This is a sample of the first consultation and steps taken by The Spanish Brick in order to start the search for a current client. Even though we already worked previously with two clients in Barcelona, these were buy-to-refurbish and flip investments. We did not go in depth into short-term lets for holidays.
The client wanted to buy a cozy apartment with a balcony in the Borne area- Ciutat Vella (which is the most fashionable borough in the old town) where he could enjoy a coffee while relaxing and enjoying Barna.
His plan was to generate income from short-term holiday lets when he was not in Barcelona.
Previous online research
He had already done some online research and he sent us three apartments that he found via internet from local agents. He contacted The Spanish Brick in order to know our opinion about those apartment and assess his real options within a budget of 250K.
In terms of properties in Barcelona, and in the area where the client was interested in buying, we had seen good opportunities with real potential. If you want an apartment in Barcelona there are beautiful opportunities. I have even seen one in the Born area for €96k. It needs to be refurbished but that is the way you can buy cheap and increase value. To be in the property business, even for holiday-letting, this is the way to start doing business.
The first consultation that we did was to check the tax implications for him in order to assess how much of a margin he could get.
Calling to Spain to start the previous diligence
We called the Barcelona Council in Ciutat Vella today, which is the district where the areas (boroughs) that you have marked as interesting for you are.
To be able to run a property for holiday letting we need a license. Currently the council is issuing them in a very restricted way. That is the way they control the market and also is the way the local authorities stop full time residents from complaining about noisy temporary neighbours.
The client had three options:
- Getting a newly issued license from the council, which could take ages. This was assumed to be an impossible mission.
- To buy a license from a current holder giving up letting his apartment short term. This could be costly. A local agent told us that it could cost several thousands. Then, as I mentioned in my previous email….it all depends on the property price.
- Another option for him was to buy an apartment that already had the license.. but apartments like this are not very common so we would need to really chase one down.
The dodgy alternative was to do what some locals are doing by running holiday lettings and not declaring them… but doing that is risky because the neighbours tend to report it to the council and if there is not a license the fine can be serious.
This is the number of licenses for touristic apartments in the top 4 districts which we got from the local authorities:
L’Eixample: 2,586 / Sant Martí: 660 / Gracia: 626 / Ciutat Vella: 617
Not everything is possible, but there are good alternatives
In the end, given the difficulty of running a short-let apartment in Barcelona, the client decided to give up. He was glad to have contacted us because any local agent would just sell the property to him and he would not be able to legally let it out for the short-term.
He has referred two more clients to us since then and now the client is investing in property in Valencia with The Spanish Brick for short-term lets.