Investing in Spanish Property

Investing in Spanish Property,

What you should know

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Investing in Spanish Property, what you should know

There are many different reasons why someone would be investing in Spanish Property. Some purchase a second home to enjoy the wonderful Spanish climate without having to worry about high hotel rates or worry if there is still availability in the high season. They can decide themselves, when they would like to go on holiday and for how long, without having to worry about the logistics of it.

Apart from the holidaying public, and Golf fanatics who invest in  Front Line Golf Location , we see more and more people who decide to say farewell to their birth countries and try their luck in Spain to live the “good life”.

It is not just the warm and tropical climate that attracts people to move to this exotic country though. Financially you can gain a lot from moving to Spain. This is why Spain becomes more and more attractive for real estate investors, small or large.

Rental income on Spanish Properties

When you invest in a property in Spain with the ultimate goal to rent it out, it is important to outweigh the positives against the negatives to ensure you are fully educated before you make this important decision.
Firstly, you need to decide if your Spanish Villa or Apartment will be rented out all year round or if you would like to use the property yourself some time during the year.
There are a variety of agents who will look after your rental management for you such as Key Clean Spain or PMR, where you can even list your property for rental and people can simply book online.

Keep in mind, when you use the property yourself during a certain time of the year, you will need to deduct this period from your income. Especially when you decide to use the property during the high season, this can make a significant impact on your rental income.

A great example of an interesting high end rental property can be found here.

Before you purchase the property, you will need to do your maths:
How much does this property cost me (cost price, monthly charges, yearly charges) and how much can I realistically ask for my weekly rental?
If the first is higher than the latter, then perhaps you need to reconsider the investment.

The location of your property will have a big hand in how much you can charge for your rental.
To give you an example: an apartment with community pool a few miles from the seaside will be a cheaper investment as opposed to a mansion in a rustic area a few miles from the seaside.
The higher your purchase price, the higher your rent needs to become.

If you decide to purchase more than 1 property in Spain, and really want to invest on a larger scale, discount options are available. Such as, when you purchase a set of properties in one urbanization, especially if you purchase off-plan, you can really do great deals.
This way, your purchase price will be lower, and therefore your rental income will have a greater profit.

To sum up, you need to look at the following end goals:

  • what is the goal of your investment
    – personal use
    – rental only
    – personal use and rental
  • How many rental weeks will pay back your investment
  • Location and rental price VS rental possibilities
  • How well will this property be rented each week. Is it a popular location?
  • Discount for multi-purchases
  • Can I purchase a multitude of properties and receive discounts when I do

 

In short: Educate yourself on all the possibilities before investing in property!

Profit on property sales

Spain is a great country to invest because the house prices are very low right now, so investing in a property in Spain where the main objective is getting a quick return from your money is a great idea, and many investors have caught on to this trend and have already made a lot of money with it.

What you need to keep in mind here are a couple of factors. Just as the rental properties, you need to ensure the location is attractive. Front line beach, sea views, mountain views, and how near they are to shops, airport and recreation areas.

Spain is a very popular holiday destination, so your investment needs to be attractive for the leisure industry.

Then there is the choice of buying off-plan. Off plan is a great option if you want to make a large return on your investment, but you will have to have patience!

You will have to keep in mind, when buying off-plan, that you will have to wait for the build to be finished before you can either rent a property out or sell it again. The Great thing about buying off-plan is, that even during the building process you could sell your property, and already make a profit.

This is because when you get in there early, as one of the first to purchase a property off plan, the price will still be at its lowest. Once a couple of properties have been sold, the price of the next properties will go up. If you have bought early into a complex with many apartments to sell, you will find the price for your property has almost doubled before it has even been finished!

For more information follow our blogs where we will update you on property investments in Spain on a daily basis.

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Sandra Young

Sandra is a reputable journalist originally from Hertfordshire (UK) now living in Sunny Spain. She is involved in the Spanish Economy and deals with many property investors on the Costa del Sol giving them advice on the best investment opportunities coming on the market.