Given the great strength of the Spanish real estate sector, real estate is one of the main ways to invest in Spain, attracting thousands of investors from all over the world, and especially from Latin American countries such as Mexico, Argentina, Peru or Colombia.
However, the reality is that they are still unknown to a large part of the population, which is why, at Lawyers & Accountants, as real estate advisors, we are going to tell you everything you need to know to invest in them.
What is real estate?
Real estate is everything that, by its nature, cannot be moved, in other words, real estate are such as buildings, land, etc.
Known as “Real Estate” in English, they are so called because, physically or legally, they are inseparably attached to the ground, and therefore cannot be moved. The term real estate is also used to refer to real estate in general.
What types of real estate are there?
According to Article 334 of the Civil Code, real estate is land, buildings, roads and constructions attached to the ground.
Article 334
The following are immovable property:
- Land, buildings, roads and constructions of all kinds attached to the ground.
- Trees and plants and unearned fruits, as long as they are attached to the land or form an integral part of an immovable
- Everything which is attached to a property in a fixed manner, which cannot be separated without damaging the material or deteriorating the object.
- Statues, reliefs, paintings or other objects of use or ornamentation, placed on buildings or estates by the owner of the property in such a way as to reveal the intention to permanently attach them to the property.
- Machines, vessels, instruments or utensils intended by the owner of the property for the industry or operation carried out in a building or estate, and which directly meet the needs of the operation itself.
- Animal nurseries, dovecotes, beehives, fish ponds or similar hatcheries, when the owner has placed them or keeps them for the purpose of keeping them attached to the property and forming a permanent part of it.
- Fertilisers intended for the cultivation of an estate, which are on the land where they are to be used.
- Mines, quarries and slag heaps, while their material remains attached to the deposit, and living or stagnant water.
- Dikes and constructions which, even if they are floating, are intended by their purpose and conditions to remain at a fixed point on a river, lake or coast.
- Administrative concessions for public works and easements and other rights in rem over immovable property.
These can come in different types:
- By nature: soil and subsoil.
- By incorporation: constructions.
- By their destination: they increase the value of the main real estate.
- By analogy: mortgages.
- By access: the fixed furniture of the main real estate.
- By representation: deeds and registers that give title to the owner.
Said that, the types of real estate are generally divided into three groups:
- Residential real estate: undeveloped land, houses, condominiums, etc.
- Commercial real estate: office buildings, warehouses, commercial premises, etc.
- Industrial real estate: factories, mines, farms, etc.
How to invest in real estate?
Since they are assets that have historically given good results, many investors decide to invest in real estate in Spain, as it is a formula that allows them to obtain profitability.
Up next, we are going to tell you how to invest in real estate, showing the most common ways of doing so:
Purchase:
Consiste en comprar un bien raíz y venderlo una vez se haya revalorizado. Aunque la rentabilidad no es inmediata, sí puede resultar muy interesante.
This consists of buying a real estate and selling it once it has appreciated in value. Although the return is not immediate, it can be very interesting.
Buying a real estate for refurbishment:
Another option is to buy a property for refurbishment and sell it at a higher margin. It would be the same formula as the previous one, but with the added value of the refurbishment, which will revalue the property and allow a higher return on the sale.
Buying a real estate for obtain an income:
It is also common to buy a real estate in order to rent it and obtain an income. Here it is necessary to take into account the money destined to the purchase as well as the rest of the expenses, in order to know the total amount of the investment.
Web development/Real estate crowdfunding:
Real estate crowdfunding consists of investing in real estate together with other investors, without having to assume the total investment. There are different platforms of real estate crowdfunding that allow investing in a real estate in Spain together with many other investors, through very affordable amounts
Advantages of investing in real estate in Spain
As mentioned, investing in real estate offers a high profitability in most cases, making it an excellent option for diversifying your investments. If you pay the right price for real estate, you stand a good chance of making a significant profitability over the long term.
Over the long term, real estate portfolios tend to outperform non-real estate portfolios, and the risk of real estate is very low compared to other options such as the stock or bond markets.
At Lawyers & Accountants we help you to invest in real estate in Spain
Would you like to invest in real estate? At Lawyers & Accountants we have an extensive experience in helping investors to acquire property in Spain, giving financial, legal, tax and real estate advice necessary for the whole process, we also facilitate all the paperwork and procedures for the acquisition of properties, and we are at your disposal ready to help you.
If you are interested, contact us without obligation and a real estate advisor will provide you with all the information you need.
