Buy to Let Investments in Spain
Tourism in the Costa Blanca and Costa Calida continues to grow at a steady rate, making it the ideal location for buy-to-let investment.
What are the advantages of buying to let in Spain?
- Each year Rental Investors can expect to gain round 10% to 12% of the value of their property, plus the long term annual property value growth.
- Property prices rose approximately 25% last year in the area.
- Low mortgage rates in the EU make it easy to cover the yearly mortgage repayments.
- We're in partnership with an experienced letting company who could provide you with all the support needed in achieving a return from your property.
How do I calculate my approximate rental income from the property?
Rental income will always depend on the size, condition and location of your property, and how effectively the property is marketed to prospective clients. The letting season is primarily split into three.| High | (July and August) |
| Medium | (May June September October) |
| Low | (November to April) |
How do I market the property?
Many developers on the Costa Blanca and Costa Calida offer a property management service on new properties. This can be a convenient way of finding prospective clients and it will be managed and maintained along with similar properties within the development.
You can also find and appoint a rental company who specialize in short or long term lets in the area. If a rental company is used to let your property they will typically charge 20% of the gross rental income. Alternatively, you can market the property yourself though the internet for example, or word of mouth.
How do I calculate the running costs of the property?
In order to calculate the basic cost of ownership, you must take into account rates, utilities and maintenance costs (wear and tear on furniture, pool and garden upkeep are some of the costs you can incur). Tax and community fees will also be payable.
How much profit do I make?
Net returns (after all costs have been deducted) can be as high as 8% per annum which compares very favourably with the UK buy to let market (currently gaining net returns of about 3%). This does not take into account capital appreciation
AN EXAMPLE
Assumptions:
- Property costs £100,000
- Cash Purchase
- The property appreciates by 10% per annum
- Cost of using a rental company is 20% of rental income
- Annual running costs are £2,000
Occupancies and rates are:
| Season | Occupancy % | Weeks Rental Number | Rate £ | Rent £ |
| High Mid Low |
100 75 50 |
9 13 13 |
308 247 180 |
2,772 3,211 2,340 |
| TOTAL | 67 | 35 | 8,323 | |
Financial Model |
Annual £ |
|||
| Rental Income Rental Company/Promotion Running Costs Cleaning/Laundry Rental Profit Capital Appreciation |
8,323 (2,700) (2,000) (1,000) 2,623 10,000 |
|||
| Annual Profit | 12,623 | |||