Investment approach
Diversifying across several projects: what it actually gives
Splitting a ticket across several projects removes the risks of a specific property and contractor, but not market or regulatory risk. A look at the figures on the ITP scale and the 2007–2014 fall.
Diversification across projects is the splitting of a ticket between several independent properties instead of one. It reduces the risks tied to a specific property: hidden defects, drawn-out permits, a poor contractor, a slow buyer. It does not reduce market and regulatory risk: those are common to every property on the same market, and in the fall of 2007 to 2014 the house price index for Catalonia went from 93.7 to 50.0, a drop of 46.6% over 27 quarters (INE). Below, point by point: what splitting gives, what it does not, and what it costs.
What splitting a ticket across several projects gives
Splitting works against the risk of a single event. One property is one sample of one: any finding after the walls are opened, a licence delay or a buyer dropping out affects the whole result. Splitting covers:
- Property risk. The state of the structure, damp, encumbrances, unregistered works. Each property is checked separately: due diligence checklist.
- Contractor and works-schedule risk. A schedule slipping on one site does not stop the others. On this risk: contractor and conflict risk.
- Permit risk. The approval regime and the queue depend on the specific address and list of works (regimes and timelines).
- Single-buyer risk. The exit price is tested on several properties rather than in one negotiation.
- Counterparty risk. An indirect reference point on company lifespan: according to INE, of the companies created in 2018, 41.9% were still active five years later (Demografía de empresas 2023). That covers all sectors, not construction, but the order of magnitude is telling.
Which risks splitting does not remove
| Risk | Reduced by splitting the ticket | What covers it instead |
|---|---|---|
| Hidden defects in the property | Yes | A technical report before negotiating, for each property |
| Works schedule slipping | Yes | An estimate with a reserve, supervision, a payment schedule |
| Permit delays | In part | Checking the works regime before purchase, timeline scenarios |
| A slow exit, low liquidity | In part | An entry price with a margin, exit plans A, B and C |
| Falling market prices | No | A margin of safety in the entry price, horizon and readiness to wait |
| A rising cost of money | No | The share of borrowed funds and the terms of the loan |
| Regulatory change in Catalonia | No | Legal checks and scenarios, regulatory risk |
| An error in the calculation method | No | An independent review of the assumptions |
The market factor is visible in the figures. In table 4 of the Ministerio de Vivienda data, the average appraised value of housing in Barcelona was 3,950 €/m² in Q2 2008 and 2,385 €/m² in Q1 2014, which is 39.6% lower (Ministerio de Vivienda y Agenda Urbana). Five properties in Barcelona would have gone through exactly the same thing in that period. The history of the cycles is covered in the article on Spanish property market cycles.
The cost of money is shared too: the 12-month Euribor stood at 3.247% in September 2026 (Banco de España, published 1 October 2026). If projects run with credit, the rate changes for all of them at once (Euribor and the project).
What splitting costs in taxes and expenses
Splitting is not free. The ITP (impuesto de transmisiones patrimoniales, the transfer tax on resale housing) scale in Catalonia is progressive, and it is arranged in favour of splitting, while the fixed costs of a project work the other way.
A worked example, not a forecast. Assumption: resale housing, rates on the Agència Tributària de Catalunya scale from 27.06.2025 (10% up to 600,000 €, 11% up to 900,000 €, 12% up to 1.5 M€, 13% above).
| Option | ITP | Difference |
|---|---|---|
| One purchase of 1.2 M€ | 129,000 € | base case |
| Two purchases of 600,000 € each | 120,000 € | minus 9,000 € |
The saving on tax appears because each transaction starts the scale again. Working against it are the fixed costs: a technical report, legal checks, the design, supervision, paperwork and management are counted per property rather than per euro of budget, and on two properties of 600,000 € there are roughly twice as many of them (the total cost of a project).
The second added cost is not financial: two projects mean two schedules, two sets of permits, two cost estimates and two negotiations. The investor's attention is a resource as well, and splitting it often costs more than 9,000 €.
How to work out a sufficient number of projects
There is no formula in public sources that will name the right number of projects, and I will not invent one. In practice the number runs into three limits.
- The project threshold. At DNPI, residential and commercial property and land start at 1 M€, hotel projects at 3 M€ and whole buildings at 10 M€. A ticket of 2 M€ is at most two residential projects, not five.
- A cushion for deviations in each budget. A reserve is needed in every project separately. Splitting a ticket without a reserve makes the position worse, not better.
- Comparability of results. Projects of different lengths cannot be compared on a percentage for the project. Converting to an annual rate is conditional and, with interim cash flows, requires assumptions about reinvestment (see Ludovic Phalippou's analysis on the CFA Institute Research and Policy Center blog, 8 November 2024). How this is calculated: IRR in plain language.
Splitting by project type works differently from splitting by number of properties: a plot of land, an apartment for renovation and a promoción react to the market in different ways and have different timelines. A comparison of strategies: investment strategies in Barcelona.
Who splitting a ticket does not suit
It does not suit anyone whose ticket equals one threshold: under the company's rules 1 M€ cannot be split into two residential projects. It does not suit anyone who wants to use splitting to take the reserve out of the budgets, which swaps one risk for another. It does not suit anyone counting on a reduction in market risk: a price fall touches every property on the same market at once. And it does not suit anyone unwilling to read two sets of documents instead of one.
Concentration risk in a single property is covered separately (concentration in one property), and the logic of capital allocation in the article on one property or a portfolio. A risk map for the Barcelona market is collected in a separate piece, and your own scenario for the number of projects can be sketched out in the investor calculator.
Questions and answers
Does diversifying across projects reduce the risk of falling prices?
No. Properties on the same market react to a common factor together: from 2007 to 2014 the price index for Catalonia fell by 46.6%. What works against market risk is an entry price with a margin and a horizon, not the number of properties.
Is it better for tax to buy two properties instead of one?
On the Catalan ITP scale each transaction starts the scale again, so two purchases of 600,000 € produce less tax than one of 1.2 M€. But the fixed costs per property double, and the outcome is counted on the full budget rather than on a single line.
How many projects does an investor need?
There is no universal number. In practice it is limited by the project threshold, by having a reserve in each budget and by how many sets of documents the investor is willing to control.
Can one ticket be split between projects of different types?
Yes, if each ticket clears its own threshold: residential and commercial property and land from 1 M€, hotel projects from 3 M€, whole buildings from 10 M€. The terms for each project are set by its own contract.
How do you compare the results of projects of different lengths?
A percentage for the project is no use for that. It needs conversion to a common term, and that rests on assumptions worth stating openly. On the limits of these measures: equity multiple against IRR.
