All Forum Posts by: Erwin Groenendijk

Hi @Steve Rittinghaus,

Yes we do. From the perspective of property management, doing renovations in order to prepare a property for tourist rentals, and requesting tourist licenses. 

What do you want to know?

Erwin

@Jeremy Mahan @Andres Calderon

Hi guys, 

Spain for sure is one of the best locations in Europe to be in general and related to that owning STR properties.

The thing is that tourist licenses are getting more restricted bit by bit, starting in the bigger cities. 

In for example Barcelona, you can forget obtaining a tourist license on your property. The only way is buying a property that already has a tourist license, however the value of these properties increases with 50-100k and will affect your yield. 

We are active a lot in Valencia (third biggest city of Spain) and there you can still obtain tourist licenses if you know what you're doing. Always ofcourse in collaboration with an architect who is doing the due diligence checks so you know for sure you can get it.

As a foreigner it is as easy as for residents to get a mortgage, the only thing is that non-residents can get up to 70% LTV mortgages (80% for residents) and for tourist rentals it normally drops a bit more to around 60ish% LTV. European non-residents start with 19% income tax (STR's are normally added to your taxable income if you don't provide hotel services during their stay, which is 0 if you don't live there yourself) and can deduct costs, while non-Europeans start with 24% and can not deduct costs.

The affordability is completely based on your property (location, rates, occupancy), however we are normally able to achieve 20+% gross yields with these STR's. Have in mind though to calculate a management fee deduction if you are not going to manage the place yourself. Even with this management fee, you can see why people are finding the STR business an interesting investment strategy.

Not to forget that an STR can be your holiday destination as well if you decide to stay their yourself once per year.

@Alicia Marks for expats/non-residents basically the same applies as explained before, the only thing that changes is the LTV the banks are willing to give you. Instead of 80% for residents, they will move towards 70% for non-residents. It could be that the interest rate will change slightly as assessing the risk profile is different for people not living in Spain.

Feel free to reach out at the time you're coming so we can bring you in contact with some mortgage brokers that are used to working with international clients. 

@Nathan Longuet-Ax exactly, we're talking here about renting rooms short-term (less than 30 days) on platforms like Airbnb. With the medium contracts there wouldn't be any problem.

Hi Nathan,

Good to see you in the meetup and let me try to help you out here.

- For a primary residence a bank is always willing to be more flexible with most likely the LTV they will give you. As for residences in Spain the first two apartments should be given for 80%, they might be willing to higher it up for your first property while at the same time lowering the % on your second property. It also depends on your risk profile in their system and of course your willingness to obtain a higher mortgage (higher mortgages come with higher payments). Also, watch out for additional clauses or insurance that they include when they higher the LTV.

- Banks will take into account the revenue assets are bringing, yes.

- Renting out rooms in the apartment you are living in yourself is not possible anymore in Barcelona and I think the whole Catalunya region. This was possible before but they changed the law. There are some rumours however that this might change at some point. 

Cheers

@Rick Albert feel free to reach out when you are here or want to know more about the strategies or flipping in specific. 

We are currently converting and flipping several projects in the Valencia area and are planning to scale up now that the opportunities are there (especially still being able to request tourist licenses if you know what you are doing).

Low purchasing prices and overall projects costs and 15-20+% yields. 

@Karl Sanft, we are active in Spain with several projects in the Barcelona and Valencia areas. We have been talking about a lot of topics in Spain as well before, so it could be an idea to look back at the other forum posts.

What are you searching for exactly? A BTL, yield, price?

It is good that you are reading a lot in US terms however at the same time make sure to translate this to the reality here in Spain. 

You are referring to a notary where you finalize the deed signing.

Have never heard of doing it in this way because especially at the notarios they prefer having IBAN accounts to send the money to. In the end, they are the ones to control what is happening is legit, so they might block it in this way.

However, me not hearing about it before doesn't mean that it is impossible.

Why not start calling some notaries and ask if they would accept it?

Hi @Vasilii Higgs, are you referring to the sellers when you are talking about a title company? And would you get an IBAN number using these two companies? 

Exchange rates is a topic that we as investors in Spain couldn't say that much about, however about investing in Spain in general we do know a lot. I too know by coincidence Billy that you are referring to and what I understand from the conversations with him is that it is not the difficulty of Spain why he is still investing in the US, but more his experience and contacts back in the US that is making him decide to stick to the formula that he knows and works for him. 

There are a couple of points that are making Spain an interesting market to invest in:

- there are still a lot of investment opportunities as investing in real estate is not as popular/exploited as in the US

- prices are generally lower than in the US (/or Northern Europe where I am originally from) so the same euro/dollar earned in the US can be put easier to work and more divided into more projects

- if you understand investing you will probably beat the competition quite easy because there are a lot of not well-presented properties for sale and for rent

- good yields are possible with traditional and especially coliving and tourist rentals

- getting financing is easy however for cash-out refinances etc you will need to become a bit more creative

And besides the numbers let's not forget the country, culture, food, quality of life and especially the sun (although in LA this wouldn't be something to complain about either ;-)). Tenant laws are more in favor of tenants and constructions are as simple as it gets if you have a good team.

We are doing multiple flip, conversion, coliving and other BTL projects in the Barcelona and Valencia areas and are finding good opportunities without too much hazzle. We will probably be able to help you out with most of your questions

@Gregory Pradervand in Barcelona it would be harder to find these net yields or prices or properties of these amounts. The prices are normally quite high (starting from 200k-ish) which means more difficult to achieve yields like this. You could possibly try in the outskirts of Barcelona or surrounding cities like Badalona.

Your aim is fair though and we normally search with +/- the same KPI's. 

Not sure about Malaga and Gran Canaria, perhaps somebody else can fill in this spot.

In Barcelona we would be able to help you with contractor contacts if you decide to move forward here.