Spain is becoming a reference for property investors willing to buy affordable properties. To find a property investment at a low price is a must. The option Buy To Let in specific areas is a strong one. The Spanish Brick has analized in this article the potential of an area in Madrid centre: Lavapies.
In the heart of Madrid, Lavapies is a cosmopolitan area with plenty of amenities, clubs, restaurants and small retailers. There are two different points of view about Lavapies: either you love it or you will never live there. The fact is that the population density is very high and about 50% of the population is not Spaniard.
If we had to compare Lavapies with an area of London, I would choose Bethnal Green.
In both areas, immigration is high, they are full of retailers, they are low-badged areas and both of them are a legacy of the roots of the cities. Whereas Bethnal Green reflects its London Cockney appeal, Lavapiés is a legacy of the traditional culture and architecture of Madrid.
Transport and amenities
Lavapies is a very handy area with all the kind of shops and amenities that residents need on a daily basis.
Regarding transport, the area is well covered by four main underground stations: Lavapies, La latina, Tirso de Molina and Antón Marín. From this perspective, the area is ideal for commuters.
Potential rental yield
The rental market in Lavapies is very competitive and we estimate that a studio flat will be easily rentable for €400/month (5.3% yield) up to €500/month (6.6% yield). We have estimated the rental yield using an assumption that the selling price will be €90k. There are affordable options.
Lavapies is a populated area in Madrid and the rental demand for medium-low budget properties is always high. Students, young professionals and couples are a solid potential tenancy market in Lavapies.
Property prices’ trend since the crisis started
Average property price fluctuation in the borough of Embajadores, where Lavapiés belongs was (compared to the previous year): +3.3% (2007) -13.9% (2008) -4.8% (2009) and -3.1% (2010).
We estimate that a €90 K studio flat in Lavapiés is an interesting option for investors. Try to negotiate price and you may get a bargain. RECEIVE THE INVESTMENT REPORT
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