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How much does it cost to rent a flat in Spain?

The first question I can understand id as I am an architect, but I can’t understand why should everyone ask me about the price of a let. In any case I have done some investigation and these are my results which I would like to share it with you. 

Evidently, it will depend on the area, the quality of the construction and finishes of the flat. However, an undeniable fact is that the prices are rising and they have been doing so since the crisis finished.

So we can say that generally the cost of the rent will vary according to the city, the neighbourhood, the state of the house, the square meters or if it is furnished or not. Although the average is 9.14 Euros per square meter, in Madrid this figure increases to 13.76 euros per square meter.

There are several fixed costs that we will have to pay in Spain and will be higher or lower depending on the actual monthly rent of the apartment. The first expense will clearly be the first monthly rent to start living in the place. In addition, it is expected that we lay down one or two additional monthly rent as a bond (in case we cause any damages to the flat) and the fees of the real estate, which may be a monthly rent or 10% of the annual rental cost plus VAT.

To see it more easily, in the following graph we calculate how much we would have to pay for each expense in a disaggregated manner according to the average cost of rent:

 

 

Average

Touristic Area

Madrid

Inland

Cost M2

9,14 €

13,76 €

13,08 €

4,84 €

Area of the flat M2

90,00

90,00

90,00

90,00

Bond

822,60 €

  1.238,40 €

1.177,20 €

435,60 €

Estate agent fees

 822,60 €

1.238,40 €

1.177,20 €

435,60 €

TOTAL

1.645,20 €

2.476,80 €

2.354,40 €

871,20 €

 

 

 

And the total is…

As we can see, the total that has to be paid in the first month will be, on average, of 1.645€ euros, being able to reduce it to 871 Euros one of the most affordable autonomous community such as (Extremadura) and close to 2.500 euros in the least economic (Touristic area). Between the most expensive and the cheapest community, the cost difference to rent a house is more than 1.606 euros a month on average. Something to think about.

 

How could we finance it?

The most advisable thing is always pull from our own savings and avoid getting into debt and paying interest. In addition, it is never recommended to go to credits to pay the monthly rent, but the exception perhaps of the extra costs that exist in the first month. As it is a fixed and recurrent expense, we must ensure that we can face the rent each month.

Similarly, if we seek to pay in instalments the 2.500 Euros that is on average adding the deposit and the fees of the real estate.

On the one hand, there are credit cards, which allow us immediate financing. However, we will not always have a credit limit that lets you pay for all of these expenses.

In addition, if we plan to pay more than 1,000 euros with a credit card, a cheaper alternative would almost always be a personal loan, as they are granted from 1,000 euros and have lower interest rates than cards. In particular, the average APR of consumer loans is around 8.5% compared to a 21% of credit cards.

Some banks entities offer rental facilities with specific loans for this purpose. But the best thing is to go to the savings and try to pay the maximum of the costs out of your own pocket.

In short, everything will be reduced to spread sheet and calculate what expenses to cope with savings and which to finance to obtain if any, without forgetting what we will pay each month and add another sum to finance it.

 

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