You would love to live in Madrid.
In fact, you are even considering buying a property in Madrid.
Do you feel overwhelmed with all the information available, and do not know where to start ?
Then I will give you now the 3 essential steps to start with:
- Prepare your finances,
- design your lifestyle
- Do the reality check.
I keep it as simple and realistic as possible. If you need more details or have questions along the way, follow the links, search on this website or just send me an email with your questions.
1. Prepare your finances
The first step of all, is the less romantic: ensure that you will have the money to support you dream. Planning and preparation are key to a successful purchase and relocation.
If you need a mortgage, you can either request one from a bank in your country of origin with branches in Spain, or request a non-resident mortgage to a Spanish bank.
Given the financial situation in Spain, you will have less difficulties obtaining a mortgage from a bank of your country of origin in Euro. I do not recommend multi-currency mortgages. You will be looking at the rates for the years to come, on top of the Euribor.
How much can you afford ?
For such a purchase, I recommend you go safe and standard: a 20 to 30% down payment, 30 years, and a housing-to-gross-income ratio of around 25%.
The real cost of buying
Be careful to include all costs when calculating your expenses.
To calculate the monthly housing costs, do not forget to add to mortgage payments, 15 to 20 % just to give you a rough idea.
Indeed, you need to include:
- Madrid Property Tax or IBI (Impuesto de Bienes Inmuebles): 0,60% – 0,80 % every year of the value of the property,
- House insurance: around 200 € a year.
To calculate the final amount to pay when buying the property, you have to add on top of the property price 10 to 15 % in buying costs.
Finally, you should give yourself a margin for maintenance, upgrades and furniture.
You should now have a final all-included maximum property price you can afford.
2. Design your lifestyle
Do you really know the kind of property you want ? In which neighborhood ?
Well, in most cases, we first fall in love with one neighborhood and forget to take into account less obvious options, which may well be a better neighborhood in the end !
Instead of listing your wants and needs, write down your typical week you are living right now.
What do you like to do ? What is the most important thing for you right now in your home and neighborhood ?
And now, ask yourself the reason you want to move to Madrid that you do not have where you live now”"”"”cette phrase est trop longue et pas claire!! . Include it in your typical week schedule.
Sum up this typical week, and read our presentation of Madrid neighborhoods to see which one will enable you to live your ideal week .
Also think of the essentials your Madrid apartment needs so you can live your ideal week. What do you absolutely need to be happy ?
You should now have a list of interesting neighborhoods and essential characteristics your apartment should have.
The next part is where the rubber hits the road.
3. The reality check
The first check is to divide your maximum property price by the number of m2 you need.
If you do not know how many m2 you need, a first guess is 40 m2 + 30m2 per room. For instance, for a 2 bedroom apartment, 100 m2 is a good start.
You will then get a price per m2. This will allow us to see what kind of neighborhoods you can afford:
- 5000 € / m2 and above: the sky is your limit. The most exclusive neighborhoods like Salamanca, newly built apartments in the centre and penthouses are within your budget.
- 3000 – 5000 € / m2 : you can afford quality apartments in the centre of Madrid, in Chamberi, but not the most modern, and it might be harder to buy in the most exclusive neighborhoods. You can afford new build several stops from the centre, with terraces for instance.
3000 € / m2 is the average in Madrid Capital, which is the zone where you have metro stops more or less .
- 2000 – 3000 € / 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.
With these first 3 elements (budget, lifestyle and reality check), you are now able to take your first decisions, and above all, read, research and prepare.
Do send me an email if you want some help to get as much of the lifestyle you love for the budget you have.
Pierre – Moving2Madrid