All Forum Posts by: Erwin Groenendijk

HI @Brenna M.,

We are investing with an SL here in Spain and helping many others to do this as well. There are a couple of advantages and basically, the conclusion is that when you decide to build up a portfolio at some point an SL is most appropriate. 

Regarding the tax rate, you are right. The first two years (when making a profit) are taxed at 15% and after that, this is a fixed 25%.

The documents you would need to file, among others, are the ones for paying VAT (IVA in Spain) and the company tax.

We are normally doing the bookkeeping with a professional accountant, just for the sake of wanting a professional person to manage our activities and because it is not our core activity. We have seen at times even higher prices for accounting. 

Hope this helps,

Hi @Emily Eisenhauer, 

We are investing in the Barcelona and Valencia area and are not that familiar with Granada. What we can help you with is what it is like to be investing in Spain, as I came to live here 8 years ago and now do deals every month. 

You can request financing as an individual or company, depending on your long-term strategy. If you are thinking of building a portfolio, managing this from a company is usually the most logical way to go. For individuals, you can get up to 80% LTV and as a company around 60%.

Hope this gives some direction.

Hi @Tony Valle, 

We don't have anything like automated calculations but we do everyone via Excel.

Your gross income minus:

- ~25% for a property management company

- utility and internet bills

- 5-10% capex

- insurance

- building community fees

- potentially a mortgage

- profit taxes over the amount that is still left

This should get you on the way

@Mike Lambert I get your thinking here by reading through it. Just know that we and our clients are getting this as fixed rates for mortgages.

@Mike Lambert no no we are talking here about fixed mortgages.

@Andrew Syrios we have been rising in Europe as well however in Spain today they published an article that the average mortgage rate is at 3,25% so that is still doable in these refinance operations. Especially when the yield is healthy as many times we are able to boost this with a tourist license on the properties. 

Hi @Stilyan Seferinkin, 

I like the creative thinking here. The only hurdle I see here is that the current owner would need to live in a ****hole for multiple months before selling it to you. This is especially the case if you want to increase the value from 100.000 to 178.000 euros, or in any kind of serious renovation.

By the way, we have been talking with some mortgage brokers and it seems that the BRRRR method is becoming more possible to do in Spain. Banks are more willing to give a mortgage on a property that you already own and force you at the same moment to finance another property from the received money. Now, the good thing now is that this financing can be used for the purchase of a property and also the renovation etc.

A cash-out refinancing mortgage is still not possible however this is already good enough of what we as investors are normally searching for.

Hi @Louis Albers, 

There is no right or wrong answer to your question. You can create wealth in both ways.

It would more depend on your strategy, where exactly you would like to buy, the amount of yield you would like to earn, your plan over the upcoming years.

Are you also based in Spain by any chance?

Have in mind that licenses are being given based on the density or in other words the amount of licenses already given. Too many licenses will disturb the local system, that is mainly how they think.

I agree with @Mike Lambert that Spain in general is a year round option for tourists because outside of summer (which honestly sometimes becomes a bit too hot) the sun shines even in winter times with very comfortable temperatures. The Costa del Sol, Costa Blanca/Valenciana, and Costa Brava all could be a good option when you do an analysis where the numbers work best/licenses are still being given.

Yes the battle for tourist licenses here in Barcelona is already over. It is still possible to build a portfolio of tourist rentals by purchasing properties that have a license on them, but expect to pay a serious price for it (market price + €50-100.000).

That is the reason why we are active in Valencia where it is still possible to get the licenses on certain properties. They are expecting that this will change in the upcoming 1-2 years, so we are now busy with all our capabilities to do as many projects as possible.