M2M Best property investment return case study: 500-850k€
Read this article to learn the type of return you can expect to receive on your Madrid property investment. You will see two case studies from current clients to see how working with Moving2Madrid will give you a very good rental yield on your investment property.
You will see detailed information, including photos, on the following two case studies:
- Historic first floor, light-filled apartment situated on a narrow street
- Apartment with premium characteristics on a border street
Summary: If you buy a property in the 500-850k€ range, you can expect to achieve a return far above the Madrid market average of 4.6%. This is done by employing the Moving2Madrid strategy: find an apartment that other buyers would view as “defective,” then mitigate these defects. The investor in Case Study #1 achieves a 6.2% rental yield. The investor in Case Study #2 achieves a 5.5% rental yield.
1–Historic first floor, light-filled apartment on a narrow street
This property is located on Calle San Nicolas. It has two balconies with views of the oldest church in Madrid, San Nicolas. This historic church dates back to 1202. Although it is a first floor apartment, which are considered less desirable than apartments on higher floors, it has seven windows. That, and its historic location, allows it to achieve an excellent rental yield.
This 100 m2 apartment was purchased for 464,000€. It has four bedrooms, two full sized bathrooms and seven windows. It is located on the first floor, on the exterior. The building has an elevator.
Additonal closing costs on this apartment were 64,818€.
The refurbishment costs for this apartment were 100,000€.
The total cost of this apartment, including the refurbishment and closing costs, was 628,818€.
The property investment return
Its monthly average rental revenue is 4,467€, which equates to 53,600€ per annum.
The property costs 14,532€ per year to maintain. Property management fees are 10,720€ per year. Community fees are 1,020€, gas, electricity and internet amount to 2,092€. The balance goes towards home insurance and taxes.
The property’s pre-tax return is currently 39,068€, which gives a rental yield of 6.2%. This is well above the Madrid market average of 4%
Do you want to achieve a similar rental yield on your Madrid property purchase? If so, contact us today to learn how.
2–Apartment with premium characteristics on a border street
This property is located on the border of Sol and Lavapiés. Sol is arguably the best neighborhood for short-term rentals in Madrid and property is expensive: it was 5,263€/m2 at the end of 2018. Lavapiés, alough rated the Coolest Neighborhood in the World by TimeOut magazine, is still an up and coming neighborhood. Property in this neighborhood cost 4,239€/m2 at the end of 2018: a 20% discount to that in neighboring Sol. Although this property is technically located in Lavapiés, its close proximity to Sol allows it to achieve a very good rental yield.
This 159 m2 apartment was purchased for 641,250€. It has five bedrooms, three bathrooms and eleven windows. It is located on the fourth floor, on the exterior. The building has an elevator.
Additonal closing costs on this apartment were 108,854€.
The refurbishment costs for this apartment were 120,000€.
The total cost of this apartment, including the refurbishment and closing costs, was 850,104€.
The property investment return
Its monthly average rental revenue is 5,250€, which equates to 63,000€ per annum.
The property costs 16,462€ per year to maintain. Property management fees are 12,600€ per year. Community fees are 1,020€, electricty, gas and internet fees sum to 2,092€ and the rest of the yearly maintenance costs go to taxes and home insurance.
The property’s total before-tax return is currently 46,538€, which gives a very good rental yield of 5.5%. This easily surpasses the Madrid market average of 4.6%
Our case studies demonstrates that Moving2Madrid clients earn returns that far surpass Madrid market averages. We have clients that have purchased apartments in the 500-850k€ range with rental yields in the 5.5%-6.2% range- well above the Madrid average rental yield of 4.6%.
Do you want to achieve a similar rental yield on your Madrid property purchase? If so, arrange a FREE CONSULTATION to get started today.