A perfect property investment in Spain balances the potential for appreciation, steady cash flow, and manageable risk. We have the deal that just might be the perfect one for the right investor.
First, here is a link to the property we are talking about.
https://equityreleasespain.com/listing-3-bed-2-bath-house-in-puerto-lumbreras-14974.html
Here are some key factors that make this deal a successful property investment:
Location: Some say, this is the most critical factor in real estate investment.
Puerto Lumbreras is a municipality located in the southeastern part of Spain, within the autonomous community of the Region of Murcia. It is situated near the border with the province of Almería in Andalusia. The town lies along the Guadalentín Valley and is strategically positioned on the main route between Murcia and Andalusia, making it an important transit point between the two regions.
Puerto Lumbreras is known for its rich historical and cultural heritage, with a variety of monuments and archaeological sites. The town is also close to the Sierra de Almenara mountain range, offering scenic natural landscapes. Its proximity to larger cities like Lorca (approximately 15 kilometres to the east) makes it accessible for both locals and tourists.
Property Condition: A property that requires minimal repairs or improvements is often more attractive, as it reduces initial capital expenditure. However, properties that need renovation (if bought at a discount) can offer substantial returns if managed well. This particular property as well as being well-minded, has so much potential if developed. There are plans to build a "granny flat" with a separate entrance. The current owner just does not have the energy for it right now. Maybe when you move into the property you will enjoy running their almond farm that is attached to the house. Maybe you will run air BnB from the property? Do you think a detached property in the Spanish sun, with a pool and a huge garden, will attract visitors? You bet it will!
Rental Demand: If the goal is to generate rental income, choosing a location like this where there is a strong demand for rental properties is key. A high rental yield of 8% ensures regular cash flow, making it easier to cover costs like mortgages and maintenance.
Affordability and Financing: Now, this is where this property shines. Ensuring that the property is within your budget is crucial. Securing favourable financing terms can enhance the return on investment. Lower debt costs increase profitability and reduce the risk of financial strain. With all of that in mind, we have secured the following terms: Downpayment 55,000 euro. Monthly payments of 925. Balance on the maturity of the deal. You cannot simply cannot get better terms. The Americans call it owner financing, effectively the owner acts as your bank, without any set-up fees interest payments or costs. This is a dream structure.
Market Trends and Timing: Let's say you want to retire in Spain in ten years, but you can only afford today's prices. With this deal, you can buy with a 50% reduction in today's price, pay it off over 10 years and move into a property that our trends indicate will be 66% more expensive when you move in. Understanding market cycles helps in making the right investment at the right time. Buying an Equity Release investment, where prices are lower, and selling during a seller’s market, when demand is high, can really maximise profits.
Legal and Regulatory Considerations: When buying a property in Spain, especially a country property, clients must be aware of local property laws, zoning regulations, and tax implications. In some areas, taxes, maintenance costs, or rental restrictions could significantly affect profitability. Conducting due diligence on the legal and regulatory framework helps avoid future complications. We have a full law division, Spanish Solutions, who take care of this for you.
Capital Growth Potential: Again, imagine you buy this property for 150,000 euros. After 10 years with a 7% annual compound appreciation, the value of the initial €150,000 investment would grow to approximately €295,000. That is pretty good but.... this property is worth 250,000 euro. Now, let's add it up again. After 10 years with a 7% annual compound appreciation, the value of the initial €250,000 investment would grow to approximately €491,787. If you can show us an investment giving that sort of return anywhere else apart from Equity Release investing in Spain, we will eat all our hats!
Liquidity: While real estate is generally considered a long-term investment, it’s essential to consider how easily you could sell the property if needed. The owner of this property is in his 80s. Even if he lives another 20 years, you can sell your option to buy at any time. In ten years, the owner will be in his 90s and the investment will then be very appealing not just to a small private investor but to investment firms who will be hoovering up these deals by then.
Management and Maintenance: Properties that are easy to manage and maintain, or that allow for efficient outsourcing of management, offer fewer headaches and operational costs. Reducing these expenses increases profitability and peace of mind. On this deal, your maintenance is approximately ZERO! Maybe call around to the owner with a bottle of whiskey every Christmas, apart from that, you have not a penny to spend, Contrast that with a property you buy and rent to 10 students back in Dublin or Manchester.
Ultimately, the perfect property investment aligns with your financial goals, risk tolerance, and market conditions.
This surely must be in the top ten property investments in Spain right now.
Why not get in touch with our team and arrange a viewing either in person or on a video call?
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