Buying a Valencia Property with the right advice for investment purposes

Nov, 25 14 | No comments

Are you an overseas buyer willing to invest in Valencia Property?  Then you are in need of a capable property finder who can make you a list of desirable properties. It is not the same process as Buying an apartment in Madrid.  You want to make sure you get a return on your investment.  Contacting a good agent will also make sure that the property will become an asset for you.  Historically the fees for this are more money than in the United States, but it’s worth it in the end.

In the case of an overseas family who got in touch with the Spanish Brick, a professional in the realm of Valencia properties, you will see the value of these agents at work.  They were looking to buy two apartments in a city.

1)  Who: A couple in their late 30s, with two daughters.  They started looking for properties in Valencia in June, and wanted to find two flats for buy-to-let so they could make money off of rentals.  They also wanted to use one for vacations every year.

2)  What:  They couple hired the property finders to help them with investing in property in Spain (as 90% of people do in the end), especially to get help with taxes, necessities, and problems.
Their initial needs were as follows:
Around 150,000 euros per property
Two to three beds per property
Flexible on whether the apartments are downtown or on the coast
Wanted about 5% profit within the first two years

3)  Why:  There are three reasons to work with property finders, especially in Valencia.
1.  Especially if you are not from Spain, it is difficult to know all of the requirements and pitfalls.
2.  Beautiful does not always mean money.  Neighborhoods that perform well are not always the most attractive you can find.
3.  If you are ready to invest, you don’t want to waste any time.

4)  How:  Four different parts of Valencia were searched to find potential properties.  The family could then see more of what they were looking four in the different areas of the city.  Fourteen potential properties made the short list.  Eight were left after the couple went through the prepared list.

5) The assumption:  Clients really like the beach areas in Valencia and prefer them over the city, so we assume that we should put some of them on the list.

6)  The proceedings:  Three days were scheduled so that the couple could come view the properties. In the meantime, the finders kept searching for properties, and added three more to the list, including a home that cost less than their budget, just for kicks.

7)  The experience:  The investors loved their three days of searching.  They got to know the area, and see some examples that fit their criteria.  They went back to Switzerland and within a few days we found out that they had changed their minds after viewing the apartments, and were considering purchasing a house instead of an apartment now.

We found out that the house we had picked inspired them to find a home in Spain that was more traditional.  So, we went back to the drawing board and found five more homes that were under 160,000 euros.  They all needed a little work, but the couple ended up wanting two of them.  One was only 60,000 but was small, and the other was amazing but needed quite a few repairs.  Upon negotiations we were able to get the buyer to drop 20,000 off the asking price.

The break-down: BASIC FIGURES    
Property Purchasing Cost
Property Purchasing Price    € 90,000
Government Tax ITP    € 9,000
Total Purchasing Costs    € 99,000
Notary and Registry costs (approximately)    € 500
Solicitor fees and set up costs (setting up a Bank Account, etc…)    € 1,500
NIE Fee    € 160
Property Finder Fee (The Spanish Brick Fee)    € 4,000
Structural repairs (quote provided by the architect)    € 6,592
Basic refurbishments    € 29,000
Furniture    € 9,430
Total Costs    € 150,182

Total Cost (not including mortgage fees)    € 150,182

We expect 6% yield for longer term rentals and 8% yield for shorter amounts of time.

It is also a very flexible property, because it could be two apartments as well as a larger house, with the potential of making a 55% profit.  With the market on the upswing, it should be a good investment in a few years.

They also now own another property in the city of Valencia, that cost 130,000 euros.  It needs a lot of work, but they are working on getting the proper licenses and will begin work when possible.

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