Investing in Spanish real estate: many good reasons to do it NOW
High quality projects at interesting conditions
The region around Marbella has a mild climate with 325 days of sunshine per year. The numerous flights of barely 2.5 hours from various airports in Belgium make this region very accessible even for a weekend. The exclusive Puerto Banus, the beautiful beaches and beach bars and the proximity of beautiful golf courses are all added values for the region.
Developers bring beautiful projects on the market in sublime locations at interesting conditions. When buying off-plan and certainly in the first phase very interesting prices are used.
Good return on investment through renting
Your return on investment is high, both as an investor and to supplement your pension. It is realistic to expect a gross rental return of 4 to 8%.
These are much higher and more stable than dividend income. Compare with average dividend income S&P (12 months figures June ’17): 1.93%.
An example calculation of rental income
A 3 bedroom ground floor apartment is for sale in first phase at 239.000€ (excl. costs)
- High season (July – August, Christmas, and Easter holidays): 1.250€/week
- Mid season (May, June, September): 1.000€/week
- Low season (other periods): 850€/week
The following can be considered realistic:
- 110 weeks high season per year: 12.500€
- 6 weeks mid season: 6.000€
- 6 weeks Low season: 5.100€
Total gross rental income: 23,600€/year.
Investment of 271.265€ (239.000€ + 13,5%) this is 8,7%!!
Added value on your property: the expectations
The Spanish economy is one of the fastest growing in the Eurozone. Spain’s economic growth will remain relatively strong in the coming quarters. Consumer confidence is rising.
The value of real estate in and around Marbella is rising steadily. Prices are rising and expectations speak of a monthly increase of 1% over the next 5 years, a compound growth of no less than 60%.
Investment options
The cash buyer is in a strong position because he can make purchases without consulting banks and can therefore trade quickly and sometimes get some extra benefits (discounts) from his strong financial position.
Mortgage credit. The bank finances a large part of your purchase and you invest a small percentage yourself. When the property has been partly or fully repaid, you can take that part back to buy another property with the first as collateral.
The alternative loan or investment loan. Your securities account is the collateral for your real estate. Depending on the level of risk, term and quality, a value is determined which stands for the value of the loan amount. In this way, you do not have to sell shares and you have no costs that are normally associated with the mortgage loan.
The bullet loan does not allow you to pay off capital but only interest. Your rental income reimburses your loan and you have the added value of your real estate.
Do you want more information about real estate in Marbella? Then don’t hesitate to contact us.
