Spain’s property market remains volatile amidst economic troubles across the Eurozone. Investors taking the long-term view, however, can find bargains galore at the Costa del Sol, which will bring in a good steady income from holiday letting and from long term rentals, too.
Resale properties in particular are very reasonably priced, even in Marbella. Increasingly desperate homeowners, who have lost their jobs or want to return to their country of origin to seek a better life with their relatives away from Spain’s economic crisis, are lowering their asking price in line with Spanish banks, which are flooding the market with repossessed, key-ready new builds.
Long term rentals in Spain typically mean at least a 5-year contract giving buy-to-let landlords are much safer investment than in the UK for example, where tenants are apt to move on after their initial 6 month short term rental contract has expired. A 2 bed, 2 bath apartment located in the centre of Marbella with access to a garden and swimming pool will attract a monthly rental of EUR 800.00 or £632, while a 1 bed, 1 bath apartment with gardens and parking space will typically bring in around EUR 400.00 or £316 per month.
Holiday letting is more lucrative but also more volatile, as the market is dictated by seasonal changes and foreign holidaymakers’ taste, which has become far more discerning over the last few years. A luxury apartment in the Old Town or Marbella’s city centre will attract around EUR 800 per week during the months of June, July and August, but just around EUR 550 to EUR 650 during the rest of the year. The same apartment might earn its lucky landlord as much as EUR 2,500 per month on a long term contract.
In Malaga’s Costabella district a 2 bed, 2 bath apartment with sea views will attract long term rental income of around EUR 750 or £592 per month, while a 1 bed, 1 bathroom flat in Nerja, which has a large British expat community, will attract long term rentals of around EUR 540 or £427 per month.
Older style developments with resale property can offer great bargains at first glance, but many of the properties need serious updating to bring them in line with modern tastes before they can be rented out short or long term - these additional expenses must be factored in together with exchange rate fluctuations and all taxes relating to the purchase.
About 1.5 hours inland in Granada there are also amazing bargains to be had. Granada is one of the world’s most famous university cities and therefore ideal for long-term investment. Holidaymakers also fall in love with the rich culture and heritage the city has to offer and many opt for long-term rental. Granada in the Sierra Nevada offers the advantage of being close enough to the Mediterranean to go for a day out at the beach and equally close to snow-capped mountains, where skiing can be enjoyed along other winter sports.
A 3 bed, 1 bath villa on the outskirts of Granada in the district of Lecrin might be as little as EUR 175,000 or £138,231. The villa has its own pool and is within an hour’s drive of Malaga Airport. With views over orange groves and marvellous countryside the villa is ideal for young families wanting to rent long term before committing to a property purchase in the area. With an interest only mortgage the monthly repayments for a landlord are just £432 per month.
Location is everything! Landlords know that only too well. Even if the tenant renting the home is a long-term holidaymaker, access to established services and amenities are crucial to attract tenants who will stay. The beauty about buying real estate in Marbella, Malaga, Nerja or Granada at the Costa del Sol is that everything is in place: from some of Europe’s best tourist attractions, best beaches, most favourable weather to plenty of choice with regard to the type of property an investor might be interested in.
Together with established services and amenities in the resorts these towns and cities are ideal for long-term investment.