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Buy to Rent Property in Marbella – Price Trends & Case of Study. Price Trends & Case of Study Estimation
Good signals from the market confirm that the increase in property value is expected to continue in the coming years. This is a great opportunity to invest in real estate in Spain!
Costa del Sol property market has consolidated its position as one of the leading lights in Spain. With the continuing price hikes, there’s no doubt that the current trend is up.
Buy to Rent Property in Marbella
It’s, therefore, no surprise to find that two of the most popular spots on the Costa del Sol with property buyers, Marbella and Estepona, have seen the highest price rises in the country. In addition, Los Monteros in Marbella ranks as the most expensive place to buy a home in Andalucia. Buy to Rent Property in Marbella – Price Trends & Case of Study
Still in Marbella, at the east end of the city has also experienced strong demand and as a result, prices have gone up by over 34% since 2019. The seventh highest in the country.
Estepona features in the eighth position with a 33.8% rise in property prices at Guadalmansa. This beachside district has a privileged location on the New Golden Mile and includes some of the best seafront properties in the area. Homes here cost an average of €3,700-€5000 a square meter.
If you are not resident in Spain, but you live in another European Union (EU) or European Economic Area (EEA) country and you rent your property in Spain, you will pay 20% on the net income, and be able to deduct deductible expenses in proportion to the time the property has been rented (e.g. notary fees, property tax, rubbish collection fees, etc.). In this case, the tax is called Non-Resident Income Tax (IRNR).
Finally, if you are a non-resident and do not live in another EU or EEA country, and you rent your property in Spain, a tax of 24% will be applied to the income obtained. In this case, expenses cannot be deducted. However, new 2023 law brings good news to Non UE residents.
The picturesque city of Malaga has 11 districts, that in turn are subdivided into 297 lively neighborhoods! Hence, it’s understandable if you’re having a hard time choosing the best place to set up a purchase in Malaga. Let’s check on Buy to Rent Property in Marbella – Price Trends & Case of Study
Apartment – 80-100m2:
Amenities
Distances from the apartment:
Apartment location:
We aim for the lower part of the highway (BAJA), and not necessarily inside the crowded city where is hard to find properties in this budget and requirements. Inside the city at this price range we can find apartments in higher buildings, many of them without parking, without a pool, and with small balconies or no balconies at all).
The apartment should be located in a quiet part of the city (urbanization)- It can also be a property that requires a car to the nearest shop (however it needs to be luxury to compensate for the distance to the beach). The garden and greenery around the apartment should create favorable conditions for relaxation and rest.
Example of Urbanizacion within walking distance to the beach – Estepona.
The value of the apartment – 200 000 euro
Taxes and fees associated with the purchase – 20 000 euro
Value of the apartment + taxes and fees – 220 000 euro
For purchase costs and transfer tax (ITP) in Andalusia, you normally need to count 7 to 10% extra costs. Always ask your lawyerfor a detailed offer and don´t leave the legal investigation or after-sales to the real estate agent to save costs.
From the beginning of 2022, We can give an overall look at similar properties put up for tourist rental. The guests of the apartment were mainly tourists from Europe. The apartments were chosen primarily by people who value peace and privacy but still wanted to enjoy the main attraction within the area.
Good price and quality translated into a large number of reservations. The apartments have standard check-in at around 15.00 and check-out at around 11.00.
The highest income is generated in the summer months July and August. we can distinguish three periods:
Alternatively, it is also a great time to use the apartment for your own needs.
In this case, the off-season apartment was shared with family and friends while the calculations will include the case when the owner decides to rent for a long term.
Assuming an income of 1300 euros/month for a period of 8 months, we are able to get such income while reserving the apartment for about 8 weeks for our own needs.
Buy to Rent Property in Marbella – Price Trends & Case of Study
January & February & May = 1300 euro/month
June & September = 3300 euro/month (165/night)
July & August = 5880 euro/month (210/night)
October & November & December = 1300 euro/month
| Period | January – May | June | July, August | September | October – December |
| Occupancy | 20% | 75% | 95% | 75% | 20% |
| Price | 1300 euro/ month | 3300 euro/ month | 5880 euro/ month | 3300 euro/ month | 1300 euro/ month |
| Period | High season (July August) | Medium season (June September) | Off season (January, February, March April May,October, November, December) |
| Occupancy | 95% | 75% | Long term |
| Price | 210 euro / day | 165 euro / day | 1300 euro / month |
| Calculation | 210 euro x 62 days | 165 euro x 55 days | 1300 euro x 8 months |
| Income | 13020 euro | 9075 euro | 10400 euro |
TOTAL INCOME FROM TOURIST APARTMENT – 32 495 euro
So when deciding to allocate an apartment in Spain for tourist rentals, we must take into account the costs of:
| Annual income – rental tax 32 495 euro (income) – 20% (PM fee 6499 euro ) – 20% (rental tax 5199 euro)= 20797 euro Annual income less property tax & and monthly costs 20797 euro – 450 euro (tax) – 2400 euro (costs) = 17 847 euro Monthly Income 17 847 euro / 12 months = 1487 euro NET Rental Yield 8,11% (online calculator here) |
By investing in real estate in Costa del Sol, you not only secure passive income, but also get a free apartment where you can spend long weeks.
We have not yet considered one more important factor that can also convince you to invest in real estate in Spain -an increase in the value of real estate over time.
If such a high rate will persist for several years then we can count on a really big profit in the case of selling real estate. For safety reasons, we can assume lower growth. Real estate price analysis show that in developed countries they grow on average at 1-2 percentage points above inflation. Bearing in mind the dynamics of the real estate market in Spain. We can expect a safe increase in property value of 2.2% per year. In next years, the projected rate of property value growth is much higher
Thank you for your interest in properties in the beautiful Costa del Sol! Please take a moment to tell us a bit about your ideal property.
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