IF you are lucky enough to have some money to invest, it can be difficult to know what to do with it. Interest rates are low and leaving large amounts of money in the bank can seem like a waste of investment potential.
For many people putting their money into property is a good alternative. If you decide to buy a property in Spain you have either the option of enjoying your assets for yourself or by renting them out to provide a monthly income.
Buying a property rental has become an increasingly popular way of investing money and the practice in Spain has grown steadily, particularly in the coastal areas. With property portals such as Booking.com, TripAdvisor and Airbnb, renting out has never been easier or more convenient. Whether you choose a virtual option or prefer to use an agent there are several reasons for opting for the Spanish coast.
British buyers usually find the purchasing process to be relatively straightforward as there is no requirement to be a Spanish resident to buy property. The country actively encourages foreign investment in the property market where a Spanish NIE (Tax identification number) along with a bank account are the main legal requirements.
Uncertainty about the final Brexit agreement is causing some Brits to delay their property purchase until it becomes clear as to exactly what deal will be made. Although it’s unlikely that the current situations around mortgage lending or property rights are set to change there are a number of question marks about future healthcare and pensions.
So if you’re thinking of making the move to make the most of the laid-back lifestyle and lower cost of living, here we explain why now is a good time to buy a property in Spain.
1. There is a large pool of people waiting to rent
As the coast is a tourist destination there is no shortage of people interested in renting property for short periods of time. During the summer season there can be a particularly high return especially during the months of July and August. Many areas are seeing a shortage of property to rent during these periods.
It is not only holidaymakers who need to rent property. Some people prefer to rent on a longer term basis to people who are living and working in the area. This requires less administration although the rent will need to reflect the fact that you have an all-year round income.
An increasing number of pensioners are also preferring to rent a property to live in rather than buying. This is particularly the case where they are still in the process of choosing an area or are dividing their year between two countries.
2. It’s a busy market
According to the publication ‘Inmodiario’ property purchases in Spain by foreigners totaled 13% of the overall market in 2017. This figure reflects the trend across Spain but some areas, such as those on the coast, were even more heavily weighted towards the foreign market. In the Valencian community 27.44% of property was bought by foreigners.
What this means for you is that there are plenty of properties changing hands, a situation much improved since 2008. The construction industry is back on its feet and there are plenty of new and resale properties available. But don’t think for a minute it’s just a buyers’ market. In some parts of the country there is even a shortage of property to buy! If you are considering or would like to sell your property on the Costa Blanca, please contact us today to arrange a free valuation.
3. A favourite with tourists
Whilst some other popular countries have struggled to remain attractive to tourists, Spain continues to hold its own as a holiday destination. Managing to stay free from political turmoil and with proximity and flight availability in its favour, people continue to flock to Spain.
Now, many towns are looking for ways to ensure sustainable tourism. They want to continue to support the local economy with tourist income whilst also preserving the nature of the town and ensuring all-year round employment.
Torrevieja for example, has been promoting sports tourism, the beauty of its own natural lakes and the history and intrigue of the salt industry, to bring people to the town during the autumn and winter seasons. This is all to the advantage of those looking for a regular annual income.
4. A variety of homes
Whatever your budget, it is likely that there will be a property on the market that suits your budget. From a bargain apartment to a luxury villa, there are many different types of property for sale so can decide where to place your investment. Some builders have recently focused on the luxury market and purchasing one of these properties will ensure that you can ask for a very substantial rental fee.
5. Perfect for retirement
Spain is loved for it’s vast and varied holiday destinations and is also a favourite for those looking to retire abroad. Pensioners and those nearing retirement, continue to dream of the day they can put on the flip flops and enjoy the Spanish sun at their own speed.
Many however do not wish to lose their stake in their country of origin and retain their main home and rent for a few months of the year, or all year round, in a Spanish town. This provides the perfect long-term rental opportunity.
From these five advantages you can see that buying a property in Spain to rent can be a sound investment decision.