Real Estate Investment in Barcelona

Real estate investment in Barcelona has experienced a boost during the third quarter of 2024 thanks to the low interest rates of the ECB (European Central Bank). According to CBRE figures, in the months from July to September, operations totaling 533 million euros were carried out. This figure represents double the amount accumulated in the same months of 2023.

With the presence of a solid real estate market, architectural works and a cultural wealth, the Catalan city is synonymous with opportunities for any real estate agency. But, it is necessary to take into account certain aspects when making a real estate investment, so the most important are detailed:

How to calculate the profitability of your real estate investment in Barcelona?

Determining how profitable a real estate investment in Barcelona is means that several steps have to be taken. First of all, it is crucial to identify the income per year that will be generated by the property, the most common is through the rental of it.

Then, you have to consider the associated expenses, these can be services for owners in Barcelona, taxes, maintenance, community expenses, insurance, etc.

Variable expenses to consider

There are several variable expenses, so it is necessary to take them into account:

• Time between the departure of a tenant and the arrival of a new one, this can take months in which the property will not be rented.
• Variations in the types of taxes that must be paid.
• Making unplanned repairs at the structure level or on appliances and heating systems.
• Insurance costs.

When calculating the profitability of a real estate investment there are certain expenses that it is impossible to estimate. But, an approach that fits reality must be made and do not forget that they are also part of the investment. If all expenses are taken into account, the overall cost will be adjusted to the real value.

Proceed with the calculation using formulas

Once all the associated information is collected, the next thing is to apply formulas to determine gross and net profitability.

In the case of gross profitability, it is necessary to divide the annual rental income of the property by the current value or purchase price and the result is multiplied by 100.

However, to calculate the net profitability, the formula must be adjusted, including the annual expenses of the property. Therefore, the annual rental income of the property is subtracted from the annual expenses and divided by the current value or purchase price. Then the result should be multiplied by 100.

It should be noted that the figure obtained in both calculations is in percentage and serves to have an accurate idea of how much the return on a real estate investment will be. Owners who want to do rental management in Barcelona use it for making decisions associated with their properties.

Advantages of making a real estate investment in Barcelona

Making a real estate investment in Barcelona has certain advantages, for example, it is a city with high tourist value and a solid economic center. As a result, there is always a demand for properties, both to rent and to buy.

It also has a unique infrastructure in terms of transport, which increases the quality of life of its inhabitants. Therefore, acquiring a property in the Catalan city makes it the ideal place to work, live or visit.

Another advantage is the drop in interest rates, in 2023, they were a challenge to invest, leaving large companies out of the market. But, in 2024, this has changed, providing more opportunities to manage a property in Barcelona.

With lower interest rates, financing costs become more attractive to investors, allowing for higher volume transactions. With the possibility of cheap loans, investments in lagging areas, such as offices and residences, are now attractive.

Historically, the real estate market in Barcelona has remained stable and able to withstand any economic fluctuations. This represents an opportunity for any real estate agency in Barcelona, as is the case with Muppy.

What is Muppy?

Muppy is a company focused on the rental of colivings in cities in Spain such as Madrid, Barcelona, Alicante, Valencia and Malaga. It is an activity that allows owners to share common areas of a building with neighbors.

The advantage of this type of real estate investments is that people share their experiences, projects and ideas, respecting each other's privacy at all times. Therefore, it is a philosophy of life that promotes socialization, something similar to what happens with coworking in business.

Also, this company offers rental management services in Barcelona, ideal for people who intend to invest in a flat and get a return on it.

For those who already own a property and do not know how to generate income with it, Muppy will take care of that.

The best areas of Barcelona to invest in housing

People who buy a property in Barcelona and then put it up for rent get a gross return of 5.7%, a figure 0.3% higher than the previous year. So, it is crucial to know which are the best areas to invest in real estate in the Catalan city:

Manresa

It is a growing area that is experiencing an increase in the price of its properties, which makes it attractive for real estate investments. In its list of options there are services, restaurants and shops, as well as cultural centers and educational institutions.

Terrassa

Terrassa is a tourist destination for people who want to invest in Barcelona, it has a unique atmosphere and is full of high-value properties. Buying a property in this area represents an opportunity to obtain a high profitability.

Sabadell

Sabadell is in the vicinity of Barcelona and is an ideal area to invest in properties thanks to its affordable prices and variety of options to choose from. This area is quiet and has developed communication routes, which allows to preserve the balance between quality and price.

The best neighborhoods to invest in Barcelona

The most sought-after neighborhoods to make a real estate investment in Barcelona are the following:

Neighborhoods such as Sant Pere, El Poblenou, Sta. Caterina i la Ribera, Vila de Gràcia and La Nova Esquerra de l'Eixample are located below 5% profitability.

What is the real estate market like in Barcelona?

Political stability in Barcelona is showing signs of improvement, giving way to a safer environment for making real estate investments.

In addition, this city is a tourist destination for the French and English, but there has been an increase in American investors. This is a new group that is attracted by the Mediterranean climate and the culture of the city, and is willing to pay large sums for a flat or housing.

This behavior has been seen especially in areas such as Eixample, L'Antiga and Dreta, which makes it clear that it is the ideal opportunity to invest in properties.

The real estate market in the Catalan city is in a favorable situation due to the decrease in political tensions. In addition, the tourist attractions and the arrival of international investors make it clear that it is the ideal time to make a real estate investment in Barcelona.