International real estate investing: Spain

[William Tomlinson]

Hi,

    So I am interested in investing in international real estate, in particular in Spain. There is a growing market of abandoned medieval villages in Spain ( as well as Italy and France) that are for sale for low prices. These villages vary widely in their size etc and almost all require extensive rehab and renovations.

      One of my goals is to purchase one of these villages that is on or near the Camino de Santiago and either renovate or build from scratch a youth hostel (albergue juvenil). Anyone that has done the Camino de Santiago will know what I mean. These are essentially cheap hostels for pilgrims walking the Camino.

        Does anyone have advice on purchasing these villages and how to go about it? What kind of professionals do I need on my team to guide me through this process? I know next to nothing about international real estate lawyer etc and want to learn as much as possible. Any information and or contacts will be greatly appreciated. Thank you.

       William

[Daniel Alvarez]

@William Tomlinson This is a project I’ve had in my list for years, but not a priority atm so haven’t really defined it yet. Some pointers I’m happy to share, being from Spain:

- the Camino has a robust and growing base of 300k+ peregrinos annually with avg spend of ~1,000€ back in 2016

- pricing and services offered vary broadly, nightly rates can swing from “la voluntad” (whatever you can) to 100€+ per night with spa etc.

- competition for accommodation can be fierce, esp near Galicia (lessens as you move away along the 7+ official caminos). Avg occupancy <60% I understand. There are publicly (“ayuntamientos” and “parroquias”) and privately run accommodations (businesses, like local hosts and Airbnb’s)

- generally about Spain, licensing can take long, e.g. new construction and tourist permits. Also acquisition costs can be high, esp if financing (with taxes easily add 10% of purchase price)

I’d add also these days the traditional albergue / B&B model can be quite saturated in many areas, so you want to identify those and stay away, then also certain customers segments remain underserved, like cyclists.

If language isn’t a barrier take a look at: www.caminosantiago.org

In terms of the abandoned towns you may spot a good deal but they are not easy to come by anymore. You can search also for “casas rurales” to broaden your property search.

Note as well that each municipality will have its own rules and requirements to acquire property and do business, meaning more time and costs to budget for -aside rant, the amount of independent “municipios” is a big socioeconomic problem in Spain that needs serious consolidation (what do you get with nearly the same amount of politicians as the US, and the most in the EU? More taxes and more chaos is right).

Sorry for the long post, hope it helps.