With traditional saving accounts in banks providing very low growth returns. Investing in property can be an attractive prospect with average Spanish house prices rising by 4.68% in 2019 (Global Property Guide, 2020) and continuing to increase. Thanks to growth in the Spanish economy and a boom in tourism across the country, substantial rental price increases have occurred.
However, before purchase an investment property we recommend considering the points below and seeking advice from experts in the sector who know the market.
Do you require a property for renting out long term with a fixed monthly income or would you prefer a holiday rental that has the advantage of usually providing a higher rental income?
Holiday rental properties typically require more maintenance and management with arranging short stays for prospective guests and may not be fully occupied all year round based on seasonal demand. Also, with holiday home rentals, you will be required to furnish the property for guests and make sure they are professionally cleaned on a regular basis.
Should you buy in a large city or tourist area?
If you are looking to buy to sell for a profit in the short-term, purchasing in the city can be a safer option due to the property market being more active. However, purchasing in upcoming and established tourist resort areas can be a good option with the Costa Del Sol benefiting from warm all year round weather. Many retired people from abroad seek long-term rentals during the winter to escape the cold weather conditions in Scandinavia, Germany and the UK for example.
Fully refurbished or renovation project?
To attract prospective tenants or holiday guests, keeping a property in excellent condition is vital to achieving high occupancy levels. However, if you would like to embark on a renovation project, you must ensure the purchase price is low enough and does not present any hidden or unexpected costly complicated restoration work. Otherwise, you can soon exceed your initial budget, incur delays and ultimately lose money with your investment property that could take many years to recover.
At Qlupa we have extensive local knowledge with upcoming attractive property investments in both upcoming and established areas and can assist clients with managing rental properties for peace of mind.