The Costa del Sol attracts millions of visitors each year. In fact, in 2017, the holiday hot spot set a new record with 12.5 million international tourists choosing to spend their annual holidays on its beautiful beaches. That’s more visitors than have ever visited the region before.
With so many visitors, almost all of them needing somewhere to stay, it’s easy to see why the Spanish buy to let market looks so appealing.
When you invest in the Costa del Sol buy to let market you have a ready-made audience searching for the kind of property you have available. But is it all it’s cracked up to be? We examine the pros and cons of choosing the purchase a buy to let property in Spain:
- Whether you are buying a home to let to long term tenants or as a short-term holiday rental, you will benefit from a fixed regular income which you can rely on as part of your long-term financial planning. As the Costa del Sol continues to increase in popularity, you can also only expect to see the resale value of your property increase year on year.
- There is much lower financial risk in deciding to invest in bricks and mortar than in many other types of investment opportunities. The EU property market is also forecast to remain buoyant as a result of Brexit, whilst the UK property market is set to experience a significant dip.
- Before you purchase a buy to let property overseas it’s important to plan your exit strategy: what will you do if you decide you want to sell the property? Fortunately, there is only positive news on this front in the Costa del Sol, where property remains in high demand and the resale value looks set to continue to increase year on year.
- Think about tax. This can be considered both a pro and a con, and will need specialist expert advice. In the worst case scenerio you may have to pay tax on your income both in Spain and in the UK, but if the property is an investment, rather than for personal use then you can make significant savings by putting the property in the name of a company, rather than in your own name. Savvy tax advice could help you to maximise your buy to let investment.
- Finally, choosing a buy to let property on the Costa del Sol is a great option for potential investors who enjoy staying on the Costa del Sol themselves. If you plan carefully then you can arrange to let out your home to holiday visitors for the majority of the year, whilst staying in it for your own low-cost holidays. You could even let out your home during the high summer season, and stay in it yourself during the low winter season.
- If you decide to invest in buy to let property overseas then it is important to obtain trusted legal advice and to work with reputable realtors. Foreign property investment is unregulated by any British body; there is no Financial Conduct Authority to battle for compensation on your behalf if something goes wrong. Whilst you would be protected by local law, this can be difficult to navigate independently, particularly if you have no Spanish language skills.
- Although the Costa del Sol offers year-round sun, there is still an off season in the region where tourism numbers drop. If you are purchasing your property as a holiday let then it is important to calculate for an off-season where rental incomes will be lower, or you might not even be able to rent out your property at all.
- Location is everything. Be led by your head, not your heart and choose a property in an area that will be considered desirable by tourists. You may fall in love with that little villa in the picturesque remote location, but without transport links your property will be considered inaccessible by many visitors and you won’t be able to yield decent rental incomes.
- Many buy to let homeowners fail to consider the additional costs involved in purchasing a buy to let property: you will be responsible for the upkeep, maintenance, any service charges, and the costs of cleaning the property between guests. Even providing clean towels, servicing the pool and maintaining the lawn will add up to significant expenses over a 12 month period.
If you’re considering investing in a buy to let property in Spain then why not get in touch with our knowledgeable property experts? Their local knowledge and professional expertise will make finding the right buy to let property for you a breeze.