Investment property Spain
Due to the large number of foreign buyers and the still relatively low prices, the Spanish Real Estate market is an extremely attractive investment possibillity. Below you can find an explanation of how you can realise high returns on the investment in your property.
Price increase during the construction of a new development:
A new development has a number of price increases during its construction stages.
The first is when the company has received their building license and can start to build. The price is usually increased by 10% at this stage. When the show flat is finished the price is normally increased by another 10% and when the complex is almost finished, the gardens are being done and the pool is complete the price is usually increased again by another 10%.
Investors who are familiar with this process can use their money to gain a handsome profit. They can reserve one or more apartments off plan before the building license has been given. They usually have to put down 30% of the total purchase price during the construction with the remaining 70% paid by the mortgage. However, the investor has no interest in the final payment as they will usually sell the apartment before it is finished.
A simple calculation will show you that these investors can reach 80 to 100% profit on their investment.
Example of a good property investment in Spain:
- 1 apartment - € 200.000 purchase price
- Payments during construction (1 year) - € 60.000
- Selling price before end payment - € 250.000 (25% increase)- € 260.000 (30% increase)
- Profit in 1 year on your property investment- € 50.000 (85%) – € 60.000 (100%)
When you purchase from a good developer and the location of the development is good, i.e. at the beach or close to a golf course, you can accomplish these high returns as well. InmolinkMLS can advise you with the selection of the development and the developer and also guide you throughout the buying and selling process of your properties.
Contact us for more information about investment property in Spain or to organise an inspection trip.
