An investor ‘crazy’ for abandoned villages buys four at once

The abandoned villages of Spain are looking for a second chance. Many find it thanks to growing interest of investors in the rural world that continues to increase in the heat of the coronavirus pandemic and the interesting returns offered by these assets if they are used for the agricultural, livestock or recreational exploitation. The furor is such that an international investor has recently bought four abandoned villages at once.

They are located in the province of Lugo, and although they are not adjacent, they are close to each other. The largest has an area of 40 hectares, is built and has been sold for 135,000 euroswhile the smallest is 25 hectares, it is also built and he has paid 40,000 euros for it.

The anonymous buyer has acquired the villages with the aim of living there with his family, who currently resides outside of Spain. “He is a foreign investor who does not want to do business, he is simply looking to retire in the countryside surrounded by his loved ones. Of course, their children could do business in the future,” explains Elvira Fafián, manager of Aldeas Abandonadas, the real estate company that has managed the sale operation.

“Also, sometimes a person buys a property and likes it so much that they want another one for a family member, and they end up buying”

But investors don’t just buy to enjoy their properties. They also do it for other reasons. Some exploit the land with crops or livestock, others undertake new business projects or are digital nomads.

“We have worked with foreign executives who prefer to live in the countryside to be more productive and reduce stress, married couples who want to develop sustainable projects or entire families interested in the restaurant business. There is everything”, says Rosi Costoya, manager of Galician Country Homes, real estate specialized in the sale of unique properties in Galicia.

They have also managed multiple purchases. “Yes, it has happened to us. We work with investment funds that want to develop restoration businesses in abandoned areas. Also, sometimes a person buys a property and likes it so much that they want another one for a family member, and they end up buying,” he says.

Many of the investors who seek and acquire abandoned villages and towns or other unique properties in Spain are foreigners., although there are also national investors. Increasingly. In the case of Galician Country Homes, 85% of its clients are buyers from other countries, mainly from the United Kingdom and the United States, although they also come from Belgium or Denmark.

inheritances

The exodus from the countryside to the city has caused the depopulation of many areas of Spain, and the properties have passed from generation to generation without being exploited. Most of the abandoned nuclei for sale come from inheritances and are shared, which makes it difficult to put them on the market.

“Some villages have been abandoned for 50 years and belong to several families or to several people within the same family. It is not easy for them to come to an agreement to sell. Other times the owners have emigrated and it is very difficult to find them. When there is only one heir, everything is faster”, explains the manager of the real estate company Aldeas Abandonadas, which takes an average of between four and five months to carry out a sale and purchase operation. The term is reduced to two months if the seller is only one person.

The division of the land, the lack of documentation or not knowing the origin of the buyer are other aspects that complicate and even prevent the sale of these assets. “Sometimes it is impossible to sell properties because it is not possible to define who the owner is. It has taken us two years to do all the documentation to sell a 12th-century country house and for the investor to acquire it with total security,” they say from Galician Country Homes.

rehabilitation costs

Abandoned villages in Spain are particularly attractive to investors because of their price. Although there are properties that can reach six and seven figures, in general, it does not imply an exorbitant financial outlay.

Yes, before buying experts recommend considering the subsequent investment in rehabilitation. It is not for less. Many of the buildings are in ruins and require an economic injection that far exceeds the initial purchase price. In fact, many projects fail for this reason even when they have already been launched.

Most of the abandoned urban centers in Spain are concentrated in Galicia, Castile and Leon and Asturias. Lugo is one of the provinces that offers the most bargains to investors, although many abandoned villages do not have buildings, and if they do, they are in very poor condition, almost in ruins.

Precisely, that province concentrates the bulk of the offer of Abandoned Villages. One of the cheapest properties sells for 30,000 euros. It is 13 kilometers from the city, it has three houses -all to reform-, a 3,000 m2 farm that ends at the river, granary and stone oven. A village 50 kilometers from the city also stands out.

The buyer who has more budget can buy a abandoned village near the beach for 329,000 euros. It includes several buildings, one of which is the fully restored main house with four floors, several warehouses, a barn, two cellars and a farm of more than 40,000 m2 where all kinds of crops can be harvested.

In the Community of Madrid, the Basque Country, Navarra, Andalusia, Aragon or La Rioja there are also investment opportunities, although prices are generally higher than in Galicia or Castilla y León.