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Buy to Let Homes on the Costa del Sol

Buy to Let Homes on the Costa del Sol


What you need to know if this is your plan, as it appears buy to let homes on the Costa del Sol are becoming increasingly popular again.

Buy to Let Homes on the Costa del Sol

Buy to Let Homes on the Costa del Sol

Spain is now seeing a lot more interest in investors targeting the buy to let market. These investments are being made right now while the current market is still offering low pricing costs for properties. The buyers are foreign and the strength of their own currency makes buying for investment an attractive proposition.

A little like have your cake and eat it scenario.

The annual yield has increased from 4.7% in 2013 to 5.3% just now.


People are choosing Spain as the smart option.

There are so many people looking to get themselves on the property ladder. Buying in Spain may make it more possible for them than trying to obtain mortgages in their own home countries. It’s a plausible solution.

Other countries see first time buyers struggle to obtain a mortgage loan from their banks and the rising property prices force young investors out of the market. How many of you are in this position right now?

Have you ever thought what the age of a first time buyer is? You’d be surprised; a first time buyer comes in at 36 years of age!

So buying in Spain could very well be the start of their future investment and gives more assurance and credibility for them in their own country.

Costa del Sol Holiday Lets

Using your new home for holiday lets and make money from it when you are not using it.

There are some steps you must make to ensure you follow the current laws. Just make sure you register your home with the Junta de Andalucía, otherwise you could end up being fined and steeply as well. It would be silly to receive a €150,000 fine for not presenting your licence. Andalucía are still at the draft position with the laws governing holiday rentals. They have said it will be made available in the 1st quarter of 2015.

Homes for tourist use – Viviendas de Uso Turistico was a new law introduced last year. Already in place were laws governing rural holiday homes – Viviendas Rurales.

It covers short term rentals up to one month, otherwise you will be covered by the LAU  (Ley de Arrendamientos Urbanos).

So, if this is still a valid option in your mind and you don’t feel overwhelmed at the prospect of dealing with Spanish banks and legislation you will be pleasantly surprised to realise preparing your new home for renting is all fairly straightforward. You will need to look at the:

  • Licence Fee
  • Insurance
  • Tax 

Licence Fee

These vary from regions and local council you are looking at around €177 – €500, it is a fee based on the number of guests that can occupy your premises. It’s a one off fee. Not a huge outlay and you would more than make this up in holiday season when your guests are booking you for holiday breaks.


This is public liability for your guests and their belongings whilst staying in your home. This protects your own interests as well. You might need to cover damage done to the property or if you fall victim to robbery.Tax

There is no escaping tax wherever you are. Don’t be afraid of it! It’s simple, just declare the rental earnings. Spain is stepping up to the mark on the undeclared revenue on Holiday Rentals.

This applies to Holiday letting; you can also consider long term rental contracts. In Spain you can make a long term contract for up to 11 months. Of course your tenant can continue to live in the property after this time.

Málaga the Tourist Destination

The Province of Málaga sits comfortably in the middle of other tourist destinations with a 5.3% yield, although a little behind the 5.9% yield you would expect from Gran Canaria, but certainly ahead of the major cities of Madrid and Barcelona where respectively you would expect yields of 5.1% and 4.7%.

Changes in local laws for beach side properties are worth taking note of as well.

The Province of Málaga will always be popular with Tourists. Investing can make you a comfortable profit. Your mortgage may very well be covered if you are prepared to share your home with others and look at it more as a business venture.

Banks Lending Mortgages


The confidence portrayed by the banks and the offer of mortgages is a strong indicator everything is set to stabilise in Spain and your investment will be positive for the future. Property at hugely reduced prices have sat on the market awaiting buyers for a number of years, but the banks weren’t prepared to offer the lending to secure them. So while the prices are still relatively low it makes perfect sense to act on this now. New figures in November 2014:

Andalucía have seen the highest number of mortgage concessions = 3,183. 

November 2014 has seen a 12.2% increase from the previous year of mortgages granted.

Mortgage Rate Drops in Spain

Last month Euribor rates fell from 0.323% – 0.270%, with the average 0.298% for mortgage repayments in comparison to the figures of 2014 this is a drop of 0.264%.

The Spanish banks are competing for your business to take out mortgage loans so shop around for one that suits your needs.

Commercial Business Investments in Spain

Whilst non residential property is higher in European cities investors may look towards Spain as an option to locate offices, launch business or get a foothold in the Spanish business world.

Buy to Let Homes on the Costa del Sol

Looking for offices in Málaga? A very attractive work life balance!

The yield for office space is higher than in the domestic market with an average of 6.7% and in retail slightly higher at 6.9%.

Spain is set to lead the growth in this field over the next five years, with emphasis on Madrid, the countries capital. The growth is expected to be a further 10% this year, so 2015 holds promise.

Retire to the Costa del Sol

Buy to Let Homes on the Costa del Sol

Invest your Pension in Spain

Changes in the UK mean that you can access your pension in a lump sum. UK pensioners would stand to make more return for their investment by cashing in pensions and buying a home in Spain. A number of the retired population from colder climates choose to spend winter months in Spain or retire their lifestyle here full-time, either way they are set to make more from their pensions by opting to free them up and buy in Spain.

Historically the trend is to buy on the warmer coastal areas, such as the Costa del Sol, we can’t see a change here.

The Spanish Lifestyle beckons you!

The Spanish Lifestyle beckons you!

The Spanish Lifestyle beckons you!

So there we have it a number of ways to access the Spanish property market and a variety of potential buyers all with a common denominator to make a profitable yield from their investments.

  • 1st Time Buyers
  • Commercial Business Investors
  • Pensioners

Published in Costa del Sol Property News |