Opinion | Buying a House in Barcelona: Best Decision I Ever Made

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Maybe you were thinking about moving to Spain before the pandemic and its resulting economic uncertainties, or perhaps you already live here and were considering buying a home. Yes, we are living through a strange time, but now more than ever I would recommend taking the plunge. Buying a house in Barcelona was one of the best decisions I’ve ever made. 

I’ll be honest: the process of purchasing my house was complicated, but then again, so was the process of moving here. The multiple hoops I had to jump through in order to be legal to live and work here, the complications and loopholes that come with working freelance under Spanish law, learning a new language—all of these things were daunting. The challenges of getting a mortgage as a single individual with a non-traditional income in a foreign country and wading through the subsequent contracts and bureaucratic processes were no less intimidating.

But was it worth it? Completely, totally and without a doubt. Whoever said the best things in life are free has never enjoyed a Bloody Mary in the inflatable pool on my terrace on a hot Sunday summer morning… but I’m getting ahead of myself.

Why Buy?

When I bought my house, I’d already been renting apartments in the center of Barcelona for seven years. Even though the prospect of buying property was intimidating—the initial investment, the sensation of permanency that comes with buying property—the potential stability as well as the long-term savings attracted me. These are some of the most common reasons that anyone buys a home anywhere, I know, but in Barcelona’s peculiar property market, those two elements are particularly important and have had an incredible impact on my life here.

The Renter’s Market (a.k.a. The Fourth Circle of Hell)

Living in Barcelona as a renter is a volatile existence. The densely-populated city has skyrocketed in popularity over the past decade or two. It is not a renters’ market. When you make an appointment to look at a place for rent, it’s often you and several other people waiting in line to see the apartment at once, or in quick rotation. You feel like you’re at some kind of surreal auction. You submit your paperwork—identification, bank information, and so on—and hope that the apartment owners or their representatives choose you out of all the potential applicants. 

The landlords will take into account numerous aspects when deciding who to choose: whether or not you have pets, if you’re single or a couple, if you have kids, your nationality, your gender, your job. All of these things make you more or less attractive to the person renting the property, and you never know what it is they’re looking for. Demand for a place in this city is high, so landlords can afford to be choosy. And, as evicting a renter for nonpayment can take up to two years in the courts, many landlords are cautious to the point of paranoia.

In a standard rental contract you are often asked for two months’ rent as a deposit (even though it’s only legal to ask for one). In addition, some ask for another fee to cover “fixtures and appliances.” Some will ask for even more—I’ve heard stories of four, five, or six months’ rent required in extreme cases. No, it’s not legal, but potential renters are so busy just trying to find a place that they rarely report these kinds of abuses. In most cases, if you disagree with the terms of the contract, you’ll simply have to find another place to rent. On top of rent, sometimes you’ll also have to pay the taxes (listed as “IBI” in the rental ads) and a monthly community fee. And, if you go through one of the many agencies to find your apartment, you will need to pay the agency fee on signing the lease, which is 10% of an entire year’s rent. 

No Control

Once you finally find a place, you’ll still have no say whatsoever regarding major decisions that will affect your day-to-day existence. For example, when I rented a place in the Barri Gòtic, the landlord informed me that they would be renovating a neighboring apartment in the building. It was hell for three months, but that was ok, I’d been warned.

Then, over the next three years, they renovated every single apartment in the building, except the apartment of a little old lady who lived below me—who had a rent-controlled apartment and refused to move no matter how much they bullied her—as well as the façade of the entire building. I lived in a construction zone for years. I couldn’t do anything about it except move, as I didn’t own the building nor any part of it, and they had the right to do as they wanted with their property.

When the hot water heater in my apartment broke and flooded the apartment, the landlord wasn’t legally obligated to fix it and wasn't responsible for the damages to any of my belongings. Certain appliances are not considered to be a permanent part of the apartment itself according to standard rental contracts and have to be fixed or replaced by the renter. The water heater, the built-in refrigerator and microwave, and the washing machine that came with the apartment were examples of “appliances,” therefore my responsibility. 

If you’re thinking: “But are you really going to be able to take a replacement water heater with you when you move? Or do you just leave it there, even though you paid for it?” Exactly. 

Even things that the landlord is legally required to take care of—such as humidity in the ceiling or burned-out lights in the stairwell—are often left in a sorry state for months. I wish I could say that my experiences were isolated incidents, but it happens all the time.

Of course, there are exceptions. You may come across nice, honest people who are looking for a nice, honest tenant to live in their apartment. They fix what’s broken. They don’t try to take advantage, and neither of course, do you. But especially in popular neighborhoods where the demand for an affordable place to live is astronomically high, that kind of landlord is harder and harder to come by. 

Stability in Ownership

When I bought my house, it became my castle, and the sense of stability that it gave me is invaluable. There’s no crazy landlord or landlady who could make my life impossible or my home unlivable. If something breaks, it’s my responsibility to fix it but at least I get what I’m paying for and I know that it’s done properly. I can decide to fix things as cheaply as possible, or make sure that repairs are quality work. These fixes are an improvement to my property, which in itself is an investment that benefits me in the long run. 

I negotiated a fixed-rate mortgage, which means that I know exactly how much I’ll be paying for the next 30 years. The market may go up or down, exchange rates may change, and inflation will happen, but I will pay the exact same every month through 2048. For someone like me, who likes to plan, this gives me a sense of security and will save me money in the long run.

Savings, Investments and Playing the Long Game

Rent in Barcelona has gone up considerably since I moved here in 2011—between 2014 and 2019 it increased by over 50%—and it doesn’t show any sign of leveling out. Thanks to the influx of tourism for pleasure (cheap flights and cruise ships), business tourism (the Mobile World Congress, medical and tech conferences and other similar events), the city has become a global destination. While the coronavirus has slowed the market for the time being, Barcelona’s rental market remains one of the most expensive in Spain. 

Why? Restricted by the sea on one side and the mountains inland, the town of Hospitalet de Llobregat down the coast and Badalona up it, there’s nowhere for the city to go in order to grow. You can build “up” only to a point, as municipal regulations and protections for historic buildings limit vertical growth in multiple zones. By purchasing property in a city like this one, your investment is guaranteed to grow in value because the city itself is a finite, in-demand commodity.

If I wanted to rent a place like mine, I would not have been able to afford it. When you negotiate a mortgage, you often end up paying much less per month than you would if you were to rent the same property. Yes, there is an upfront investment in the down payment, but it’s an investment in something I own. I’m paying less per month than I would be paying in rent, and I can forecast my spending for the rest of my adult life. 

Due to numerous factors including the global economic downturn, interest rates are low right now. Banks are interested in loaning money to customers who can show that they are unlikely to default. If you can afford the down payment and lock in a low, fixed interest rate, you’ll avoid all kinds of upheavals for years to come. 

Feeling at Home

Speaking of upheavals, my house kept me sane during the quarantine. The patio with its abundance of plants, the natural light, and the fact that simply I love my house and am constantly making little changes to improve it made having to barricade myself inside it for three months much less of a trial. I was happy at home in spite of the stress and the madness since the state of emergency was declared, and it was satisfying working on the house: painting, fixing a crack in the wall or a broken tile. What better project to fill my time in quarantine than something that adds value to my investment? 

I can’t imagine being quarantined in my old apartment with its paper-thin walls, problematic appliances, lack of light, broken window lock, and the constant fear of my landlady deciding to take advantage of a bad situation. 

Your House, Your Decisions

Speaking of little fixes, having the choice to customize your home to fit your needs can drastically improve the quality of your life. In a city where the layout of many older apartments is a bit odd due to the habit of carving up large homes into multiple smaller flats by throwing up a few cheap dividing walls, the option to knock down a wall, install an air conditioning unit or add insulation against the cold is golden. 

I renovated a little upstairs space and made it into my office so that I can work comfortably from home. I painted the roof with reflective coating so it wouldn’t be so hot in the summer. I hung art and guitars on the walls. These little changes significantly improve my day-to-day, and I couldn’t do any of them if I didn’t own the property. 

This sense of agency also applies to your immediate external surroundings if you live in an apartment rather than a house. You’ll belong to the comunitat de veïns, or homeowner’s association. This means you have a voice when it comes to making decisions that affect the entire building, like whether or not to hire a doorman or install an elevator. If you are renting, you don’t have a voice. Your landlord decides what happens to your building, and does not always take your interests into account.

In my experience, the relationship with your neighbors also tends to be different when you own the property. In a city that has experienced such a massive influx of tourists and short-term residents, people tend to treat you differently when they see you’re in it for the long haul. 

Now You Have a Resource

Your home is also a resource. If needed, it can provide you with an added source of income. I have a spare room that I use for guests, but I could rent it out if I chose to. This could mean short term rentals to students or travelers, or a long-term rental to a roommate. I could even rent out my entire house for a week, for the summer, or for a year if I chose to. In most rental apartments, there is no subletting allowed. 

If I ever decide to leave Barcelona for a while, for good, or even just decide to move on to another property within the city, I could rent or sell my place. It’s comforting to know that I have options in these unsteady economic times. 

During the pandemic, many banks have also offered full or partial moratoriums on mortgages. While this is not a source of income per se, it has been a godsend to temporarily have my mortgage payments cut in half, as my income has also been reduced to less than half since March. If I were renting, that option wouldn’t have been available.

Ready to Buy? Assemble Your Team First!

If you do decide to take the plunge and buy, it’s important to surround yourself with people who can help you understand the logistics of the purchase.

There are multiple ways to buy: direct-to-owner, via the owner’s agent, or each party working with an agency. I had a few bad experiences with real estate agents from a big firm, and I was recommended to speak to an independent relocation company that deals with both renting and buying called VIVABCN.* They were amazing. 

Their commission was extremely reasonable, their approach was personal and they were honest with me. They helped me figure out how to make an offer with terms that benefited me but also appealed to the seller, so that I was able to win the bid on the property I wanted. They helped me to understand the steps along the way, from making the offer to closing on the property. The nuances of the process are different in Spain than they are in my home country, so it was a relief to feel like I wasn’t alone.

When it came time to negotiate the mortgage, I spoke to several mortgage brokers and ended up hiring Ferco Gestión. They made the complex negotiations with the bank. As a single individual with odd income streams linked to multiple nationalities, it would have been difficult to get a mortgage in the first place and I definitely wouldn’t have gotten one on such good terms on my own. The existing relationships that these brokers have with the banks made all the difference. It’s worth it to spend a bit of money on this kind of service in order to save a whole lot more money in the long term. 

Now, two years later, my contact Segio Seco at Ferco was also a huge help when I was trying and failing to negotiate a moratorium during the beginning of the coronavirus pandemic. Sergio and Esther Lorente, an extremely competent lawyer who specializes in banking, saved me. If I ever decide to sell, I already know who to go to for assistance.

What to Look for before You Make the Offer

Once you’ve got your team in place and you’re ready to look at properties, here are a few tips I picked up during my property-buying adventure.

Study the area and research the prices of similar properties before making an offer. Note the property’s proximity to schools, grocery stores, public transport, parks—not just for your own convenience, but also because these things affect the property’s appraisal value. The most that Spanish banks will offer is 80% of the official appraisal, which may not be 80% of the offer you’ve made. 

Check for obvious structural and installation issues and factor any immediate remodeling needs into your budget. If you’re looking at an apartment and not an individual house, check out the façade of the building and ask if there are any plans to remodel it or any part of the inside of the building in the near future. Ask about monthly community fees. Owners are liable for their share of expenses for doormen, cleaning staff and maintenance. Also inquire if there have been any recent issues with okupas (squatters) in the building or in the neighborhood.

Ask your team what taxes and fees you are responsible for both during the initial purchase as well as afterwards. The initial taxes usually amount to around 20% of the property value, making your initial payment 35% to 40%. Check the possible differences in tax rates if this is your primary versus your secondary residence. There is a yearly property tax in Spain called the IBI, but for my house it’s quite low. There is homeowner’s insurance to consider too, but it’s extremely affordable when compared to prices for similar insurance in the US. 

Jumping In

Ask your real estate agent for advice on how to make the offer, and what to include in the initial arras (non-refundable deposit contract), which will come before signing the deed on the property. For example, what happens if the previous owners don’t vacate the property on the agreed-upon date? These are situations with which you may have no experience, but agencies like VIVABCN have dealt with dozens of times.

When it comes to negotiating the mortgage, decide if you want a fixed or flexible interest rate. A variable rate is tied to the Euribor, which may rise or fall in the coming years. Most banks will also offer the option of a “mixed” mortgage, which means that your interest rate is fixed for a certain number of years and then becomes a variable rate. Ask your broker if they can negotiate the elimination penalties for early amortization or if you choose to transfer the mortgage to another financial entity.

Above all, ask lots of questions. Ask your team, ask your friends who’ve bought homes, and don’t sign anything unless you understand it completely. 

Good Luck! 

The process of purchasing my home took a big bite out of my savings and it was stressful, I won’t lie. The remodeling was equally challenging. But two years later, I’m enjoying a Bloody Mary in my inflatable pool on my patio, and I’m grateful every single day for having made the choice to buy this house. I’m content in the knowledge that, come what may, I have a handle on my little corner of the universe.

*VIVABCN is a client of Barcelona Metropolitan.