous in all your photographs – both inside and out. Because if you don’t, you risk only getting a fraction of what you want.
For example, you might own a stunning five bedroom villa in Cabo De Palos with panoramic views of the marine reserve. Don’t let the outside run wild, employ someone to keep on top of the ground maintenance to make sure you wow your potential buyers. Otherwise your €2 million property might only sell for €1 million and you’ve added no value at all.
Tip #4 High interest rates can kill potential profits
If you need to take out a mortgage to pay for some or all of your investment properties, shop around first. You want to avoid paying too much interest to your lender and keep back as much profit as possible.
Making sure your credit profile is good is also key, so try and settle other investments first before applying for a low-as-possible interest loan.
Tip #5 Pay as little as you can for investment properties
This is just common sense, but do remember, the more you pay for an investment property, the less you’ll make overall when you sell it. Try not to let your heart overrule your head and keep your profit margins at the front of your mind.
As you can see, it’s quite possible to buy high quality investment properties in Spain and turn a healthy profit in the process. We hope the five tips we’ve shared today will help you with this. Have you bought and sold in Spain before? Do you have any other tips for property investment in Spain?
This is a guest post from I Sold My House.
Have you bought any investment properties in Spain? Or are you thinking about doing so? Would you be interested in sharing your story with us? Either as a guest post or via our podcast series? Please do get in touch if so, we’d love to hear from you.
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