All Forum Posts by: Maria Murphy

@Mike Lambert

I think we’ve touched on this before 🙂. I don’t claim to know the entire Spanish market, but as far as Valencia (capital) is concerned, I stand by my view: most residential opportunities in the open market that offer an attractive yield are limited to very specific types of projects (co-living, short-term rentals, etc.). These carry their own significant risks, and in my opinion, the potential returns don’t adequately compensate for those risks.

As for the local “bubble,” price-to-income and rent-to-price ratios have already stretched to unsustainable levels in many neighborhoods.

That said, my analysis is very localized and may not apply to suburban areas or other regions.

Edit — One more thing: I hear you, and of course I agree about the importance of interest rates—only a fool would dismiss them. That said, my analysis isn’t focused on the US. I wouldn’t invest there anyway, even though I believe the potential for capital appreciation is much greater than in the EU. It’s simply a market I don’t know well, aside from observing its spectacular price increases.

Agree 100%, Borja. Most opportunities for decent profits (like the ones you mentioned) involve significant legal risks (e.g., STRs, colivings) that aren’t present in many other markets. It also doesn’t help when too many brokers/operators push poor deals under false pretenses to international investors—but I suppose that’s part of the game.

In my view, the bubble is real and current price levels are unsustainable in the medium to long run (especially for locals). Still, let’s see how things play out over the next five years.

Appreciate the thoughtful follow-up — it’s great to have a nuanced exchange like this.

You're right: all investing involves some level of speculation — projections, by nature, are uncertain. That said, rental income historically tends to show more stability and predictability over time compared to property values, which can be more sensitive to market cycles, interest rates, and sentiment shifts. So while nothing is risk-free, I do find the rental side of the equation offers more reliable baselines when evaluating downside protection.

Just to clarify one point: I wasn’t suggesting that investors should avoid markets that have appreciated significantly — only that if prices have surged recently, it's worth being extra cautious. That kind of sharp upward movement can be harder to sustain in the near term, and as we both know, timing plays a huge role in outcomes. Buying after a run-up isn’t inherently wrong — it just calls for deeper scrutiny of fundamentals and future growth drivers.

On the topic of demand, I also slightly disagree with the notion that people will continue to buy in certain locations “regardless of price.” While some places — Monaco, Dubai, etc. — do have unique drivers like tax shelters or constrained supply, generally speaking, demand isn't perfectly inelastic. Even in desirable areas, there’s a threshold beyond which price can start to curb demand — especially if regulatory or financing conditions shift.

That said, I don’t pretend to know the Costa del Sol market well, and you may be absolutely right that current valuations there still offer strong upside. My comments were more broadly about how I approach markets where prices have already made big moves and where visibility into long-term regulation and affordability trends is limited.

Lastly, my core objective in real estate isn't just cash flow or even long-term wealth creation — it's ensuring that the risk I'm taking is being appropriately compensated. That might mean passing on opportunities others find compelling, but it's the framework that gives me conviction in the choices I do make.

Sure, capital appreciation is critical. That said, it’s also highly unpredictable (and in my opinion: a bet) — especially in markets that have seen significant price growth in recent years. I tend to be more cautious in those environments. There are many moving parts to consider.

I agree there's a lot of misunderstanding around STR regulatory risk, but in my view, the risk is often underestimated, not overblown. Regulatory changes can come from national, regional, and local levels — and they don't always stop at illegal listings. Just look at tax measures in France or tighter regional/city regulations like we've seen in Valencia.

You're right — it's all market-dependent. I don’t know Costa del Sol (and you may indeed be insulated there), but Spain’s affordable housing shortage isn’t limited to Barcelona, Madrid, or Valencia. It's a growing issue, and I wouldn’t be surprised to see broader regulatory tightening in response — even if driven more by optics than outcomes.

STRs are the most visible targets right now, but other models like co-living are starting to draw attention too. It'll be interesting to see how that plays out over the next few years. And I wouldn't expect the logic of policy to always align with economic fundamentals — the STR ban in BCN affects just ~10K units, but it's still firmly in place.

At the end of the day, it comes down to your risk/reward profile. I see real estate investing not as "taking risks you're paid for" but as systematically de-risking by deeply understanding the regulatory, economic, and political environment of each deal. In other words, it's about staying ahead of regulation, not reacting to it. If you get that wrong, appreciation or not, the downside can be swift and permanent.

I understand that very well.

Finding strong real estate deals is undeniably tough. The industry is littered with bankruptcies when the music stops—largely because many investors and developers would rather pursue mediocre deals (often unknowingly) than sit on the sidelines and wait for the right opportunity.

I meant that a ROI circa 10% (or even 15%) is way too low for me to invest in STRs, considering all the risks and headaches involved.

I don't agree that the STR regulatory risk is only local/regional. It's both regional AND national in my opinion (at least, in Spain - see the last developments).

Of course leverage matters but in my opinion, it's just not worth it to assume admin risk + construction/renovation risk + regulatory risk (extremely high for STRs in Spain) for circa 10% ROI.

I think MTRs is the way to go in Spain.

I am not sure why one would think there are no multifamily investment properties in Spain. There are plenty apartment buildings, the issue is finding them at the right price point - as in any hot market. 

About me, most of my assets are RE but in another market so I would be diversifying in that market.

Potential for appreciation is very uncertain: prices have risen a lot locally lately and are as high as they have ever been, and it’s unlikely higher prices would be affordable by locals. The rental market is strong due to students and digital nomads.

Managing a couple of tenants would not be too hard but managing a dozen, on the other hand, would be a nightmare.

I am a bit torn.