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Building renovations as part of a business strategy

Real estate investment is channeled in very different ways and not all of these methods imply that the property in question is fully available for commercial activity. Occasionally, buyers show a keen eye for purchasing renovation properties. This is a type of investment that is booming in our country and that is beginning to raise even the interest of the media. Whether you are unaware of this reality or if you have been weighing this option for some time, do not miss out on the features of this business strategy.

Urban real estate, especially those located in the most strategic areas of the main cities,(namely Madrid and Barcelona), have long been desirable for foreign investors. What these investors do not always know is that there is no reason why they should buy a fully equipped luxury apartment to make money from it. Property investment that requires a degree of renovation can lead to a revaluation of 65 per cent in the asking price once renovation is completed.

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To give you an example, we have a house in an exclusive area with many facilities. This property has suffered some deterioration in the last few years. Renovating this type of property allows the buyer to put it back on the market at a significantly higher price than a luxury property. This practice is more commonly seen in rural areas, especially historical properties that require updating, however, the renovation of old properties has gained popularity in large cities too.

If you take into account the average cost of a complete renovation of these houses, (somewhere between € 1,000 and € 1,500 per square metre), it is not difficult to see the potential of this strategy, especially at a time when the available number of luxury properties in the Spanish cities is limited. In addition, you should not just focus on the sale of the property. The rental potential both in the national and international market is opening new opportunities as this is a comfortable and cheaper way to live in a city for a certain period of time. 

The biggest real estate agencies such as E & V, see a tendency among buyers to select homes that require renovation. This is because buyers want homes that have not been lived in by anyone else. This is a cheaper way to get on the property ladder and at the same time, it provides a good return for investors as long as they know how to seize the moment.

Engel & Völkers

Génova, 27 - 5th floor
28004 Madrid
+34 91 277 45 00

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