Making money from your property in Spain
There's just one thing better than owning a holiday home in
Spain - and that's making some money from it too. .
The buy-to-let market may be struggling in the UK, but in Spain,
given a good property in the right kind of area, the demand for
holiday rental properties is still high. So any income generated
from buy-to-let is a bonus beyond the capital appreciation you
can expect from your investment, which is currently predicted to
be about 10% on average in 2005.
Spain is still the favourite place for investors hoping to
combine pleasure and profit by buying a property that they can
then rent out. And the Costa del Sol and Costa Blanca are the
places that attract the greatest number of holidaymakers looking
to rent a property in Spain.
Some buyers invest purely for this purpose, perhaps as an
alternative to investing in a pension fund, but with no
intention of using the property themselves at present. Other
buyers find it a useful way of financing the purchase and
ongoing costs by renting out their house when they are not
staying in it.
Despite what you may be told about 'year round rental
potential', be realistic about how much you can rent out your
property. The average period that a Spanish property is let out
is 10 weeks a year. This, of course, will be far higher for a
well-maintained and desirable property in a popular holiday
area, and less for something in need of a repaint and a long way
from the beach, amenities and transport.
Though bear in mind that in the most popular resorts, such as
Marbella, the competition for rental properties is immense - and
there may be little to distinguish one two-bed, two-bath
apartment on a beachside complex from the next.
When buying, be clear whether you are buying solely for
investment, or partly for your own use. This will clearly affect
what kind of property you buy - and if buying for both purposes,
you may struggle to work out whether to compromise on the
aesthetic or financial element to make the most of your
purchase.
If your taste naturally sees you roaming into the wilderness of
inland Andalucia, be realistic about just how many holidaymakers
will want to stay somewhere that remote and appreciate the same
rural charms as you.
For pure investment, a golf property on the Costa del Sol is a
pretty safe bet, and Marbella - within 45 minutes of Malaga
airport, and with numerous courses within a 40 minute drive - is
a good option. A similar property on the Costa Blanca, near
Alicante, will cost less and capital appreciation will be less,
but there is still a huge golf holiday market to tap into there.
Another important decision is whether you intend to let out your
property for long periods (eg. 6-12 months) or on a short-term
basis for holidaymakers. This will be determined by how long you
want to stay there yourself - and how much hassle you can
handle.
Holiday lets may bring in tempting income -