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Case study: a profitable Buy-to-Rent investment in Madrid

Agnes Csomos |Real Estate Personal Shopper in Madrid

Around mid 2020 we were contacted by a successful young professional called Martin, who wanted to invest part of his savings in an apartment, rent it out and thus get a return on his investment. However, he was having the same problem as almost everyone in his situation: lack of time and lack of experience with real estate purchases.

In this case study we are going to tell you about the whole process, and what his Real Estate Personal Shopper in Madrid, Agnes Csomos, did to help him make a safe and profitable purchase.

What was Martin looking for?

A.C: Martin was looking for a good ROI, but was also concerned about investing in a safe value with a good potential for appreciation. He wanted his investment to be located in a neighbourhood that he knew well and had easy access to, and above all he wanted a type of property that would be easily rentable to expats, temporarily displaced workers or postgrad students. In other words, he was looking for a good balance between profitability and a safe value.

Martin, why did you decide to seek help with your real estate investment?

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M: First of all, I don't know much about the real estate market and I was dreading the whole process. In addition, I am neither from Madrid nor from Spain, so I do not know all the neighbourhoods, projects and potential developments in the city, which I think is essential to buy well. I needed guidance and reassurance.

Second, I was looking for a good deal, and I knew that going through a real estate personal shopper would give me access to sometimes exclusive deals, sometimes before everyone else.

Finally, I also had a time limitation: I had a maximum of 3 months to buy, so I needed an expert and someone to search full time.

Why did you choose Agnes Csomos to help you with your investment?

M: After a long initial call with Agnes, I was convinced by her remarks, explanations, and knowledge of the market.

She helped me define and clarify my real estate project, which was a rental investment project and therefore there were many parameters to take into account. The fact that I could speak in my native French with her was also a bonus.

Steps taken by Agnes Csomos to find what the client needed

A.C: The first thing we did was to determine the target areas and the type of property to purchase. Considering the client’s requirement of investing in a relatively central neighbourhood, we focused on Tetuán and Arganzuela, both with high potential for appreciation but still within the M30, thus easily accessible and attractive for the type of tenants Martin wanted to have.

Also, before starting the actual search, we analysed Martin’s finances with help from one of our mortgage partners, to know what mortgage conditions he could get and what was the maximum amount he would be allowed to borrow. This way we could determine the maximum budget for the purchase.

During the search process, we considered 2 to 3 bedroom apartments, both refurbished and to-be-renovated, focusing on good location within the neighbourhoods for easy renting.

We analysed more than 100 properties on sale, personally visited and analysed a score in more detail, and together with Martin we visited 4 in total.

As the searched progressed, we started focusing more and more on recently renovated apartments, not wanting to face the uncertainty of a renovation in the middle of the COVID pandemic.

How was the real estate transaction carried out?

A.C: The apartment Martin liked best was a newly renovated and fully furnished apartment in Bellas Vistas neighbourhood, with very high demand for quality rental apartments from health-sector workers in the nearby hospital area, and students from the universities also in the area.

It was an apartment with good intrinsic qualities: on a fifth floor in a building with an elevator, it was very right and had three bedrooms, two bathrooms and a balcony.

We did a full due diligence to give Martin reassurance and ascertain that it was a good, safe purchase. We reviewed the legal documentation, we spoke with the HOA president and some neighbours, and our architect visited the apartment and wrote a technical report.

The only doubt that remained was the time it would take to find the right tenants after the purchase, because due to the pandemic situation the rental market had undergone changes.

To eliminate this unknown factor from the equation, we negotiated with the selling party that they themselves would look for tenants with a predetermined rental price and would deliver the apartment to us with an already signed contract. Thus the investment would start generating a profit from day one.

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Martin, what has been the most valuable for you in the service?

M: Several things, actually: the help to define and clarify the whole project; all the research work and visits made; the advice and opinions about the apartments with total objectivity; the feeling of being represented by an expert from start to finish.

Did the service provided by Agnes meet your expectations?

M: Yes, absolutely. Agnes accompanied me throughout the project and was always available. She is not just a real estate personal shopper or "property hunter", she is more than that. She helped me eliminate and solve all the problems and obstacles that one inevitably encounters during a purchase and this allowed me to focus more on project itself: the specific calculations and decisions. And as for the purchase, I am very happy because it is exactly the type of investment and profitability that I was looking for.

Would you hire the service again or would you recommend it to other people?

M: Yes of course, and I already recommend it to all my friends and acquaintances who want to buy in Spain.

Undoubtedly, satisfied clients are the best way to showcase what we do and how we do it. We are very pleased that Martin was so happy with his real estate investment.

If you are thinking of buying a home in Madrid, or want to make a profitable investment, we can help you buy with peace of mind. It is vitally important to be accompanied by a professional who will be on your side only, to advise you and help you make the best decisions.

WE ARE WAITING FOR YOU!

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