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Spain is one of the most desirable places in Europe to invest in property. The Spanish real estate market offers favorable investment conditions for foreigners and expatriates due to its location, safety, rich history, and developed infrastructure. However, not all investors want to buy property in Spain and invest actively, as the peculiarities of the Spanish real estate market mean that restrictions can be imposed on foreigners. In addition, there are property scams, high capital tax gains, and market swings to consider. Therefore, this post examines two passive investment possibilities to buy property in Spain.

#1. Invest in a Spanish REIT

If you are versed in investing, you will undoubtedly have heard about REITs- a financial investment vehicle that originated in the 60s in the USA. REITs have become a popular way to invest in real estate passively due to the nominal sums required for entry and the liquidity they offer. But did you know that Spain has its own version known as SOCIMIs (Sociedades Anónimas Cotizadas de Inversión Inmobiliaria)? Let’s take a look at what they entail.

What is a SOCIMI?

Public limited corporations, or SOCIMI for short, are traded on the continuous market, Spain’s alternative stock market, or MaB as it is known in English. The SOCIMI’s goal is to buy property in Spain, advertise, and renovate urban assets (such as offices, apartments, retail stores, and logistics centers) for rental purposes or contribute to another SOCIMI’s capital.

Despite being regulated for the first time in Spain in 2009, SOCIMI did not become a significant real estate investment vehicle until 2013. However, 19 SOCIMI are now traded in Spain, with four listed on the primary market and 15 on the secondary market. They must have a minimum share capital of 5 million euros, and real estate in Spain designated for rental purposes must make up at least 80% of its assets. However, SOCIMI must release a portion of their rental income (at least 80% of rental income and 50% of gains from disposals) as dividends. Significant tax reductions on earnings and transaction costs help shareholders to get the most out of their investments.

Can I Own Property in Spain with a SOCIMI?

When someone invests in a SOCIMI, they are actually purchasing stocks that correspond to a real estate asset in Spain (whether it be an apartment, parking space, or industrial building, for example). So, we can say you have “pooled ownership” of property in Spain. However, you will not hold any title deeds. Still, all the processes of finding a tenant, maintaining the asset, monitoring payments and non-payments, etc., are handled by the SOCIMI and the asset’s management company. As an investor, you solely reap the rewards of the income from the property in Spain. You are spared any inconveniences associated with investing in real estate assets in the “traditional” manner.

Pros and Cons of Investing in SOCIMIs

A SOCIMI has higher operating expenses than certain other types of funds on the downside, but if the fund is sizable enough, the tax benefit more than makes up for this. In addition, there are no formal limitations on the transfer of shares and no minimum investment requirement. Furthermore, SOCIMIs provide convenience for investors because they provide a platform for investing that is not too complicated. Finally, Spanish REITs act as a liquid investment vehicle for diversifying portfolios. Given their fluid nature, low entry requirements and short-term investment horizons, REITs are less financially rewarding than other investment options. 

#2. Buy Property in Spain for Agriculture

Suppose you want to make a low-volatility investment in property in Spain, unaffected by economic situations and have a long-term steady, reliable, and constant annual income. In that case, consider hedging your bets with almond-producing property in Spain offered by Agro Invest Spain as a safe approach to preserve your capital and earn generous passive income. 

Spain is one of the most tempting nations in Europe for agribusiness investments. The Mediterranean nation has some of the most productive agricultural lands in the world, and buying property in Spain for agriculture investment products like almonds has multiple benefits. Almond is one of the most popular sources of plant-based protein today, and there is a rising demand from both consumers and investors. The finest aspect of this investment is that it requires no prior knowledge of growing almond crops. We relieve you of the trouble and work diligently to maintain your land with the top agricultural specialists in the nation.

Pros and Cons of Agricultural Property in Spain

Investments in agricultural property are long-term investments, which could be considered a pro or a con, depending on your investment goals. Waiting for the land to appreciate involves patience and a long-term investment horizon. However, with the almond investment model at Agro Invest Spain, you will receive a high return on investment (ROI) because they are a high-value crop, and you will receive annual payments. So you actually have the best of both worlds with long-term appreciation and short-term revenue. In addition, your annual returns will increase over time as the trees mature and produce higher yields. Furthermore, your long-term appreciation value rises as the trees are a valuable commodity.  

With our model, you get the same benefits of professional property management as you would with a SOCIMI but with a two-fold income stream bonus. The first is annual income from the almond crop sales- comparable to the dividends paid by a SOCIMI in terms of cash flow. In addition, however, you also secure a property in Spain with unlimited time ownership.

The Best Path for a Passive Investment in Spain 

Although investing in agriculture may be a novel idea to some investors who are used to more conventional assets, this asset class is gaining popularity. Now is a great time to invest in a growing real estate asset that is very profitable for the client and the world’s food supply. This has been made possible by firms who invest in agriculture, such as Agro Invest Spain. Our managed farmland concept provides an unrivaled opportunity for those looking to secure property in Spain and enter the lucrative agriculture industry. Investors no longer have to start as farmers to operate a successful, hassle-free farm investment business. Contact our advisors now to secure your agricultural property in Spain today.

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