Beruflich Dokumente
Kultur Dokumente
Buying in
Madrid
M A D R ID
TY SE
PROPER
ARCH A
ND
T IO N F O
R E LO C A
R E X PAT
After reading this book, you will be ready to take the right decision and set the
right expectations: budget, properties you can afford, location, and also how to
find your dream home.
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Conclusion
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Introduction
First steps ?
Do you feel overwhelmed with all the information available, and do not know where
to start ?
I am Pierre Waters, founder of Moving2Madrid, and in this ebook, I will answer the 5
essential questions all readers and clients ask us at the start:
Prices: What are the prices for real estate in Madrid ?
Neighborhoods: What are the best neighborhoods ?
Total Costs: What is the final total cost of buying, all included ?
Negotiation: How much can I expect to negotiate ?
Risks: How to avoid traps when buying ?
I keep it as simple and realistic as possible. If you need more details or have questions along the way, follow the links or just send me an email at email@moving2madrid.com with your questions.
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Chapter 1
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3000 / m2 is the average in Madrid Capital, which is the zone where you
have metro stops more or less .
2000 3500 / m2: the only solution in the centre of Madrid is Lavapies
and you will need to search and negotiate very well. You can afford nice
modern apartments a few metro stops from the centro district of Madrid.
1500 2000 / m2: the suburbs of Madrid, with less character but more
modern apartments.
You will need to optimize the budget and prioritize price over other needs.
Which leads us to our next question - where should you buy given these prices ?
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Chapter 2
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and gay
The Contenders
The Suburbs
family-focused
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My conclusion is that most opportunities are found not by betting on some neighborhoods, but on exhausting all options within your selection of these top neighborhoods, and
keeping an open mind of frontier zones, where mainstream buyers would not go, and
finally we find a great opportunity after negotiating.
Because indeed, its only after negotiating and optimizing all costs that you are sure to
get the return you were expecting ...
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Chapter 3
2.
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1
Taxes
610%
Madrid only, the lowest in Spain (7 to 11% in other regions such as Valencia or Barcelona)
starting in 2014.
Then there is a stamp tax (IAJD, Impuestos de Actos Juridicos Documentados) to cover
the legal work to be done by the local government for the apartment registry: between
0,3 to 0,7 %. If you want more of a specific estimate for your case, ask for your free consultation.
Because indeed, its only after negotiating and optimizing all costs that you are sure to
get the return you were expecting ...
2
Legal and Administrative
2000 to 4500
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obtaining you the NIE quickly, required Spanish identification to be the owner of an
apartment in Madrid.
checking the legal background and eventually estimating the real value of the
apartment for sale.
reviewing the offer and sales contract for the sale of the apartment
conducting the legal and administrative procedures to officialize the purchase of the
apartment.
Finally, with all these costs, there are many margins of improvement, to optimize on each
item, which is what we do for our clients.
But really, how much can we gain from negotiation - the elephant in the room ?
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Chapter 4
Wrong...
Its in fact one of the key preconceived ideas about Madrid real estate market.
Another one is:
Finding a good property is easy, and they will receive me with open arms.
Wrong again...
Why ? Because you want the best in the category you are interested in. You have good
taste, have experience and know you can get the best of the market.
And right now, the best of the market, this top 10%, even in the crisis, has demand.
Can you get an apartment for a fraction of its price ?
Obviously, the market has now changed from a sellers market to a buyers market. You
have the power.
But not the power to buy anything at a -70% price.
However, the stories on the news are always the most dramatic, and should not be taken
as an example of the entire market.
The center of Madrid is still a prime location with economic growth: 2011 was a growth
year still for Madrid, and May 2012 was the best year ever for tourism, with the largest
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number of visitors ever seen. As realtors say, Location, location and location.
So if you go for modern apartments in the most attractive neighborhoods of the centre of
Madrid, do not expect any big discount. Expect quality properties with great environment,
shops and entertainment around it, and buyers fighting to get the best priced properties.
Expect to find a quality property you like at a price never seen since 2004 and work to get an
even better price.
The average negotiation discount is slightly under 20% on the overall market.
What we are seeing for the properties that are the best in their category, with the right price,
the ones foreigners want to buy: the average negotiation discount is 10%.
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Chapter 5
2.
In both cases, we recommend to get an expert (an architect and a lawyer) to produce an
analysis certifying with their professional insurance that the property is safe.
For the lawyer, this means you ask to request the basic due diligence, but not any investigation. The lawyer will do the basic checks with the seller, with the registry, catastro and
checking debts.
As for the architect, he will check these papers, and check permits and licenses if needed, the official structural audit (ITE), and then view the property for potential defects.
If anything comes up, then it will give us leverage for the negotiation. However, it also
shows our interest. It has to be introduced in the right way.
The seller has to be warned then that we will complete the due diligence, and that if any
defect appears, which decreases the value of the asset, there will be more negotiation or
a retention until it is solved.
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When organizing the signing, there are lots of details, and all you need to know is the
following:
Has the lawyer certified the purchase ?
Has the architect certified the property ?
Has the notary reviewed everything beforehand ?
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Conclusion
How to get the most out of your move to Madrid?
With our budget, we want to get the best property, which can mean different things:
Our favorite based on our personal taste.
The property with the highest rental return.
The property with the safest rental return.
The property with the most flexibility to rent short-term and use for personal reasons.
the property with highest potential for capital appreciation.
And in the end, asking the right question is the first step to giving the right answer. My
experience tells me that the way to get the most out of the property, is to optimize each
step and expertise linked to buying:
search professionally, leveraging local network and exhausting the sources,
view methodically, to identify value where most dont.
evaluate location at a micro level, down to the block, not based on neighborhood,
know what the mainstream market wants and go for what has value and the classic
basic buyers dont want.
negotiate with a sound financial valuation as foundation, professional negotiation
training and a deep understanding of Madrid sellers idiosyncrasies.
refurbish with creativity and an attention to details most local providers dont have,
rent out with no preconceived idea, and every time test and measure to optimize.
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