You are currently viewing How to buy property in Madrid based on the amount of savings you can invest

How to buy property in Madrid based on the amount of savings you can invest

The big question that I am going to try to answer in this post is how to buy property in Madrid based on the amount of savings you can invest. We have all read in the news about the recent price drops in real estate in Madrid, about the growing number of properties on the market and the good opportunities that can be found. If you are someone who has a certain amount of savings that you’d like to invest, you might be asking yourself these three key questions:

Is it the right time to enter the real estate market in Madrid?

Do I have enough savings?

What type of property should I invest in and in what area?

The good news is that the real estate sector in Madrid is ample and very varied. There are apartments and houses for sale for (almost) all budgets and all tastes.


Real estate investment based on savings

Let’s assume that if you want to buy property, you must have a certain amount of capital to invest. While it is true that there are ways to get a mortgage to cover 100% of the cost of the purchase, this will not be possible in most cases.

What is the minimum amount of savings you should have in order to invest in a property in Madrid? At Property Buyers we have helped buyers with as little as €50,000 – €60,000 of funds, up to several million euros.

The amount of savings you can invest will be the main determinant of the areas in which you can invest, the type of apartment or house, and the state of conservation of your purchased property.

Inversión inmobiliaria en Madrid

Invest in apartments in Madrid with little money

If you don’t have a lot of money saved up, here are some ideas you could consider:

  1. Try to get the maximum level of financing possible. It will not be easy to obtain more than an 70-80% LTV, as banks have learned their lesson from the 2008 crisis and are being more cautious when granting loans. But if you can get a bank to give you a loan for 90% of the purchase value, you could buy an apartment that costs €80,000 with just €20,000 savings (€8,000 down payment + around €8,000 taxes and fees + around €4,000 minimal renovation). But what you also have to consider very carefully is whether you really want to invest ALL your savings. Life takes many turns and it’s always recommendable to have an “emergency fund”!
  2. Invest in crowdfunding platforms. You have probably already heard of them. Their advantage is that you can invest in real estate with a very low minimal investment (some platforms let you start with less than €1,000), but the disadvantage is that you have no control over the process or the timings.


Invest in apartments in Madrid with about €50,000 in savings

“In Madrid there are no cheap properties” is a myth I want to debunk right now. There are many neighbourhoods in Madrid where you can buy an apartment for less than €100,000. Without going any further, in the huge swath between the M30 and the M40 ring roads there are several neighbourhoods that are very well connected to the city centre and where there’s a high demand for affordable rental apartments. The “typical” investment would be a 2-3 bedroom apartment, in need of a small renovation or remodelling, in a well-connected neighbourhood, with a price of about €80,000 which after the renovation or remodelling can be rented for €650 – €750 per month. With a total investment of circa €120.00 and a starting equity of around €55,000, you would be obtaining a gross annual return (ROI) of 7.5%.

Now, you have to keep in mind that to make this type of purchase you have to know the area in which you invest VERY well. Not all neighbourhoods or streets are the same, and there are certainly some undesirable areas where violence and drug dealing are on the rise.

If you’re not 100% sure of the best areas to invest in, you could consider hiring a personal real estate shopper. At Property Buyers by Somrie we specialize in helping buyers/investors and have an extensive knowledge of the most interesting neighbourhoods and those that best be avoided. In addition, thanks to our network of contacts, we can find out about the best opportunities as they come on the market (including some that are sold before ever getting published on idealista) and help you negotiate the price so that it is as low as possible.


Invest in apartments in Madrid with about € 100,000 in savings

If you have around one hundred thousand euros available to invest in a property in Madrid, a slightly wider range of possibilities opens up for you in terms of areas and types.

  1. For example, you could stay in the same neighbourhoods that we have mentioned, but opt ​​for a larger apartment, with better intrinsic qualities, or one that needs a deeper renovation. Buying an apartment that needs a complete overhaul is a good way to get a better return on your investment, because the total investment will be proportionally lower (the purchase price plus the cost of the renovation will usually be lower than if you buy an apartment that has already been renovated); but a total refurbishment is going to be obviously more expensive than a simple paint job, and this expense is not going to be included in the mortgage so you need to have the extra funds to cover it.
  2. Another option is to invest in a more central area of ​​Madrid. Within the M30 ring road, the districts of Tetuán and Arganzuela often present good opportunities at lower prices than other neighbourhoods. If you buy a to-be-renovated apartment for about €180,000, you will spend €50.000 to €70.000 on the down payment and taxes (depending on the LTV), spend another 30.000€ to €50.000 on renovating it, and rent it out for €800 to €950 per month.

The gross annual return on the investment is lower (between 4 and 5%) than in slightly more peripheral areas, but these central neighbourhoods are undergoing gentrification on a large scale and therefore both sale and rental prices are going up. In other words, if you prefer to invest in more central neighbourhood that you may know better and have easier access to, with €100,000 in savings you have this option too.

As real estate personal shoppers, we are constantly monitoring the market, we know the best areas and streets, and above all we can help you navigate the myriad of new listings that are published every single day to help you find that diamond in the rough.

Inversión inmobiliaria en Madrid

Invest with about €150,000 in savings

If you have between €100,000 and €200,000 in savings, you have even more possibilities.

In addition to all the options we’ve mentioned so far, you could:

  1. Invest in TWO small, very profitable apartments, such as those we mentioned in the first section of this post (the ones you can buy with €50,000 in savings). This option is very interesting if you want to maximize the return on your investment, regardless of location.
  2. Invest in a larger and more central apartment. You could opt for an apartment that costs up to €350,000, and if it is well located and you renovate it nicely, you can rent it for €1,200 to €1,500. The return will be between 3.5 – 4.5%, but it will be a safer value because it is in a well-consolidated area, less prone to price fluctuations in the medium-long term.


If you have € 200,000 or more to invest in a property

In this case you have even more options.

  1. You could invest in two-three different apartments in different areas, diversifying your investment.
  2. You also have the possibility of making a single investment in a high-end apartment, in a very central and well-consolidated area. I am talking about investing in Chamberí, Salamanca, and the like. These neighbourhoods offer a somewhat lower annual return on the investment if you consider just the rental income; but they are very safe values, where long-term equity gain is almost guaranteed.
  3. You also have the option of going for a more profitable type of rental: touristic/seasonal or by rooms. In order to be successful with this type of rental, the apartment has to be very centrally located, have a big enough size to make it worthwhile renting by rooms, and the renovation has to be stylish and include furnishings. All these factors will make you have to invest more funds at the start.

The biggest challenge you will face if you have €200.000 or more to invest is choosing the most suitable option for you from the wide range of possibilities you have; deciding whether it is better to buy a renovated or a to-be renovated apartment; knowing how to distinguish the most profitable streets within a certain neighbourhood. As your real estate personal shoppers, we can bring value to you by analysing your needs, developing a solid investment strategy and an action plan. And then, of course, we can help you achieve your investment goals quickly and efficiently, without you having to spend countless hours of your very limited time.

invertir en pisos prime Madrid



In summary, regardless of the level of savings you have, you can make a very interesting and profitable real estate investment in Madrid. If you have more funds, you can opt for a wider range of neighbourhoods, types of apartments and types of rental, but not necessarily will investing more funds in a single property get you a higher yield. The key is finding a balance between your desire to obtain the highest possible return, and your desire to make an investment with which you feel comfortable and don’t lose any sleep over.


The first step that I recommend you take is to call me: let’s chat, tell me about your plan, and I’m sure I can give you some valuable information without any obligation. If later you decide that the service we provide interests you, I can help you make maximize profitability while minimizing headaches.

Does this sound interesting?

Let’s talk!

Leave a Reply

Información básica sobre protección de datos Ver más

  • Responsable: Agnes Csomos Gorskova.
  • Finalidad:  Moderar los comentarios.
  • Legitimación:  Por consentimiento del interesado.
  • Destinatarios y encargados de tratamiento:  No se ceden o comunican datos a terceros para prestar este servicio. El Titular ha contratado los servicios de alojamiento web a Webempresa Europa S.L. que actúa como encargado de tratamiento.
  • Derechos: Acceder, rectificar y suprimir los datos.
  • Información Adicional: Puede consultar la información detallada en la Política de Privacidad.