How This Barcelona-Based Startup Is Offering a Smart and Cost-Effective Alternative to Renting
A new Spanish startup is offering new ways to save on renting. People can now buy rooms as a smart alternative to renting. Habitacion.com recently closed a pre-seed funding round worth €400k ($42,810.37). Founded in 2023 in Madrid by Oriol Valls, Anna Labarias and José Fernández, the company invites clients to become owners of a part of the property in a flexible way.
Oriol Valls, co-founder and CEO of habitacion.com, said: "We want to transform the way people save by offering customers to avoid rental costs and save money when buying a room."
The first round of funding was led by SeedRocket which is the first-ever technology-based startup accelerator created in Spain with financial support from LANAI Partners as well as BeCapital Seed Money. Other than this, a group of investors belonging to SeedRocket’s business angels network and other relevant figures of the Spanish entrepreneurial ecosystem also joined in this round, per EU Startups. The funds that they raised will be used in operations as well as infrastructure and a part of the money will go towards validating the business model through the sale of the first rooms.
They started in Terrassa, Barcelona, and the company plans to carry out various real estate operations and later expand its business to prominent Spanish cities like Madrid, Barcelona, Valencia, Granada, and Alicante. The company estimates that they will be selling close to 40 rooms by the end of 2024.
The company's USP is its higher standards of rooms as well as logistical and management facilities. A report by the General Council of Notaries in Spain found that more and more Americans are starting to live in Spain. The number has grown substantially over the years and along with it, home sales to Americans also jumped by 88% in 2019, as per the report.
With the growing trend of digital nomadism, many Americans are moving to different countries and settling. Startups like Habitacion.com are great when it comes to offering Americans with lower budgets to make investments rather than waste their money on rent which will not get them anything in the long term. Reports also show that among expat groups who are buying properties in Spain, Americans pay the second most after the Danes, shelling out $3,119 or more per square meter, per a 2023 report by CNBC.
It's important to note that the property taxes in Europe work differently compared to the US. Most taxes in Spain are paid directly in a stamp duty or AJD rather than paying them annually as we do in the US. "The stamp duty can run from 1% to 2.5%, and then there is [value-added tax] on new construction or transfer tax on pre-owned homes,” said certified financial planner Jude Boudreaux, partner and senior financial planner with The Planning Center in New Orleans. "It’s all substantially more than in the States."
"You pay a lot of the taxes upfront rather than on an ongoing basis, so the purchasing costs and the purchasing process are a lot different,” said Ingrim, who advises interested buyers to get in touch with local estate agents, per CNBC.
Spain is extremely welcoming to immigrants because of its low population. However, if you are looking to retire in Spain or invest in real estate there, then it's important to look at the tax implications. Americans staying and working in Spain will have higher tax rates. Read more about all the tax and financial implications before making a decision.