Whilst many people are buying Spanish property to enjoy during their retirement or as a family holiday home, in recent years we’ve seen a huge surge in those looking to buy an investment property in Spain.
Just a quick glance at the Spanish property market statistics over the last few years, coupled with the continued trend of Spain maintaining its position as the #1 destination for British holidaymakers, provides enough encouraging information to make savvy buyers take action and invest in Spain.
With a wide variety of investment opportunities to consider, which is best suited to your requirements? Our Spanish property experts have all the basics of investing in Spain covered in this article.
Types of investment property in Spain
Deciding on the type of investment you wish to make is the obvious first step for anyone looking to get on the Spanish property investment ladder. You have a few different options available to you:
Buy to rent
As mentioned above, Spain continues to be the most popular holiday destination for Brits looking to enjoy a week or more in the sun. Areas such as Costa del Sol on Spain’s south coast benefit from a whopping average of 320 days of sunshine per year, the lure of which means that there is demand for rental properties for holidaymakers all-year-round, not just in the summer.
If you’re looking to buy property in Spain to rent out, location really is key. Properties that benefit from being close to tourist priorities such as beaches, shops and restaurants can usually fetch a higher rental return. Torrevieja, Costa Blanca and Malaga, Costa del Sol both offer fantastic rental investment opportunities for this reason.
Additionally, you’ll need to consider the type of property that you’re buying. It goes without saying that larger, high quality properties with more desirable features such as private pools, a BBQ area, and multiple double bedrooms will be able to be rented for a higher daily or weekly value.
Below are some examples of the type of income you could expect to make per week when renting out your Spanish property during the peak summer months:
- Newish 2 bed / 2 bath apartments – approximately €600
- 3 bed / 2 baths apartments or villas – approximately €800
- 3 bed villas with pools – approximately €1500
As you can see, if you can bear to part with your Spanish property there is great profit to be made from rental returns. Whether you choose to put this income towards your property’s annual running costs, help pay off any mortgage payments, save for a deposit on a second investment property or simply to treat yourself, the choice is entirely yours!
Buy to renovate
Spain is becoming increasingly popular with investors, meaning that new build developments are springing up all over the place. For those not in the position to build a brand new Spanish property from scratch, renovating one of the many existing resale properties that are currently on the market is a great investment opportunity.
When viewing resale properties for this purpose, it’s important to consider the realistic improvements you can make and what this will mean for your profit levels. Additionally, as with buying a property in Spain to rent out, location is vital. There’s no point in investing thousands into a property that you’ll struggle to sell due to its poor location!
When your aim is to flip the property onto someone looking for a full-time home, not just a holiday home, you can often afford to be a little further from the true tourist hotspots. As long as there are still convenient transport links and easy access to a local supermarket etc., you should still stand to make a nice profit. Locations that you may want to consider are the less ‘touristy’ regions of Alicante such as Rojales and Orihuela, and areas such as Sucina in Murcia.
Key things that you may want to include in your renovation schedule to make maximum returns on your investment include:
- Adding a pool without compromising outside space.
- Neutral, modern decoration that offers the buyer a ‘blank canvas’ to make their own.
- Don’t scrimp on the kitchen – where possible use quality worktops and appliances.
- Ensure you have enough bathrooms – for a 3-bed property you’d ideally have 2 or 3 bathrooms, including an en suite to the master if possible. Having just 1 bathroom can be off putting for many buyers.
- Consider accessibility – many of your potential buyers will be 60+, so if your property is across multiple storeys, ensure that you have at least 1 bedroom and bathroom on the ground floor.
Invest in up and coming areas
For those really clever buyers, the simplest way to make some money from an investment property in Spain is to buy in an area that is up and coming. As the inevitable desire for property in your chosen location increases, so will property prices. This means all you have to do is wait until you’re satisfied that you’re set to make a nice profit, and enjoy living in your Spanish property in the meantime!
As with any Spanish property investment, you’ll still want to purchase a quality build. You could own a property in the most desirable region in Spain, but if your property is very clearly not up to standard you will still struggle to find a buyer.
To benefit from this type of Spanish property investment you’ll need to keep a very close eye on the property market, currency rates and property prices across a variety of regions in order to spot the trends for up and coming areas. Patience is key!
One of the key regions that we expect to see continue to thrive and increase in popularity is Murcia. In the past, Murcia has often been overlooked when compared with its well-known neighbours Costa del Sol and Costa Blanca. However, in the last year or so we’ve seen far more buyers become aware of the charms of the region, leading to a surge in sales. For an ultra-desirable Murcia investment property, check out La Manga del Mar Menor.
Start your investment journey with Spanish Legal Homes
If our article has given you some guidance on the potential options for buying investment property in Spain, and has perhaps encouraged you to start exploring this option, why not speak to one of our advisors? Our UK-based, Spanish property experts can advise you on all aspects of the buying process in Spain. Call us today on 01202 971614, or fill in our contact form.
For those ready to start the buying journey, our £99p.p. Spanish property viewing trips allow you to view 8-10 properties per day that suit your investment requirements. Learn more or book a trip today.