Buying a flat to rent in Castelldefels: 175,000€ and 900€ monthly

175,000€ in bricks to dodge inflation

An entrepreneur with 100,000 euros sitting in a Santander account, which charged him 20 euros monthly for not moving the money, decided he had had enough. Instead of watching inflation eat away his balance, he bought a 65-square-meter apartment with a 20-square-meter terrace in Castelldefels, two minutes from the beach, for 175,000 euros. He rents it for 900 euros monthly. A forum user calculates that the operation, on paper, yields a gross 5.4% annually. The problem is everything that comes next.

The move makes sense. Money in the bank loses value, the stock market is not for everyone, and bricks, they say, always provide backing. But the fine print of this story includes property transfer tax (ITP), renovations, Technical Building Inspection (ITE), tenants, and an uncomfortable question: can the market sustain 900 euros monthly for a flat without an independent kitchen?

The calculation justifying the purchase

The buyer starts from a premise shared by most analyses: having cash parked is a luxury that inflation does not forgive. With 100,000 euros in the account and a bank charging fees for not moving them, the alternative of buying a property and renting it out appears as a refuge. The gross yield discussed in the operation is around 5.4% annually, implying recovering the investment in about 18 years, not counting taxes or potential rent increases.

The property has 65 square meters plus 20 of terrace, south, north, and east orientation, a parking space, and a storage room. The community fee is 60 euros monthly, and the building, from 1984, has already passed the Technical Building Inspection (ITE). The purchase price is 175,000 euros. The renovation cost less than 10,000, largely done by the owner himself: new electrical installation, doors, shower tray, shower screen, and second-hand sanitary ware. The result is rented for 900 euros, although the owner had initially thought of 800.

How much does the tax authority take in a property sale?

The Property Transfer Tax (ITP) takes a bite that many buyers underestimate. In the operation described, a forum user calculates that the buyer will have to set aside another 18,000 euros just to cover the ITP. It is a cost not listed in ads and in Catalonia can exceed 10% of the purchase price. Notary, registration, and, if there is a mortgage, associated fees add to this.

The real cost, therefore, is not 175,000. It is 175,000 plus taxes, plus renovation, plus the time the flat is empty while being prepared. In this case, the owner set a two-month deadline and met it: by the end of January, the apartment was ready and on the market. The ad on Idealista generated more than 25 contacts in a few hours.

The tenant who paid a year in advance

The first interested party was a 57-year-old separated woman with hospitality businesses, living 30 kilometers away, who wanted to be close to her children in Castelldefels. She offered to pay a year in advance. The owner rejected the offer. Finally, the property was rented for 900 euros monthly without haggling.

The tenant profile is a variable many investors overlook. In this case, the tenant is a person with their own economic activity, reducing the risk of default. But the shadow of default and illegal occupation looms over any rental operation. Some argue that current legislation protects tenants too much, leaving the owner in a vulnerable position. Other analyses suggest the problem is not the law, but the lack of rental housing supply.

The ITE and the real state of the building

The Technical Building Inspection (ITE) is mandatory in Catalonia for buildings of a certain age. In this case, the property is from 1984 and has already passed it. But the buyer discovered that years ago there was a fire in the ground floor, which was then a community leisure area, affecting part of the floor slab. Today, that area is a garage. It is the type of detail not shown in the ad and only revealed when asked.

The ITE is not an administrative whim. It detects structural problems, leaks, and deficiencies that can cost thousands of euros. In a 1984 building, over 40 years old, the inspection is mandatory and can lead to significant special assessments if pathologies are found. The buyer knew this and still bought.

The debate on rental prices

The operation has generated mixed opinions. Some consider 175,000 euros for an apartment in Castelldefels a bargain price, while others argue that for that money, you can only buy something shabby or a ground floor without orientation. The market reality in the area shows that one-bedroom apartments further from the beach have sold for over 200,000 euros.

Rental prices also raise eyebrows. Some analyses consider 900 euros monthly for a flat without an independent kitchen outrageous, while others recall that in premium areas of Barcelona and Madrid, prices are much higher. The underlying debate is whether the Spanish real estate market is in a bubble or simply reflects a structural shortage of housing.

The risk not shown in the numbers

Real estate investment has risks not appearing in the spreadsheet. The first is delinquency: a tenant who stops paying may take months to evict. The second is illegal occupation, a phenomenon that has grown in recent years. The third is regulation: a forum user notes that the European Union is considering banning the rental of energy-inefficient properties, which could affect older buildings.

The buyer in this story does not seem worried. He has a paying tenant, a renovated flat, and a yield that, even with taxes, exceeds what the bank gave him. But the question hanging in the air is whether the Spanish residential market can sustain these prices long-term or if, like in 2008, someone will be left with the bricks in hand.

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Some argue that buying property to rent is the only way to protect savings in a high-inflation environment. Other analyses suggest the market is overheated and current prices are unsustainable. The discussion remains open, and each specific operation is a small-scale experiment.