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Finding high quality and well-priced accommodation in Madrid can be relatively difficult. In recent years, property prices in Madrid have sky-rocketed. In fact, the city now has the most expensive rental and purchase prices in the country. There is a lack of refurbished, spacious and well-located accommodation in the city, which means the consequent high demand and low supply leads to constantly increasing rates.
That said, the outbreak of Covid-19 has had an impact on the Spanish housing market and caused it to stagnate, while elsewhere in Spain housing prices have dropped dramatically.
Types of accommodation in Madrid
Living in the city centre
The type of accommodation in Madrid that is typically occupied by expats is an apartment with a small balcony. Usually, the more modern an apartment, the smaller the living space. Demand and therefore price tags for these newer entities do, however, remain high.
In general, apartments that are 10 years of age or older will be of lower quality than those of a similar age found in other capital cities in Western Europe.
The typical city centre apartment sits within a charming old building, sometimes lacks light, has small bedrooms and, if it is a rental, is furnished sparsely and cheaply. On the upside, city centre apartments are in close proximity to nearly everything, which eliminates the need for expats to own a car.
Living outside the city centre
Just outside of the city centre, apartments are cheaper, larger, modern, well-equipped, and usually include a garage.
In the suburbs, houses are more common, and newly constructed blocks can even include a swimming pool and tennis courts. Both furnished and unfurnished housing options are available. There are plenty of furniture retailers where items can be purchased at reasonable prices which will save expats from shipping furniture to Spain.
As in most large metropolitan areas, there are some parts of the city that are more desirable than others. Naturally, these are the most expensive and tend to be centrally located, close to good schools and transport connections.
Finding accommodation in Madrid
Expats who already know the area in which they’d like to live, and who have already defined the criteria for their accommodation, can search for apartments online. It is also possible to check data, organise viewings, negotiate rental prices with the landlord, review the contract and manage other administrative and legal requirements via this medium.
If an expat neither has the time, nor the knowledge or the language skills to search for accommodation in Madrid, a real-estate professional will be their best resource. A Spanish estate agent’s level of English may not be the best, but they will look for apartments within their portfolio that comply with an expat’s criteria. It's important to bear in mind that agent's fees in Madrid can mount up and can reach the equivalent of one month's rent.
Renting accommodation in Madrid
The rental market in Madrid is under-developed compared to other Western European capital cities, which means that it can be challenging for expats to find a quality apartment.
The average furnished apartment in Madrid is often of poorer quality than many expats may be used to, and most landlords expect their tenants to maintain the property themselves.
The good news is that the tenant selection process is not excessively demanding. Landlords choose their tenants on a first come-first serve basis; the only requirement being that the tenant shows proof of income, and can pay a security deposit.
Sharing apartments, on the other hand, is slowly becoming the default option for students and young professionals who want to live in the city centre, but can't afford to pay rent on their own.
Negotiating a lease in Madrid
In general, the mandatory initial period is one year and payments are due at the start of each month.
Expat tenants are often asked to give proof of income (job contract and last three pay slips) and, in rare cases, references from their previous landlord. Providing this information to landlords can help an expat to show they are serious about renting a property and can help to differentiate them from other potential tenants.
The security deposit that an expat is expected to pay when signing a lease is generally the equivalent of one month's rent (two months if furnished). This will be returned at the end of the leasing period, provided the apartment has not sustained any damages at fault to the tenant.
Costs and Fees
Expats wishing to rent accommodation in Madrid will generally have available the equivalent of three months' rent up front. The deposit on the accommodation is generally the equivalent of one month's rent, the real-estate agent fees also tend to equal a month's rent, and the actual first month's rent will also need to be paid in advance.
Utilities, such as water and electricity, are generally not included in the rental price for an apartment in Madrid, but tenants may be able to negotiate with the landlord for the inclusion of these costs.