Rent of housing in Spain
Written by Contact Us

Is your rented home profitable ?, make numbers

Do you know how the profitability of your rental property is calculated? Enter numbers if you have a rented house or if you plan to buy a flat as an investment. In our collaboration in Invest You have the keys that will let you know. That rAvailability can be obtained via rent or revaluation.

But everything is not so easy. A rented flat, (except if it comes from inheritance and also has its expenses), usually has an initial investment, periodic expenses and a monthly income. With these wickers you can calculate what benefits you get.

To calculate the profitability of a rental house, you must take into account these variables: investment, periodic and punctual expenses and monthly income. A good analysis and a good choice are the perfect combination to obtain an adequate return. And it's possible.

Gross and net profitability

And the simple rule: divide the monthly income between the total cost of the property. The result is the gross profitability. Butwhat is the net? To the total income it is necessary to subtract all the expenses that the property entails: community quotas, taxes, insurance or some expenses of maintenance or reforms, etc. Without forgetting the mortgage, if it had it.

The net result is what you get in your pocket, but then comes Estate. Revenue from rentals increases the tax base in the income tax. And although when it comes to housing, a good part is exempt, some taxes have to be paid for this income.

Profitability by revaluation

It is another option to have benefits. But, first buy, then sell and then subtract taxes and expenses from the sale. It is good to do the calculations well to really know what you are getting. The difference between buying and selling must be important.

We invite you to read our colaboración in Invertia where we have assumptions of rent and sale. You can see what profitability you get or you can get if you buy as an investment.

And in this last point remember that not everything is worth. Before buying it is good to do an analysis, as we already have in another post: aspects that must be taken into account.


Information produced by FGold Real Estate Consultants

And if you are looking for a house, do not miss our wide range of properties in Foroprovivienda

Image of Madrid: @crdeprada

Tips before renting
Written by Contact Us

How much is the payment of AJD tax on a mortgage?

After Royal Decree approved by the Government, The AJD Tax on a mortgage will be paid by the financial entities. Although this payment, which responds to Tax on Documented Legal Acts, will ultimately affect the client. Now we will have to see to what extent financial entities increase commissions or not…

But, how much does it cost and how much is the client saved? Since Contact Us we tell you about it and we clarify the costs of setting up a mortgage, regardless of this tax. These are the most relevant:
  • We begin with the opening commission, Who decides each bank.
  • To this we add, the appraisal expenses that depend on the value of the home.
  • They follow him Notary fees and registration.
  • Also the expenses of agency

And finally, the Tax on Documented Legal Acts (IAJD), which is a percentage of the sum of the mortgage liabilities. And it depends on the location of the property. The differences are important, since they oscillate between the 0,40 and the 1,50%.

As you can see this tax depends on each Autonomous Community and in this link Idealist you can see it.

Taking into account these data, we have gone to a simulator of a financial institution to see all disbursements when hiring a mortgage and how it affects the tax. The chosen example is a mortgage loan of 160.000 euros, the 80% of a house appraised in 200.000 euros and with an opening fee of 1%.

  • En Madrid, total mortgage expenses: 5.236,72 euros. The IAJD: 1.572 euros in this case.
  • The next assumption is in Álava, the total expenses of the mortgage constitution add 4.712,72 euros, but here it is lower (1.048 euros).
  • And a third example, Sevilla. The total cost of establishing a mortgage amounts to 6.808,72 euros, and given that the tax is one of the highest: 3.144 euros.

If we subtract the part of the tax, the figure drops considerably

In our collaboration with Invertia you can see all the itemized assumptions and the general expenses of the constitution of a mortgage.


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