Lessons from investing in real estate

I moved my family from Sweden to Marbella in 2018. We meant to stay for two years. We are still here. In the beginning, when I started looking at putting some money into local property, I had a very clear picture of how it would work. I would buy a place, fix it up a bit, rent it out, and watch the returns roll in while I played tennis. The tennis part happened, even if I still play quite badly. The passive income part did not. I will be honest with you: property is not a passive asset. It is a job. People sell the dream of buying real estate as a way to sit back and let your money work for you. I bought into that idea. I thought it would be a quiet, predictable place to park cash.

The spreadsheet delusion

When you spend years in software and digital sales, you get used to things behaving logically. Back when Fredrik and I were building Mediapilot in Stockholm, or later when I was working on the commercial side at Happeo, we lived and died by metrics. You build a model, you input the variables, and the output makes sense. If you tweak the pricing on a software product, you can immediately track the conversion rate. So, when I started looking at real estate here in Spain, I treated it the same way. I built beautiful, complex Excel models. I calculated yield, projected capital appreciation, and factored in maintenance costs down to the last decimal. I spent hours staring at screens instead of streets.

It was a complete waste of time. The good deals I have found never came from sitting behind a desk in my house. They came from being local and being patient. They came from walking around the same neighbourhoods so often that I noticed when a physical 'Se Vende' sign went up before anyone had the chance to list it on an online portal. They came from taking the time to speak with people, getting to know the areas, and understanding which buildings have terrible management companies and which ones are quietly well-run. Analysis is comforting because it feels like work. But in property, at least at the scale I operate, local presence beats a spreadsheet every single time. You have to be there.

The renovation reality

Every renovation budget is a work of fiction, usually written by an optimist.

Then comes the phase where you actually have to fix the place. I have learned to accept a hard truth about building work. Every single renovation runs thirty to forty per cent over budget. You can hire the most highly recommended contractors, you can buy the materials yourself, you can stand in the middle of the room and watch them work. It does not matter. You open a wall and find pipes that look like they were installed decades ago and are crumbling. The tiles you ordered get stuck in transit for six weeks, meaning the bathroom fitters have to leave for another job and will not be back until next month. Suddenly, your carefully planned six-week project takes four months.

In the beginning, this used to ruin my week. I would argue with project managers, try to micromanage the supply chain, and stress over every unexpected invoice. Now, I just add forty per cent to whatever the initial quote is before I decide if the deal makes sense. I assume it will take twice as long and cost significantly more. If the numbers still work with that massive buffer, I go ahead. If they do not, I walk away. It saves a lot of stress. You have to treat the delays and the extra costs as a built-in tax on the business, not an unexpected crisis. It is simply the cost of doing physical things in the real world.

What you are actually buying

I still buy property. I like physical things you can point at, especially when I spend most of my days building digital infrastructure like Anchor and Substrat. There is something satisfying about seeing a run-down flat turn into a place where someone actually wants to live. But I no longer pretend it is passive. Between leaking boilers, managing tenants, chasing builders, and paying communal fees, it demands your attention. Every year since around 2010, I have kept a written life plan where I score my health, family, finances, work, and personal time out of ten. My personal time score takes a hit whenever I forget that property requires active, messy management. I got this wrong for years. I assumed the asset would do the heavy lifting for me.

If you want to put your money into something and forget about it, buy an index fund. If you want to buy property, accept that you are taking on a part-time job in project management and local networking. You have to be willing to walk the streets, wait for the right moment, and stomach the day a plumber hands you a bill for a pipe you did not know existed. I haven't got this entirely figured out, and I still make mistakes when I walk into a new space and try to guess what needs fixing. But at least I know what game I am playing now.