ARTICLE #20 – 26 NOVEMBER, 2017
3 Things You Need to Know Before Investing in a Property in Marbella.
Coast of Spain is alive and well
It is a fact – before you decide to invest in a property in Marbella, you need to know that the real estate itch on the coast of Spain is alive and well. It is not only families that are looking for their next home. Over the past few years, there has been an increasing number of buyers who have become interested in purchasing real estate as a way of generating a second income.
70% Buy to rent
According to a recent survey, over 70% of homeowners chose to rent out their property when not using it themselves. More than half of them bought the property for their investment portfolio and for the sole purpose of renting it out.
Renting apartment vs hotel
Another study carried out by Trip Advisor has shown that almost 70% of holidaymakers prefer to stay in rented apartments rather than stay in hotels as this gives them more flexibility and freedom. Here, at Marbella Club Hills we have also seen an increased demand for investment property. Here are some things you need to consider before you purchase an off-plan property on the Costa del Sol.
The 3 things you need to know before investing in a property in Marbella
- Use a trusted developer/real estate agent.
When investing in a property, especially if it’s an off-plan project, one must have a clear understanding of the developer’s past proceedings. It is absolutely crucial to know their background and to ensure they have a proven track record so that you know your money and future plans are in safe hands.
Marbella Club Hills is a project between two companies: MENA Capital and Marbella Club Group. MENA Capital is a well-established international property developer, who also owns an NGO that assists aspiring entrepreneurs and supports over 2,200 businesses with 90% rate of success. The Marbella Club Group is also a well-established company, owner of the prestigious Marbella Club and Puente Romano hotels.
2. Know as much as you can about the development
When buying an off-plan project, it’s a lot harder to picture what the property will really look like once it is finished (see our video). Independently of how accurate computer generated impressions of developments might be, the best thing you can do is to visit the actual development plot, check out where the roads are, work out where the property will be and what views you are likely to have. This will help you to create a more precise mental picture of the finished product.
3. Calculate your ROI before you buy your property
Before investing in a property it is important that you calculate the potential ROI. To get an estimate of the first year ROI, you need to subtract the annual cost including the interest you would pay from your total estimated net income from the property (which includes potential rental income, estimated tax savings, projected property appreciation and any estimated additional equity from renovations).
Buying a home is not a small decision, and while it can be a sound financial investment, there is a lot to consider, including the housing market, interest rates, timing and your future plans. Talk to our investment advisors and discuss your future property investment plans and potential earnings.