All Forum Posts by: Erwin Groenendijk

@Edward Stephens, like this nobody ever will get motivated to start something ;-)

@Jeulissa Gonzales, he is partly right though.

Some things to have in mind when renting by the room is that there are all kinds of different people living in the same house which could get friction (by the way, a lot of times it also leads to friendships or even entrepreneurs that start a business together like it was in my case). To overcome most of the common issues is to have at least good customer service, management, maintenance, cleaning and rental teams from which we have been seeing for the last 4 years having 350 rooms in our coliving portfolio in Spain.

@Mike Lambert have to admit that in my first reply I also had to double-think about including the property management or not. Hope you are well and congrats on your apartment in the Costa del Sol. 

@Chris Tedeschi on average you will find a higher m2 price in the Costa del Sol because there are a lot of new developments. Also in the Costa Brava going up from Barcelona this is mostly the case in the more popular towns. In the Costa Blanca and Valencian coast, the m2 prices are generally lower. 

This is how we can offer a relatively low investment entry barrier (to first try out if Spain and this area are fitting the needs, which mostly after starting it immediately does) and offer good returns.

The difference between our projects and these new developments is that with these new developments, you can buy off plan when it is almost finished or buy a completely new apartment to immediately start renting it out. You basically pay the margin of the developer. This is fine when the investment still makes sense of course.

However, what we normally try to do is keep this margin for ourselves and step in from the beginning (lower total project costs and because of that higher returns). The downside though if we can call it like that, is that it takes a year to complete the project and be able to rent it out.

Have a good weekend guys  

Thanks for explaining everything @Chris Tedeschi. 

@Mike Lambert, although the 5% CoC looks a bit low, after including all the costs including the property management commission etc. making multiple times more than this is also getting tougher.

Chris, why we are making 10-15% CoC is because we manage to buy tourist units for a very low price in Valencia. We are transforming the ground floor of buildings because that is still the only way to get the licenses there. Buying them at a low price makes it possible to easily get good investment yields. As an example: the total costs (including purchase, renovation, and all other costs) of these units are around 100.000 and most of the time you can easily rent them out for 2.000 of monthly income. Also here the lower seasons are not that low because in winter periods a lot of people are still visiting a big city of Valencia.

Now, keep in mind, these are not new development units with sea view. These units are pure investments however still quite nice to spend some time in it yourself as well.

Different properties and a different focus. Both work.

Hi @Chris Tedeschi,

Nice and congrats on finding the project.

The 5% CoC return seems a bit low to me. We are doing multiple projects like this in Valencia where we are hitting 15% quite easily.

It all depends on the price of the project in the end. 

Could you explain more about the numbers, location, project, etc?

@Jose Alberto González, send us a message the next time you are coming to Valencia for a coffee and talk further. 

For everybody who is investing in Spain and especially flipping properties, have the following changes in the profit tax in mind.

Where before profits above €200.000 was taxed at 25%, this year this is rising. 

2022:

€0-€6.000 at 19%

€6.000-€50.000 at 21%

€50.000-€200.000 at 23%

>€200.000 at 25%

In 2023:

€0-€6.000 at 19%

€6.000-€50.000 at 21%

€50.000-€200.000 at 23%

€200.000-€300.000 at 27%

>€300.000 at 28%

The higher profits are being taxed more.

Hi @Jose Alberto González,

Where are you based in Spain and where are you investing?

If this is close to Barcelona and/or Valencia, let's meet up. We are doing quite some projects in both cities. 

Also you can have a look at all the previous posts where we are talking about a lot of topics in Spain. 

We are in Barcelona and also a lot in Valencia so we should meet. Will send a DM.

In which neighbourhood in Valencia is this deal?

Hi @PJ Boxel, cool to be reading through your deal. This is making us both Dutch people liking and investing in Spain 👍

In which city are you investing?

And how are you doing the calculations for the total ROI to get to the 30,61%?

@Kendrick Perry @Mike Lambert Exactly, what Mike is saying. There are always exceptions based on your track record or relation with a specific bank in another country, however expect higher interest rates as they see an international investment as something riskier. 

The good thing is that you would be able to obtain financing as a foreigner/non-resident as easy as me in Spain based on the risk check that they would do. 

Could you explain more about what your plan/target purchase is? We might be able to put you in contact with people of your interest as we have been doing the same thing for years already