If you are from outside the EU you now have the possibility of getting residency in Spain at a cost of anything over 500,000 Euros, the minimum spend required, mortgage free, in order to apply for residency which will be granted automatically. Over on the Spanish Residency Site we have detailed the requirements for getting residency if you are not an EU citizen and you can see that post here.
The purchase can be of just one property, for example something like the Palace in the image below, or it can be composed of many different properties amounting to a total of over 500,000 Euros.
So today’s question is how do you put together a Portfolio of properties that cost over 500,000 Euros? The first consideration should be what you want to do with it of course. Are you looking to have the properties for yourself, one in the city, a country home and a beach apartment for example. If so then there are no considerations of potential rental income and the only calculation should be whether you would be happy staying at them all. In this case I would suggest spending the most money on the property that you intend to spend most of your time at. A portfolio like that below could suit with a city apartment attic for everyday living, a country house for the weekends and maybe holidays and a beach apartment for when you just want to laze the days away.
If you are going to be living in one property but looking to rent out others on long term lets to guarantee an income then you will probably want to have a pretty comfortable main property for yourself without spending too much so you can then maximise the return from other properties in the Portfolio. Taking Valencia as an example of a University city with a permanent population looking to rent it is difficult to find any properties for less than 400 Euros per month that are half decent. Therefore you may want to buy a variety of properties for between 50000 Euros and 100,000 Euros to spread the risk and diversify. A sample portfolio of this type may look like this. The individual properties will return anything from 5-12% rental return with little maintenance or cost due to the low monthly overheads and council taxes. These type of properties are especially suited for students, teachers and essential service workers such as nurses, firemen etc…
If you are looking to maximise rental return and perhaps you want residency but are not even thinking of living in Spain, having residency doesn’t mean you have to live here but you still get the benefits of free movement around the Schengen countries for example, then you may want to get a portfolio of holiday rental places. It is best to maximise return on these by making them maybe a combination of city flats for the city break market, golf properties and beachside properties. Remember though that at least in mainland Spain beachside properties have a high season of three months in the summer and a low season of nine months. City apartments can have short term rentals all year round and golf property again may be all year round. A portfolio of this type may look like this one based around Malaga. High quality and offering a great incentive to people looking to rent all year round. Expect good returns on a Portfolio of this type but also the costs are higher having to pay for a property management team to do the changeovers and maybe even the marketing. Expect to pay 15-30% to this cost. However expect good weekly rates as they are well positioned and excellently provided for.
If you have any questions about property portfolios in Spain for non EU residents or simply want to know more either read more at the Spanish Residency site or send us a mail to SpanishPropertyMagazine@gmail.com and can will arrange a skype chat or a call.