15
May

Investing In Rental Properties In Spain

Friday, May 15, 2020

Many of you are probably considering to purchase a property in a different country and investing in real estate. You have probably heard that real estate is one of the best investments you can make, and that is absolutely right, but there are also many factors you should consider before you purchase a property for rental in Spain.

The first and most important question you must ask yourself is whether you want to rent your property for short term or long term? This one decision changes practically everything so carefully consider your options.


Here's what you should consider:

With short term rental your golden key to success is a good location, where? The coast. Owning a property on the coast instantly increases the occupancy of property and rental income. People fly to Spain to catch the sun, go to the beach and simply relax. You must select a suitable location with all basic amenities including shops and restaurants but the most common factor all tourists look at is distance to the sea.

Of course when looking at purchasing a property on the coast you must prepare a suitable budget, as these properties won't be cheap. In fact the higher the investment, the higher the return on investment. You can purchase a property and need to do some serious renovation before you can use it for rental. Remember that each property must have all basic amenities, and also look good enough so people choose your property. Orientation is also an important factor. Everyone wants to have some sunlight shine through the window, and not look at the back of another apartment or someone else's terrace. If you find a property with sea views, good for you! Maintaining your property is also key. You must also ensure it is kept in high standard, clean and with a little wow factor for the tenant, why not a bottle of champagne? Make sure your tenant remembers you and wants to visit again!


Now the next thing to consider is how do you plan to keep the property occupied, because without sufficient occupancy your investment won't pay you back. If you think that simply placing your property on websites including booking.com or airbnb will do the job, let me tell you now - it won't. Your property will be placed among hundreds if not thousands of others, and you have no guarantee that it will rent enough, if it does then you must be lucky, however luck is no good in business. You must put in hard work to keep your property occupied, and this takes a lot of work and time.


Well, as you can see operating short term holiday rental is not easy and takes a lot, but take our word for it, it will pay you back! Short term rental generates four times more income than long term rental, even now in the situation of a pandemic if you rented your property for the remainder of the weeks possible, your income would be double the amount you would make with long term rental.


Of course some of you may not want the hassle with short term rental and simply want an additional income stream that will flow month by month to your account, well long term rental is for you!


With long term rental you must take other factors into consideration before purchasing a property:

Your tenants won't be tourists, so the location doesn't necessarily need to be the coast. What's most important is the urbanisation, it must be a safe place to live, close to shops, of course jobs, maybe universities if tenants will be young students. Overall it must be a location where there is normal life, not a tourist destination with only bars, clubs and restaurants and nothing else. Your rental income will depend on the location, if your property is in a desirable location with everything at hand, your property will definitely be considered to live in.


In relation to the budget, again you must carefully plan how much you are willing to spend. If you spend thousands on renovation and only receive €600 or €700 per month, then it will take long time for your investment to return itself, don't even think about any profits. If your property is situated in a good location and kept in good standard, make sure you take a reasonable price, do your due diligence, check how much owners in the same location take for long term. Remember, you are investing into the property to benefit from it yourself, no only the tenant.


Once you have the perfect property, you must find a suitable tenants. Don't be fooled by foreign people who come to Spain and say they came to move here for long term and they will find a job soon, most of the time they are lying and simply want to pay less and move out after their vacation. Many who arrive simply want to just enjoy the sun, relax on the beach and spend time with beautiful women instead of finding a job and thinking about responsibilities. Before you sign a contract with any tenant do your own background check, do they have sufficient funds? a stable job? With short term rental on the other hand you are more safe as all tenants pay in advance, and after their short vacation they will go home, but with long term you won't get rent in advance and the risk with late payments or none at all is higher.


As you can see investing in a rental property in Spain takes a lot of consideration, and your decision about short term vs long term changes everything.


At Lux Estate Capital Group we focus on operating short term holiday rental with luxury properties in one of the most famous areas in Spain, Marbella. Using our refined business model Rent-To-Buy 2.0, we're able to purchase properties for up to 20% of their market value and this allows us to generate high returns from a minimum investment. We select only the most exquisite and luxurious properties to ensure we attract high profile clients and develop profitable rental businesses that will significantly appreciate in value in a short period of time.


For our business we have specifically chosen Marbella as our location, as Marbella is one of the most exclusive places around the globe attracting many businessmen and celebrities who visit for personal stay or business.

To rent our properties we use our private Luxury Concierge Marbella platform directed to high profile clients to whom we not only provide accommodation in the finest properties, but also provide additional premium services including private jet charter, exotic cars with chauffeurs, chefs, security and more. At all times we ensure to fulfill all the needs of our clients, and of course provide profits for our company. During this whole time we also allow our Members to benefit from what we do, and earn stable monthly income from their Membership with us.


Now its your time to decide what you will do. Short term vs long term? Do you have a specific budget? Did you do your due diligence? Pick the right location? In the next article you will find out the exact procedure for purchasing a property in Spain.

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Friday, May 15, 2020