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I’m looking to invest in a buy to let apartment or villa near barcelona. Which areas are best to invest? Any words of wisdom?
Hi Reba,
Depends what your strategy is.
Catalonia has a shorter holiday season than the south due to the climate, so if it’s buy-to-let on the coast you need to bear this in mind. I don’t think you could expect attractive rental yields for holiday properties given relatively high prices and limited window for rentals in season.
Having said that the rental potential in the south has been wildly exaggerated by estate agents keen to make a sale. Buyers are often told they can expect 30+ weeks when the reality is 5 – 10 weeks occupancy. Though the South has a better climate it also now suffers from a terrible over supply of rental properties. Unique properties, or properties whose owners make a full time job or marketing their properties, might still get 30+ weeks, but in general the health of the holiday rental market isn’t great anywhere.
Barcelona’s a different story, with it’s own problems and opportunities. On the positive side it has a year-round rental market and with the right property you can get very high occupancy and good average rates. However competition is now very stiff (hotel capacity has exploded, and everyone is trying to get in on the short term rental game), and property prices are high which puts pressure on yields. The government has presented a plan to regulate short-term rentals in the Gothic Quarter. This plan imposes much tighter regulations – basically the whole building will have to be dedicated to short-term rentals if apartments are to be rented legally – and if this plan is adopted, it will wipe out all the competition apart from those who comply with the regulations. Bad news for those who don’t be great for those who do.
It seems to me that the long-term rental market down by the beach in Sant Martí is performing well. Rents are very high at least. But property prices down there have surged in the last 2 years so yields might no longer be interesting. I haven’t had a chance to do any numbers on it so can’t say for sure.
For an up and coming area I think that Southern Catalonia and Northern Valencia is worth considering. Hasn’t yet opened up to foreigners but it will. However this means having the balance sheet to sit it out.
Mark
@reba wrote:
I’m looking to invest in a buy to let apartment or villa near barcelona. Which areas are best to invest? Any words of wisdom?
😉 Forget about Barcelona! Try eastern coastline of Malaga.
If you are buying a house or apartment on the basis that it will be paid for by rental income, DON’T. I know from personal experience that a four-bedroom house on the sea in a coastal village such as Begur will bring in excellent rent and will be booked, but only for 6-8 weeks during the summer. People should remember that this part of the world can be cold and windy during the winter. If you want to use the house yourself and can afford it without rental income, then go for it. Otherwise, don’t be fooled by the Place in the Sun-style progammes. I looked at all the coastal areas of Spain and the Costa Brava – apart from the Tossa/Lloret nightmare – is the best, rivalled only by de la Luz around Puerto Santa Maria.
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