First aid for investing in Madrid – one essential step before you buy property
Are you considering buying a property in Madrid as an investment? Before you sign anything, there is one crucial step that can save you thousands of euros and prevent costly mistakes: calculating your return on investment (ROI) before you buy.
One of the most common mistakes I see is this: People buy a property first and only after the purchase start calculating whether the numbers actually make sense. Unfortunately, by then it’s often too late. By checking your ROI before you buy, you can:
- Avoid overpaying for a property
- Prevent wrong financial assumptions
- Ensure the investment actually generates real returns
- Compare multiple properties objectively
- Decide whether short-term or long-term rental makes more sense
A solid ROI calculation gives you clarity and confidence. It helps you:
- Understand the true profitability of a property
- Factor in all realistic costs (taxes, maintenance, management, vacancies)
- Set realistic expectations instead of emotional decisions
- Protect your capital while building passive income
This is especially important if you are investing in a city like Madrid, where:
- Property prices vary greatly by neighborhood
- Rental regulations can change
- Rental yields differ significantly between short-term and long-term strategies.