Investment Property in Spain

Do you ever feel that money spent on annual holidays would be far more wisely spent on savings and investments? So what can you do? Give up your holidays for the next 20 years, feeling safe in the knowledge that all of your spare cash is being invested wisely in a bullet proof portfolio? Or is there a way to have your cake and eat it?

Could buying property in Spain for both investment and leisure be the answer? You would certainly have somewhere perfect for holidaying but what about the investment side of things.

Shelter Offshore discusses buying property in Spain for investment purposes.

Could your dream home in Spain be your best investment?

A quick search around the Internet and you’ll soon find plenty of websites that tell you how investing in Spain is a sure thing and you cannot loose - no sirreee. But let’s be realistic at this point, unless the person telling you this has verified clairvoyant skills, their guess is to a degree only as good as yours. 

All markets to a certain degree are cyclical, this means you may inadvertently end up buying high and selling low. Without knowing for sure what the property market in Spain will be like in 1 or 5 years there will always be a degree of risk. However with that said let’s look at the positive facts and information that we do have at our disposal.

The potential of investment in Spanish property

Rental Income - Buying a property in the best and most desirable locations will nearly always guarantee you a degree of resilience in the rental market. While many people rent in UK simply because they are saving to buy, or waiting for a property price dip, a large percentage of the Spanish rental market comes directly from the holiday industry - from short term rentals to long term rentals for retirees escaping from the cold grey British winters.

So it would be fair to say that unless global warming suddenly adds 10C to the winter temperatures in UK, or Blackpool suddenly experiences a guaranteed 3 month dry season, many will continue to opt for Southern Spain for a little guaranteed sunshine and blues skies.

Therefore, with careful planning it’s a pretty safe bet that any quality, well located property in Spain will have good potential for rental income.  Furthermore holiday letting in Spain may well prove to be more resilient than letting out property in the fickle UK rental market.

Potential Property Price Increases

When it comes to potential property price increases we really are guessing how long a piece of string is, however, Spain does have some big advantages over other European destinations that will always ensure it scores high in the desirable locations stakes.

Spain is local... Yes anyone from UK or Northern Europe can escape to Mediterranean sun drenched beaches in less time than it often takes to navigate a stretch of the M25. This in turn should keep demand high; proof of this has been seen to a certain degree recently. As Germany goes further and further down the road to economic meltdown and more and more German villa owners are forced to sell up and retreat - a sell out that could have potentially led to a large property market crash in Spain - there has been no sign of a crash whatsoever as eager Brits rush in to buy up more and more property. 

It would be reasonable to expect that Spain would continue to show similar levels of resilience while it’s European neighbours experience continuing economic woes.

Many of the best Spanish locations are full

It comes back to location location location again, if you can afford to buy in a highly desirable location with little or no room for further development then you can almost always be certain that property prices will continue to spiral. Never mind someone telling you that you can buy 50% cheaper 20 miles down the road, try telling that to a Knightsbridge property owner he’ll think you’re mad and totally missing the point. 

People will always pay a premium for desirable locations, wherever they are in the world.

The fun of owning a property in Spain

Wise people always spread their investments across various asset classes; however, should you decide that one of your larger asset classes should have a terracotta roof and swimming pool it will most definitely be one of your more enjoyable assets!

You can use it year in year out for that well needed sunshine break, it needn’t even stop ambitions of holidaying further a field with house swaps and other schemes always available, in fact the rental income in peak season will often go a long way to funding an exotic vacation.

Time to do a little property research

The perfect excuse for a trip to Spain - ‘Investment Research’ - find out where the up-and-coming locations are, see what the rental incomes are like for different property types, find out which property types and sizes are in most demand, and above all speak to as many people as you can who’ve gone before you. It never takes long to find the expat community in any Spanish resort, befriend them, they tend to be a sociable lot and are always happy to give some tips and advice to future Spanish property owners.

Good luck with your property investment hunting!

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