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Buying
Property in Spain for Investment
The
Costa del Sol property boom continues and as
new developments are released onto the market
there is the usual rush to reserve prime
apartments, those with the better views, those
with the extra space, the corner apartments,
the penthouses, etc.
Experienced
investors are first in the queue to inspect
the plans of new developments as they are
released to reserve the best units for a
minimal deposit and usually to resell them at
large profits long before building commences.
Currently
investing in property in Spain has shown
superb dividends. In the past 5 years many
investors, private and professional have made
gains of between 30% and 100% on money
invested within 12 months.
The
fact that profits far outstrip interest rates
has created a whole new market for investors
from all over the world. If you are
considering investment in Spanish property
then the following methods may be of interest
to you.
Investing
at the Planning stage for maximum profit.
For
serious investors who are not just looking for
a home in the sun, the Costa del Sol has
proved to be one of the most lucrative
property investment markets in the world,
particularly in the last 5 years. Many
investors, private and professional, have made
gains of between
30%
-100%
within 12 months on money invested.
Buying
new property anywhere, before or during
construction, and then reselling it as it
nears completion has nearly always been a good
investment. There are always buyers who will
pay more for a finished or nearly finished
property than they would for a property ‘off
plan’ or a green field site with a
completion date 1-3 years away. Nowhere is
this truer than on the coasts.
To
begin with you can start the process by
reserving a property with an initial payment
of 20-30% and then while construction
continues the resale value will increase. By
now most, if not all the new properties in the
development will probably have been sold and
at any time you can re-sell your option to buy
at a profit.
A
current example would be quality 2 bed 2 bath
apartment in a good location available from
200,000€, to secure a contract on this
development you would pay 27% - 54000€
The
delivery date on this would currently be 2006
so lets assume a conservative figure of 10%
annual Capital increase on the value of the
property, by 2006 the apartment would be worth
266,000€ an increase of 66000€ and up to
this point you will only have paid 54000€
this would show a pre expenses profit over 3
years of 122%
The
great thing about this type of investment is
that it is safe. All the money that you pay
initially is protected by a bank guarantee.
This means that whilst you may not make the
predicted profit figures you cannot lose the
money that you have invested
Investing
In Rental Opportunities
Up
to 8% annual return with 18.5% capital growth,
This
year the Costa del Sol will achieve the
highest rental prices for holiday
accommodation in the whole of Spain including
the Balearics and the Canaries. In August the
average monthly rental per sq metre will be as
high as 81.95€, which means the owner of a
60 sq metre apartment could enjoy a rental of
4,917€. But on the coasts the rental
opportunity is not a summer only phenomenon.
Unlike
many holiday locations throughout the
Mediterranean, The climate on the Costa Del
Sol means that there is no “off Season”.
Consequently,
your rental property will rarely sit empty and
should provide a substantial extra income as
well as the option of using it for yourself
and your family whenever you decide.
If
you’re planning to buy property for rental
purposes ADC can recommend you to the specific
areas and properties that attract the most
rental enquiries and best income.
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