Can I Still Make Money from Investments in Costa del Sol?
The Costa del Sol has always been a popular tourist destination for foreigners based in Northern Europe, especially in the UK. It has also benefitted significantly from the amount of foreign investment it has attracted over the last few decades. So can we still get significant value from property investment in the Costa del Sol today?
Many people predicted that the Costa del Sol would see a developing negative trend in real estate over the next few years, causing the average foreign investor to think twice before throwing their money at Spanish real estate. However, statistics seem to show that the Costa del Sol hasn’t lost its appeal, with a vast number of Europeans still travelling south in search of warmer climates every year.
Investment Opportunities Thriving
Investment opportunities in the Costa del Sol have been well documented for many years. Foreign investors have thrived on the real estate opportunities presented by southern Spain with such a huge influx of tourists and new builds taking place throughout the area. What’s more, real estate seems to provide a highly secure investment option wherever you go and the Costa del Sol is no exception.
Without a doubt we have witnessed some truly mesmerising price rises over the last twenty years in Spanish real estate. Coastal areas in particular have been particularly lucrative for investors due to the highly attractive locations. The Costa del Sol has witnessed outstanding growth for decades as a result of tourism in southern Spain, thanks to advertising taking place outside of the country.
The Costa del Sol has been thoroughly advertised throughout Europe and especially in the UK, usually through standard travel advertisements depicting warmer weather conditions and TV shows dedicated to real estate and property investment. It seems evident that the booming interest in the UK and Europe has contributed significantly to the demand for property in the Costa del Sol.
One of the biggest selling points for the Costa del Sol is its pleasant climate, stunning properties and beautiful beach resorts. For this reason, many people have made the Costa del Sol their annual holiday destination for over twenty years. Northern Europeans looking to relocate to the Costa del Sol contribute significantly to the property development scheme in southern Spain, which is another reason why foreign investment remains so popular.
Whilst the housing market in the UK has suffered somewhat over the last decade, investments in the Costa del Sol have risen which has led to a booming property market with rising house prices. Due to the fact that the housing market in the Costa del Sol has been so much more stable in recent years, it has proven to be a reliable investment for foreigners in comparison to other destinations across Europe.
What the Statistics Say
Statistics show that foreign investment in the Costa del Sol is by far the most attractive option for foreign investors. Property in the Costa del Sol accounts for nearly 40 percent of all tourist properties and holiday lets in southern Spain. In addition, house prices in the Costa del Sol have risen by almost 90 percent since the early 90’s.
Another reason why so many foreigners decide to invest in the Costa del Sol is down to the number of jobs that have been created as a result of the property building scheme carried out over the last few years. With construction rising by nearly 10 percent, over a million jobs have been created as a result.
So who exactly is buying all these properties and why are they in such high demand? It’s understood that the vast majority of foreign property purchases in the Costa del Sol are from British enthusiasts, who make up over 50 percent of all foreign buyers. Around 300,000 Britons currently stay in Spain for a year after purchasing property, whilst Barclays bank have stated that many more of the British population plan on making the trip south in the near future.
Property Investment Alternatives
As you can see, there are many reasons why the Costa del Sol has and still will be a huge success for foreign investors. However, other forms of property investment in the Costa del Sol have proven to be even more lucrative in recent years, including off-plan investment opportunities.
Off-plan properties are unfinished properties that are invested in before the build is complete. With lower prices before a development is finished, it is possible to achieve incredible returns from an off-plan investment, with realistic returns raging from 50 to 70 percent.
Another lucrative investment to watch out for is an off-plan property that is currently under ownership from an investor who is struggling with financial difficulties. If the purchaser is unable to see out the construction of a property and is forced to sell in order to get it off their hands, you can make a substantial profit on the actual value of the property.
What to Watch Out For
There are many things to watch out for should you be interested in making an investment in Costa del Sol real estate. Firstly, many companies may try and offer you off-plan opportunities with a guarantee of renting it out after the sale is complete.
These companies are usually completely trustworthy and will carry out the rental process as planned, however there are many that simply fail to achieve tenants and won’t get you to returns that you expect. Always make sure you check the background of any company you approach or are approached by thoroughly before considering an investment.
Mike James is an intrepid explorer and loves to visit as many places in Spain during holidays as possible. With Valencia and Granada at the top of his favourite locations list, Mike has a background in the property industry and often writes about his experiences for Panorama Properties, a Marbella based real estate agent.