Property flipping in Spain: a smart move or risky gamble?
Set a realistic budget from the start and collaborate with professionals to make the most of your resources.
Welcome to the Homevest Digest, a newsletter for non-residents looking to buy properties in Spain.
In this month’s newsletter, we look at property flipping in Spain and why it could be a good investment.
We’ll help you make the most of your property journey in Spain, from figuring out what you can afford and setting a budget to finding the best strategies for you.
Read time: 6 minutes
Is property flipping a smart move?
Property flipping starts with buying a property that needs work, often in popular areas, where renovations can increase its value.
While it needs a big initial investment, the potential for high profits makes it attractive.
Why it’s worth considering?
Flipping can be a good option if you’re looking for a creative, hands-on investment that give faster returns than traditional real estate. It helps diversify your investments and, if done carefully, can lead to good profits in a short time.
Fixing up undervalued properties also helps improve the area, increasing local property values and making the community more appealing.
Flipping can make you money, but it also has risks.
Unexpected renovation costs, changes in the market, and possible delays in selling can affect your profits. Having a realistic budget, a clear renovation plan, and knowing the local market can make a big difference.
Before planning renovations, let’s first look at your financing options.
How much can you borrow for a Spanish mortgage?
Knowing how much you can borrow to finance a property is the first step.
Several factors play a role in determining your financing options, including the loan-to-value (LTV) ratio, debt-to-income (DTI) ratio, residency status, income currency, and property type.
Non-residents typically qualify for an LTV of up to 70%, with a DTI ratio usually capped at 30%, although some lenders may go up to 40%.
Non-EUR-denominated incomes face stricter conditions, but earners in GBP and USD may be offered terms similar to those for Euro income.
Property type and location also impact loan amounts, with urban properties sometimes qualifying for higher financing.
Homevest can give you a clear estimate of how much you can borrow from Spanish banks, helping you set a realistic budget for your property search.
Whether you’re applying alone or with a co-applicant, Homevest makes it easy to understand your financing options, so you’re ready to move forward with your investment.
What strategies can help you get the most from your property journey?
Finding a property to renovate can be exciting but also challenging.
From choosing the right city and neighborhood to managing renovation costs and marketing your flipped property, each step needs careful planning.
While Barcelona and Madrid are often crowded due to high demand from both residents and visitors, they are still good places to invest. Malaga and Alicante, on the other hand, offer a great lifestyle, beautiful coastline, and easy access to major airports.
Start by setting a realistic budget and work with experts to best use your time and money.
Affordable renovations that add real value
Renovating kitchens and bathrooms, and making the property more energy-efficient, can bring a good return on investment.
These improvements raise the property’s value and attract buyers looking for modern, eco-friendly homes.
Recommended price range for first-time flippers
If you're new to flipping, consider properties priced between €100,000 and €200,000. This range usually keeps renovation costs manageable while still offering the chance for good profits.
Look for up-and-coming neighborhoods, which often have great potential for price increases. For example, Madrid Centro has a strong rental market.
As Oana Buda, a real estate personal shopper in Madrid, explains, “Madrid still offers properties at more affordable prices in areas with high demand. Many of these properties may need updates and renovations, which creates opportunities to add value. The best part is that the demand for rental properties is at an all-time high, with many people seeking a European lifestyle. Madrid might be the best option among them all.”
Marketing strategies for a flipped property
Focus on the property’s unique features and recent improvements. A good photo can say a lot, so make sure to show off the property visually.
Work with professionals like photographers and local real estate agents, and use social media to reach more people and sell faster.
Thanks for being here, and we’ll see you next month.
PS. If you found this valuable, here are other ways we can help:
Read our blog for insights about Spanish mortgages for non-residents.
Estimate your budget to understand how much you can afford before taking your mortgage process to the next level.
Find your right mortgage by signing up for a fast and easy process.