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Investing in Costa del Sol Property

If you are looking to purchase a property or several properties in the Costa del Sol for investment purposes the following information will give you a thorough understanding of the advantages to investing here.

With the Costa del Sol being one of Europe’s most popular tourist destinations, the opportunity for investment is ripe.  The past decade has seen incredible growth in the region both in terms of infrastructure, and technological advances.  The vast majority of the Costa del Sol is now up to date with all the amenities that you or your tenants would need.  The ministry of tourism in Spain predicts that more than one million foreigners will purchase a property and or move to the Costa del Sol within the next six years, by the year 2025, this is expected to treble.

From an investment standpoint, analysing the Costa del Sol’s potential for return is facilitated by looking at the reasons why people wish to move here in the first place.  After all, even if you have no intention on moving here, you need to know why so many people want to, as this demand has been propelling the property market in the Costa del Sol forward to its current state.

Why do people want to live in the Costa del Sol?

Life in the Costa del Sol is often referred to as, “the dream lifestyle” for most Europeans.  Whilst most European countries suffer cold and depressing winters, the Costa del Sol (as with other coastal regions of Spain) is notorious for incredibly beautiful summers and mild, comfortable winters.  When combined with the relaxed attitude and atmosphere that the culture brings, most Europeans find that in the Costa del Sol, they can actually “relax” for the first time in yeas.

The year-round warm temperatures allow for a totally different lifestyle, whereby it is far more common to spend days and evenings outdoors, with over 26 golf courses within easy access, kilometres of unspoilt and well-maintained beaches with water-sports, and friendly sea-side bars, it is sometimes a wonder why anyone would stay indoors.  With many mountains and breath-taking scenery, walking trips and mountain-biking are other favourite past-times of people living here.  In short, with weather this good, who would stay inside?

With most European cities offering flights directly to Malaga airport, the Costa del Sol is always within short and inexpensive reach.  The Costa del Sol truly is the ideal getaway for any European.

The Investing Edge

World-wide, many people have lost all confidence in the stock market, and frustrated by their poorly performing pensions and savings plans.  They are now turning to global property investment in an attempt to finally provide themselves with a satisfactory (or in many cases, exceptional) return on their investment.  The Costa del Sol’s popularity has grown tenfold largely due to this insurgence of international interest in the area.

For the past decade, and still today, the Spanish property market offers good value for money and excellent returns. The market remains buoyant and there is little sign of change for the foreseeable future. Construction throughout the whole of the Costa del Sol continues relentlessly, and it is not uncommon to drive past a row of up to 50 cranes, quite a sight indeed. 

Property prices in Spain remain a good deal lower than those in most European cities such as London & Dublin, which allows those people to afford to purchase a second home or holiday home while still retaining their primary dwelling.  Under this scenario, many individuals choose to let out their Spanish homes for several months of the year, while retaining a rental income from their property, and still use the property themselves for a few months.

When purchasing property as an investment in Spain and more specifically, the Costa del Sol, there are two main types of purchases:

Off-Plan Purchase

An off-plan purchase is just that, the property is not yet built, or not yet fully built.  In most cases, you can avoid the full cost of paying for the property by paying a fraction of the full value ahead of time in instalments and selling the property on for a much higher price prior to project completion. There are literally hundreds of new developments popping up everywhere throughout the Costa del Sol every year, an excellent opportunity for the shrewd investor.

Re-Sale Purchase

Investing in property in the Costa del Sol via the purchase of an existing property is also very attractive to most Europeans.  Over the past few years, Spain had an average valuation percentage of 16.9 % in Resale and a 17.0% in new houses. Many investment opportunities are found in the resale market, and of course, you can actually visit the property prior to purchasing it to be sure that it will meet your needs.

How to capitalise on your investment?

An enormous rental market is now developing in Spain and any investment property with good rental potential can achieve excellent returns.  The Costa del Sol is a top choice for tourists who enjoy a variety of self-catering accommodation, apartments and private villas. In many cases, especially for the summer months, it is possible to rent your property for much more than the costs, and enjoy the annual increase on property value.

A direct contrast to other European cities where the costs of first home purchase are astronomical, in Spain, young investors can afford to buy.  A new trend in the past decade has seen young under 30s from around Europe getting into the property market for the first time by purchasing an investment property in the Costa del Sol.  With more and more young people purchasing here, the property valuations keep rising.  The foreseeable future sees no decline in this, both in the popular coastal resorts as well as in easily-accessible inland regions. The Costa del Sol has a stable and mature property market, while prices have risen by 48% in the past three years.

Other key factors

European Community – Now thanks to the EU, there are no longer restrictions to living and working in Spain, and the process of moving to the Costa del Sol is relatively painless.  No longer just a holiday destination, the Costa del Sol is now an extremely attractive choice for relocation. With high standards in health, education and social services, the Costa del Sol is very attractive.

Demand for land – The Costa del Sol enjoys spectacular views and many mountainous regions.  With the growth of the past decades, and expected future growth, the amount of land available is declining rapidly.  With this, of course will inevitably see the rise of land values in time as the demand increases and the supply dwindles, a situation any investor would desire.

Building Quality – New laws and regulations have seen a change in the building quality in the Costa del Sol.  To cater to the needs of the property investor, no longer are high rise concrete jungle resorts being built, instead, high quality developments made of sound construction are being built often within an urbanisation with all the luxuries one could ask for.

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