FAQ

Frequently asked questions about our real estate advice

Unlike investing in stocks, real estate investments are less volatile. As an capital investment, land or residential properties are therefore much more stable and sustainable. Our recommendation is the targeted purchase of foreign real estate, such as in Valencia, Spain, where the market is not yet as overheated as in Germany. High rents can generate good returns and thus a long-term passive income.

A real estate agent is usually paid by the commission they receive on the sale of a property. That is why real estate agents often try to sell you properties at a high price in order to earn a correspondingly high commission.

We, however, receive a predetermined fixed amount based on the success of certain milestones, unrelated to the purchase price amount. This means that we profit only when your transaction is successful. Unlike a real estate agent, who is on the seller’s side, we are on yours, the buyer’s side, from the very beginning.

We work with real estate agents in carrying out the search, inspection and micro-market analysis of the apartments in the location, and they support us in the local coordination of the parties (e.g. the notary, the bank and the seller). When necessary, we have the real estate agent provide us with an initial calculation for the expected rent and the renovation budget. It can be advantageous having them take over the search for tenants and the property management after the purchase, as they will be expected to meet their “rent forecast”.

The first stage in the process is a free consultation, during which we explain the process in detail and discuss your goals. Then, if you choose to commission us, we will outline a suitable real estate investment strategy with you and create an initial financing and investment calculation.

We support you with all the administrative issues, as well as assisting in the communication with the Spanish banks to determine whether you can qualify for a mortgage.

Next, we find and analyse a selection of real estate for you, after which, you can decide what needs to be inspected by a real estate agent and, if necessary, a building surveyor.

We then create a detailed financing and investment calculation and deepen the examination and analysis of the apartment.

When everything is in order, you can sign a reservation contract, allowing you to apply for a mortgage at the bank, which we can help you with. After setting the notary appointment — again, with our help, as needed — you can finally purchase your real estate.

After the purchase, the local property management will look for a suitable tenant and manage the apartment for you. Then it’s time to sit back and enjoy the rewards.

Due to the COVID-19 problem, many administrative steps are taking longer than usual. Thanks to efficient communication channels and a good network at the location, buying a property from Germany only takes an average of four to six months.

As standard practice, we accompany you from the planning, through the purchase and the first administration phase, up to three months after signing the purchase contract at the notary. If you want, you can commission us to continue to administer the ongoing communication with the property management after these three months. If there are major problems or renovation measures, we will discuss them with you and will continue to advise you.

We will be paid in three instalments of EUR 2,000 upon completion of each of three milestones in the process. If the entire transaction is successful, our total will be EUR 6,000. If you choose to continue using our administrative services after the initial three months post-purchase, we charge a small fee of only EUR 40 per month.

The most important document is the NIE (Número de Identidad de Extranjero). If you want to apply for a mortgage with a Spanish bank, you will need, among other things: current Schufa, bank statements, employment contract, tax returns, etc. If you do not want to fly to Spain to sign the purchase contract and mortgage, we recommend that you use a local Spanish lawyer to whom you have granted a notarial power of attorney so that he can sign the purchase and mortgage contract at the notary on your behalf. Should you select this option, we, of course, can walk you through the process.

Through our large network in Valencia, Spain, we can also support you in selling real estate. We have contact with several real estate agents who can market your apartment inexpensively and at the best possible price.

Since the real estate market in Valencia is largely between private individuals, it is very dynamic. This means that properties advertised online can be reserved or sold within one to two weeks. Just the collection and compilation of your documents relevant to the transaction (e.g. your Schufa information and NIE) can take several weeks, meaning that any properties you looked at now would no longer be available by the time you could purchase them. Accordingly, it only makes sense to look for concrete real estate offers as soon as you are ready to buy. However, in order to get a feeling for the apartments, prices and rents in Valencia, we have put together on our website a few selected investments that we have already seen through to completion.

Select investments

The risks when buying property in Spain are similar to those in Germany. These include, among other things, that the tenant may not pay the rent or might damage the apartment. Other risks are that the apartment is not checked thoroughly enough before the purchase and that more things need to be repaired after the purchase than originally anticipated. Risks and costs can be minimised by carefully inspecting the home prior to purchase and diligently managing the home after purchase.

Due to some banking regulations in Spain, it is an advantage if you are a citizen of the European Union. However, regardless of your nationality, you can contact us at any time and we will discuss with you what options are available to you.

If you wish, it is of course an option. But it is not a necessity. We have trusted lawyers in Valencia to whom you can give a notarial power of attorney to sign the deed of sale in Spain on your behalf. If you would like to fly to Spain to view the apartment or sign all the necessary documents on site, we will certainly be happy to help you organise your trip.

We have several real estate agents on site who will visit the apartment and take videos and photos for you, as well as conduct an initial apartment inspection. For a more in-depth examination of the building structure, among other things, we recommend that you hire an architect/building surveyor after you have selected the apartment you want. They can then accompany the real estate agent on a visit, check the building structure and carry out any necessary repairs. We would be happy to coordinate and support you in this.

After the purchase, we look for a suitable tenant for your apartment together with the local property management company. After the notary appointment, our service will continue for three months to ensure a smooth transition. If you wish, we can continue to manage the apartment with the support of the property management. You can also coordinate and communicate with the property management directly and manage your apartment without us.

We and the property management have a wide network in Valencia, consisting of several craft businesses and independent craftsmen. Together with the property management, we can take care of the coordination of the renovations necessary prior to renting out your apartment.

That would depend on your chosen rental strategy and your tenant(s), but, in principle, it is possible to stay in your apartment during your holiday in beautiful Valencia.

Certainly, you can! We can only recommend service providers with whom we have had good experiences in the past. But of course, we will also support you should you desire to take over the communication with the service providers yourself.

Of course, we can also recommend trustworthy partners in Valencia even if you do not explicitly use our service.

Financing

As usual with real estate transactions, you can finance the purchase with a mortgage (from a Spanish bank), in cash, or with a loan (from a German bank). Here’s an example:

Purchase Price: EUR 100,000

Additional Costs: EUR 30,000

Total Financing Needs: EUR 130,000

The maximum mortgage amount that a bank in Spain will allow for non-residents is 50-70% of the purchase price. If, for example, you receive about EUR 70,000 from the Spanish bank and get another EUR 30,000 via a private loan from a German bank, you would therefore need only EUR 30,000 of equity.

To make your real estate financing easier, you can use our Comparison Calculator to quickly and efficiently search for the right loan in Germany for your investment.

In our experience, German banks either do not finance property purchases in Spain with a mortgage loan, or do so only if you have sufficient collateral (e.g. a property) in Germany. However, since every bank is different, we recommend that you ask your personal bank adviser. Luckily it doesn’t cost anything to ask.

In addition to our own bank contacts, we regularly work with mortgage brokers who take on the task of finding and communicating with a suitable bank. If you wish, we will be happy to help you with compiling the necessary documents and information in order to apply for a mortgage with a Spanish bank.

You would be more than welcome to get in touch with us, and we will try to find a solution together with you. We are financing experts and would be happy to evaluate all options as to whether and how an investment could be possible for you.

Real Estate Investment

There are already many institutional investors with large investment funds in the major cities of Germany, and also in large Spanish cities such as Madrid and Barcelona. These funds have to invest millions and billions of euros every year and these investors therefore bid on real estate even when prices are high.

Coming up with these large amounts is not the only challenge facing smaller investors. Due to the legal protection in effect in Germany, rental prices cannot increase at the same rate as purchase prices, resulting in lower rental yields.

Although the house prices in Valencia are rising, so are the rental prices. While the relationship between these two important factors remains intact, property owners can continue to see generally better rental yields in Spain. Once more institutional investors enter the market, this enticing opportunity may be lost.

The real estate transfer tax in Valencia is 10% of the purchase price, and the real estate agent takes 2.5-4%. The notary, land register and administration make up about 1.5%, and we charge EUR 6,000 for our service, paid in three instalments upon completion of a milestone. Additional costs may arise if, for example, you hire a lawyer or building surveyor, or if you want to take out a mortgage.

Our focus is on centrally-located apartments in Valencia, Spain, with purchase prices between EUR 90,000 and 200,000 and a rental yield of 7-11%.

Naturally. Many financial experts are convinced that real estate is the only way to achieve financial freedom. We don’t want to go that far, but real estate certainly allows you to achieve financial freedom faster and more securely than the alternatives.

Spain and Germany

That is indeed our current focus. We see an attractive market niche in Valencia with excellent real estate returns — an opportunity that we didn’t want to miss, and which we want to share with you. However, we are also open to taking on alternative locations in Spain in the future, and look forward to your ideas and suggestions.

No. You don’t have to speak Spanish to buy a property in Spain. However, some knowledge of English would be an advantage.

You have the option of doing it yourself (as in Germany) or you can hire a professional tax consultant for about EUR 10-20 per month to do your Spanish tax return for you.

Of course it isn’t legal! No one is allowed to enter and occupy someone else’s property without permission. Spain is a member of the European Union and therefore has a very similar legal system to Germany and other EU countries. However, as in Germany, it is quite difficult to forcibly remove residents from an apartment once they have settled there. It is therefore important to have a well-organised local property management company that takes care of the apartment on your behalf.

Yes, Spain is the fourth-largest economy in the European Union with falling unemployment rates (excluding the effects of COVID-19) and increasing economic power.