• Investing in Marbella Property. Does it Make Sense?

    Property Investment. Tips and advices.
    As the Costa del Sol property market continues its recovery, we are not only seeing buyers who search the perfectholiday or permanent home in warm and sunny Marbella, but inceasingly larger numbers of buyers who looking to the housing market here with an exclusively investment interest.
    There are three main categories of these buyers:

    Part- lifestyle and part- rental investment.

    These clients continue to make up a large proportion of overseas buyers in Costa del Sol. Many of them intend to use their second home in the sun for vacations throughout the year, to escape the colder northern European climes, but would like to rent the property during the high-season summer months to capitalize on the investment potential of their property.
    This is a strategy that many of our clients use successfully, with most of them able to pay all the maintenence feesfor the whole year simply by renting their properties for 8 weeks in July and August.
    How to do it: Most properties will rent successfully in the summer season if they are priced correctly. Make sure your property in nicely decorated and furnished, has a free WiFi (that is very important today, but still many homeowners can not provide it to the clients), has air-conditioning, satellite TV and fully equipped kitchen. 
    Pay special attention to: Community fee - if community fee is too high is can reduce your profit a lot. Also electricity and water bills. All these charges you have to pay yourself. So make sure you take these into account when you are doing your sums.

    Pure rental Investment.

    Some clients choose to buy their property on the Costa del Sol with the sole intention of capitalizing on the year round rental market, in a short-term market or the long term market for 11 months.
    Both of these options can be lucrative, but you need to tread with care. First, to be successful in the holiday rental market takes hard work and perseverance. The same rules apply. Make sure your property in well-presented and offers all the mod-cons.
    Also you property has to be well-located for winter holidays rentals. Many people think that buying property in a golf course, thinking that golfers will rent their properties in the winter season. This is not a really correct. Most golfers will pay in several golf courses during their stay and the last place they want to be in the evenings is stuck in a golf course. Generally speaking, if you can walk to amenities, such as bars, shops and restaurants, then your property will appeal to a broader client base.
    For investors seeking to attract a long-term rental client, the general rule of thumb is that you can expect to receive a monthly rent which is equivalent to the weekly rent you can expect from the same property in the high-season rent.
    How to do it: Find a reputable letting agent and speak about how the best to present your property. Also make sure that that agent not only find a client for you, but also able to provide you a full property management. In this case you can be relaxed and sure that your property in a good hands.
    Pay special attention: High montly community fees can really have a negative impact on yields, although long-term tenants pay their own utility bills. Make sure your contract with them watertight to avoid problems with sitting tenants.

    Off Plan Speculative Investment.

    This is an interesting one, and is only suggested for seasoned investors. A great way of making money is a rising, in demand market. Client reserve a property on an off plan development, let say, ready in 2 years time. They normally pay 30% plus IVA/VAT of the total purchase price as a deposit, and by securing the best located units at the most competitive price they can then capitalize on price rises during the construction.
    For example, if you reserve a property praised at 200 000€, and at completion the property has risen in value by 20%, the increase in price would equate to 40 000€, while the client has invested only 30% plus IVA is 72 600€. If he can find a buyer for his property prior to completion, the client can potentially make a very good return on their initial 30% investment without having to pay a penny more t the developer.
    How to do it: Make sure you invest at the lowest price and choose the best unit/s. These ate the ones that will be attractive when the project reaches completion.
    Pay special attention to: Make sure the reservation contract allows you to re-assign the contract prior to completion. Most developers don´t allow it or the going to charge a fee. And the most important, to avoid the worst case scenario, make sure you have sufficient funds to complete the transaction.
    Sean Woolley