Real Estate

There are 3 posts filed in Real Estate (this is page 1 of 1).

Short term rental business case in Valencia suburbs

I was planning to build second house in Valencia for myself, but my lifestyle has changed and I currently prefer living in condominium, where I have outdoor and indoor swimming pool, gym, sauna, padel courts, 24×7 security and most important my kids have many friends to play in a safe environment. As I had a plot and a project ready, I started investigating what could I do with that. My options are:

  • Build to sell (not the best idea as the return on investment is low)
  • Build to rent – I could generate about 7-8% yield, but the demand might drop after the Ukraine wins the war – Also the loans to build the house are quite expensive now so the return is little
  • Sell the land
  • Build to rent on AirBNB – That idea came when I saw AirDNA data on townhouse in Burjassot

Burjassot townhouse rental:

3 Bedroom townhouse in Burjassot with a pool. This is the closest city to Valencia City. It has metro and tram line close by. In addition it is near Sorolla Congress Hall. Airdna says it has 60% occupancy at 410 euros on average per night.

I could definitely make a better quality house, just my location is not that close to the city/metro/tram. This is what AirDNA rentalizer gave as an estimate for my location:

Examples of Airbnb revenue in Valencia suburbs

5 bedroom Villa in Godella. 58% occupancy at 297 euros per night on average

#2 in Godella

Paterna / La Canada zone where I am considering building a 4 bedroom/4bathroom villa for AirBNB rentals. Interesting that the second villa is only listed on VRBO. The First villa that generates 89k / year (according to AirDNA) has 6 bedrooms and can accomodate 14 people. Charges 512 euros on average per night. Has a tennis court.

58k Arquitect Villa

p.s. You can invest in Airbnb rentals over InRento

Building a house in Valencia Spain 2020/2021

First, I think that renting is always better than buying. Especially in Spain, where you pay 10-12% buyers fee. So if the rent is 4% – so you can rent for 3 years just of the buyers fee. Secondly your family situation changes and you have more flexibility renting. And thirdly changing places is fun.

The reason why we have started building a house in Valencia, Spain is that we wanted a house next to kids school and there was nothing decent to rent. And the purchase prices seemed ridiculous of the houses that we liked.

So the first thing of building a house – choosing a location was obvious and those are places where most best schools in Valencia are:

  • Torre Conill – lots of new houses. Some plots on the golf course. No trees.
  • Mas Camarena – no plots available at a market price. At the time there were only one plot at 600 euros per squaremeter.
  • Campolivar – big plots (that can not be devided) the plot prices start at 400k
  • La Canada – this is the one we have chosen. At a given time you could buy 500 square meters at around 250 euros per square meter

Architects

The architects qoute different prices from 7.000 to 20.000 for a single family house. The price is proportional to the english level. I an recommend this company.

Building permits

Building permits take approximately 8 months – but there is new law that lets outsource the work townhall to private company. With up to 2k euros you can get a building permit in less than 3 months.

Construction

There are basically two ways to proceed with construction:

A. hire a general contactor. Advantages are that you do nothing, get guarantees. On the other hand you pay 8-20% on this. And as you are paying % – the contractor has incentive to spend more.

B. Hire individual companies. You save money. You have a lot of work

We have chosen hiring 11 companies to do:

  • Land works (movimientos de tierra)
  • foundation and structure (estructura + cimentaciones)
  • electricity
  • plumbing (fontanero)
  • bricks (albaneria) (also put the tiles)
  • windows (ventanas)
  • interior walls (pladur)
  • painting (pintura)
  • parquet floor
  • pool (piscina)
  • garden (jardinero)

Mistakes on building a house

Brickowner vs Housers equity

I believe the lean P2P companies will eat the banks in the near future. I commited 5k investment in equity of Brickowner and now thinking about getting the equity in Housers

In Brickowner i invested as a client and in Housers i have just made a deposit, but didn’t choose any property yet. Even though they have 60 employees their customer support sucks and the company itself is not clear for me. Who are they and what they do? Whom the projects belong to? Who is the lemonway (deposit is made to them)? What is the purpose of 2 subsidiaries which they own at 64% and 70%?

HousersBrickownerEstateGuru
2017 October raising850k @ 44M 120k @ 2,5Mtotal raised 117k
Loans issued up to date *M320,2730
ProsPan EuropeanLean companyLean and transparent company
Cons60 employeesFew properties for investorsServing 3 small markets

Finally i decide to skip investing in Housers equity because there are too many unanswered question to which they hide “For confidentality issues” we can not answer you….

 

Property Partners
March 2016 – Property Partner raised a £15.9m Series B in March 2016. Valuation: £60m pre-money
⎝ Run rate of aprox. 2.4 million pounds monthly at the time of investment
o https://www.propertypartner.co/
o https://resources.propertypartner.co/
Other relevant data
⎝ Actual run rate of 2.7 million pounds in August 2017
o https://www.propertypartner.co/
o https://resources.propertypartner.co/
⎝ This is done with a leverage of almost 50% in most of their projects
⎝ Just one country
Time since company being incorporated
⎝ Funded in 28 May 2014 – more time to get to the 2-5 mn. mark

Exporo
May 2017: Capital Round of €8 million at €59 million pre-money
⎝ Run rate at the time of the round of €3.4 m – €4m
o (https://www.gruenderszene.de/allgemein/exporo-erhaelt-weitere-acht-millionen)
⎝ Just one country
⎝ Funded in 2013 – more than to achieve the 2.5 mn. Mark

The House Crowd
⎝ Actual Run rate of 2.5 million pounds,
o In 20 July 2017 -The House Crowd has raised £15m in the past six months, taking its total fundraising to date to £50m.
♣ http://www.propertyweek.com/finance/the-house-crowd-hits-%C2%A350m-milestone/5090523.article
⎝ Just one country
⎝ Funded in 29 December 2011 – more than to achieve the 2.5 mn. mark

Housers
⎝ Actual run rate of approx. 2.5 million euros
⎝ Presence in 1 country plus 2 additional (starting), 95% of investment comes only from Spain. First of the previous offering properties in 3 countries
⎝ Funded in 2015 (latest player – faster growth)- Less months to get to the €2.5 m. mark
⎝ Country with lower purchasing power (less consumption and investment per habitant)

EstateGuru raise on 2020 April at a 28M pre-money valutation on Seedrs