Over the past two years, I’ve been trying out the Privalore platform in Spain for investing in Spanish property. Two properties that I’ve invested in have already been sold, so it’s a good time to take a look at the performance of these properties and my evaluation of Privalore.
I like Privalore because they invest their own money in every property and execute quality refurbishments. The value created is very obvious and tangible, and therefore the resale price depends much less on speculation and more on the value added by Privalore’s refurbishments.
I’ve discussed Privalore and other Spanish real estate crowdfunding websites in a separate post, but I’ll remind you once again about the commissions that Privalore takes from each project sale.
They take two types of commissions.
The first one is a project management commission:
- around 4% of the selling price for management of the project (management commission)
- 50% of profits until 15% return is achieved for the investor, 70% on the remaining profits (success commission)
The second is an investment commission:
- prefinancing commission (variable rate)
- percentage of profits based on the amount they invest in each project
These are some of the wellness elements that Privalore includes in each refurbishment:
- Low laminated parquet in VOC’s.
- Circadian lighting system.
- Smart thermostat with air conditioning ducts.
- Antimicrobial paint and odors on the ceiling, kitchens, and bathrooms.
- Conservation of original elements: walls with reclaimed exposed brick and mosaic floors.
- Ecological decorative paintings.
- Antimicrobial countertop in kitchen.
- High-efficiency air filter.
- Reform with a neutral carbon footprint.
Let’s jump straight into my investments with Privalore so far:
This property is found in Barcelona and the whole operation was conducted over almost 7 months.
Let’s take a look at some data.
The property was acquired for €340.000, although it was valued at €426.452. That means that Privalore bought the property at around 20% discount outright.
It’s a south-facing corner apartment with a good-sized terrace (they’re greatly valued in Spain).
What’s interesting here is to know what are the major influences on a property’s valuation. They’re location, followed by age, usable floor space and state of conservation.
- Start of operations: 26/07/2018
- Sale of property: 20/02/2018
- Total cost: €510.998
- Sales price: €560.000
- Estimated return: 12%
- Annualized return: 11,4%
- Client visits: 29
From the net returns of this property, Privalore also deducted 1% of the total sum being returned to me (total of original amount invested and profits) for ITPAJD and 19% of the profits for IRPF/IS.
It took 2 months to refurbish and 5 months to sell. It was bought by a Russian lady.
This property is found in Barcelona and the whole operation was conducted over 15 months.
The property was acquired for €295.000, although it was valued at €310.265. That means that Privalore bought the property at around 5% discount outright.
- Start of operations: 22/03/2017
- Sale of property: 19/06/2018
- Total cost: €446.497
- Sales price: €465.000
- Estimated return: 14%
- Annualized return: 5,6%
- Client visits: 59
The apartment was bought by a young local couple.
It took 2 months to refurbish and 5 months to sell. It took a much longer time to sell this property than expected, mostly due to political instability in Catalunya that resulted in international investment slowing down to a crawl.
This wasn’t an impressive return, but it’s acceptable given the damage done to Catalunya’s reputation by the separatist movement. It’s hard to promote high-end properties to foreign investors when they watch riots and reports of deep political unrest on TV/YouTube back in their countries.
Dos de Maig 279
This property is found in Barcelona and the whole operation was conducted over 10 months.
The property was acquired for €190.000, although it was valued at €226.289. That means that Privalore bought the property at around 16% discount outright.
- Start of operations: 09/10/2017
- Sale of property: 14/08/2018
- Total cost: €297.323
- Sales price: €315.000
- Estimated return: 10.9%
- Annualized return: 7,1%
- Client visits: 64
The refurbishment took 4 months to complete, after which the property was on the market for 6 months before a sale was concluded.
The property was bought by an investment company. Since it was bought by a company, the ITP tax to pay was higher than when selling to a private person. In fact, the costs in terms of tax paid for ITP, in this case, were €7.000.
I’m very happy with my investments with Privalore so far and will continue investing with this company in the near future.
I’ll also embed a few videos showing the steps that Privalore takes to make sure the buildings they refurbish are healthy and sustainable (in Spanish only):