Spanish Economist Warns of Risks in Popular Housing Strategy

A new trend is taking hold in the Spanish real estate market in 2025: the so-called “house flipping” strategy, promising quick and easy profits. This scheme, imported from across the Atlantic, appears simple and ingenious at first glance: buy a property in poor condition, give it a quick facelift, and resell it at a substantial markup. This approach is attracting an increasing number of private investors eager to turn modest investments into significant capital in a short period. Success stories of apartment prices doubling within a year are widely shared on social media, creating an illusion of risk-free wealth and fueling a frenzy.

However, not everyone shares this optimism. Renowned economist Gonzalo Bernardos has openly criticized the trend, urging investors to proceed with caution. In his view, this fashionable English-language term merely dresses up a form of speculation long known in Spain as simply ‘buy, renovate, and sell.’ The expert believes that using foreign terminology lends a false sense of modernity and reliability to what remains a risky venture. He stresses that the current success of ‘flippers’ is a temporary phenomenon, entirely dependent on favorable market conditions.

The main danger, as Bernardos points out, lies at the very core of this business model. It can only generate income in a constantly growing market. The economist bluntly states: as soon as the price trend changes—and sooner or later it will—the entire system will collapse. Those who consider themselves successful investors today will find themselves at a severe disadvantage. They’ll be left holding overvalued assets, burdened with renovation costs, and forced to sell property at a loss just to recover some of their investment. According to him, many will simply be left with nothing.

Bernardos also revealed the three ‘golden rules’ behind successful flipping, while simultaneously highlighting their vulnerabilities. First, it’s essential to buy property significantly below its market value, which is becoming increasingly difficult amid high demand. Second, renovations must be as cheap as possible while creating the appearance of expensive, high-quality work. Third, and most importantly, the market must be continuously rising. According to the analyst, the coincidence of all these factors is more a matter of luck than of careful strategy. He is skeptical of stories about apartments allegedly increasing from 230,000 to 420,000 euros, reminding that the asking price and the actual sale amount can differ greatly. The expert claims to personally know many cases where such ventures have ended in complete financial ruin for unfortunate investors.