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A villa with private poolThings to Consider

Many of our clients are buying property in this part of Andalucia for their own holiday use, retirement, investment or a combination of all three. If your aim is to make a sound investment, there are a number of objective considerations:

  • What are the prospects for the area?
  • What is the investment growth potential of a specific property?Are there still bargains to be had?
  • How will I ensure that the property is well maintained?
  • Who do I want to target to rent the property: Spanish holidaymakers, other nationalities or locals?
  • How well connected is the area, both internationally and locally?
  • Are there any other things I need to consider?

Prospects for the Area

The Spanish Algarve is very much an 'up and coming' area. It has begun to attract increasing amounts of discerning foreign holidaymakers; certainly the media is dedicating plenty of column inches to the opportunities available here. Apart from it's natural beauty and authentically Spanish feel, the Algarve to Seville motorway was just completed in 2004, which has made the area unbelievably easy to access.

A view of Ayamonte

For years this has been the Sevillianos destination of choice, which has ensured a good basic infrastructure is in place. Wanting to avoid the over-development seen in some of the other Costas, the Andalucian government has now put in strict rules for the region. Limits to development are ensuring that the area maintains it's real Spanish ambiente. An important point to consider is that the intention is to continue to support the native Spanish holidaymakers and the indigeneous fishing industry, a factor that will undoubtedly ensure any growth continues at a reasonable and sustainable level.

Investment Growth Potential

With over twenty years' personal experience of the region we realise that there are still pockets that are considerably undervalued and may achieve even higher growth rates than the area as a whole.

Your rental returns from a property can never be guaranteed, and need to be assessed carefully. If you are looking to maximise your yield, you need to try to achieve as long a season of rentals as possible: Andalucia Rentals specialise in offering rental property in this area.

Property Maintenance

There are advantages, and disadvantages, to buying in a Spanish community maintained zone or apartment block. Whereas many issues will be resolved for you, you will lose ultimate control over the standard and cost of maintenance. Each potential investment needs to be discussed on an individual basis.

Please see our property management page for further details.

If this is an investment property you will need to consider what happens when you come to sell

Target Rental Markets

Spanish holidaymakers flock to this area during the months of July and August, especially the inhabitants of nearby Seville. The sorts of properties favoured by the Sevillianos differ significantly from those requested by foreign holidaymakers. If you purchase a property which will appeal to the locals you have to bear in mind that this may be of limited appeal to other nationalities, so you are likely to have income from the property for a short time each year.

Travellers from the UK and Europe are looking for something a little different to the Spanish. The average traveller is looking for a villa or apartment, as close to the beach and all amenities as possible, ideally with access to a swimming pool as well. Those are the obvious items to have on your 'shopping list', but are there any other factors? If you want to maximise the letting potential of your property you will want to make it an attractive proposition all year round, so central heating and open fireplaces would be good things to consider - there is plenty of potential for off-peak bookings, as there are so many year-round sports (and other) activities available in the area. Holidaymakers are looking for a touch of luxury, so don't skimp on furnishing, fixtures and fittings, as quality and comfort will ensure repeat bookings and recommendations to their friends.

Sunset at the bridge, Ayamonte

If renting to locals long term, maintenance becomes an even greater issue, although it does ensure income throughout the year. Please discuss this possibility with our Andalucia Sales team.

Accessibility

Road connections in the area have seen marked improvements in recent years. A recently constructed stretch of motorway, linking with existing Portuguese motorways, means that area is only 45 minutes away from Faro and an hour away from Seville and their international airports. National carriers and low-cost airlines serve the area from most of the major cities in the UK, Ireland and other European countries. You can have breakfast in the UK and have your lunch on the Spanish Algarve. One of the great attractions is that it serves as a great base to explore both Spain and Portugal.

Other considerations

If this is purely an investment property you will need to consider what happens when you come to sell:

  • Capital gains tax (known as 'plus valia') is calculated on the gain in the properties value since you bought it; for non-residents it is 35%.
  • For residents under 65, who have used the property as their principal home for at least 3 years and plan to buy another home in Spain within 3 years, are partially exempt from Plus Valia; they will be taxed only on the amount that is not re-invested.
  • Plus Valia is not charged on property that is sold off plan before completion.
  • VAT on rental income is 25%.

Please note that the information we give here is intended for guidance only. To the best of our knowledge it is accurate at the time of writing, but you should always seek professional advice in these matters.

 

 

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