Investment, is it the right moment ? The number of visitors and real estate sales is rising. Is it a good idea to invest in the Costa del Sol? For the first time in the Andalusian tourist history, there have been reached 50 million hotel overnight stays. This statement comes from Andalusian Minister President Susana Diaz.
This number is over 7% more compared to the last year. Amazing is the rise of British hotel guests, with an increase of 17% and this despite the Brexit.
When it comes to buying a property, the situation is similar. In the first six months of 2016, real estate purchases rose by almost 13 percent compared to the first half of the previous year. These are the highest sales figures since 2008. Nearly 40 percent of domestic purchases are made by buyers from other European countries. Often these are buyers who own more than one property on the Costa del Sol.
These are buyers who, by information on the real estate market and the situation on the Costa del Sol, have realised, that the last 4 years were favourable to invest. European residents have drawn a logical conclusion from ever increasing numbers of visitors and rising real estate prices. One circumstance that no one has foreseen is the regulation of the market of holiday lettings in Andalusia, whereby thousands of properties are now no longer available as letting objects.
Properties that has been bought by investors during the last few years and bought for the purpose of vacation rentals only, now bring a return of eight to twelve percent gross. These are properties, what offer sea view and situated in a nice Complex right on the beach. In addition, the property should have a tenant history after at least three years. These should be tenants who always spend their holidays at the same time and at the same place. At the end, it also saves the reservation cost through real estate portals, what can be up to 20 percent of the rental price.
An advantage of the Costa del Sol as a destination for this type of investment is, of course, the independence of seasons. The families provide the rental income in summer and the golfers – during the remaining months.
One should, therefore, have a tenant’s list after three years, what guarantees rentals at least for 10 months a year.
The possible sale is a further important point to consider such properties as an investment. If the property meets the criteria of having the best location and a perfect rental history, this property will generate a sales price at least more than 20 percent of a comparable property.
Those properties have a very high demand and not staying long on the market.