Think you understand all there is to know about investing in Spain?

Investing in property in Spain has proved sound over many years, the value of homes rising on average well above the UK market. The reasons for it continuing to be the number one hot spot for British investment is many fold not least the Spanish way of life, weather, cheap and easy access from home, no real language barrier and of course its capital gains record and easy to arrange rental income.
The two main ways of investing are as follows –

BUY TO LET

When considering regular income from buy to let, one of the most important factors is location and the various deals that developers and agents are offering.

Many of Eden Villas’ clients are enjoying healthy returns on the investment through buy to let. This is a good option if you want to enjoy your own property in the sun whilst getting others to pay for it!
Spain has an active holiday rental market, offering good investment potential.

You can benefit three ways –

Rental income
Capital appreciation
Option to use for personal holiday.

CAPITAL OUTLAY v RENTAL RETURN

“ When looking for a buy to let property consider carefully the initial capital outlay as it is an important reflection on the number of weeks letting you may be able to achieve” says Craig. “If you have a fabulous, very expensive beach front or golfing apartment in a developed area, you can probably let it out 40+ weeks of the year but you will have paid a high price to buy and the overall income may be relatively low. If you choose a cheaper property, with a lower capital outlay and repayment programme, you may well find that the ratio of return v investment very good, particularly if you buy at the leading edge of a development cycle in places such as the Costa Tropical.”

BUY TO SELL

The traditional practice of buy-to-sell in Spain, in which investors who have placed a deposit (usually around 30/50% of the total price) sell on their option to purchase before completion of the property is becoming increasingly unpopular. This is due to the tightening of the regulations and the clamp down on the tax evasion that is commonly associated with this practise. As a result, a few developers and agents are exploring new ways to enable the investor to maximise profit on a relatively low capital outlay.

“This results in some great new opportunities for the creative investor to benefit from the natural increase in property prices in Spain,” says Craig Stocks of Eden Villas. “In fact we are currently negotiating an arrangement with one developer that will allow clients to place a 30% deposit on a property and pay nothing more for 5 years. The gearing on the capital growth for such an investment offers potential for a huge, low-risk return.”

BUYING IN BULK

If you are looking to invest fairly heavily abroad then buying several apartments off plan may be the way forward.

“Instead of taking the profits from the capital growth”, continues Craig, “an investor may choose to complete the purchase and then use the property for letting; achieving an ongoing income from buy to let.”

A GOOD STRATEGY

A good strategy can be to place deposits on several properties, taking the profit from some on a buy to sell basis, and putting this profit into the completion of sales on other properties which are retained on a buy to let basis.

CURRENTLY AVAILABLE OFFERING PARTICULARLY GOOD OFF PLAN INVESTMENT

Altos de Otivar – the best of both worlds. Altos de Otivar is an off-plan opportunity to purchase flexible townhouses or semi-detached villas at Cost Tropical prices (from €150,000), but very close to the expensive markets of the Costa del Sol and the increasingly popular tourist destinations of Almunecar. “Great investment for holidays, buy-to-let or capital growth, at a first time buyer’s price.”

For further information, visit edenvillas.co.uk.