CONTENTS: INTRODUCTION - ESTEPONA, COSTA DEL SOL - MARBELLA, COSTA DEL SOL - FUENGIROLA, COSTA DEL SOL - MIJAS - BENALMADENA - TORREMOLINOS, COSTA DEL SOL - MALAGA, COSTA DEL SOL - NERJA, COSTA DEL SOL - BARCELONA, COSTA BRAVA - BLANES, COSTA BRAVA - LLORET DE MAR, COSTA BRAVA - TOSSA DE MAR, COSTA BRAVA - ALMERIA, COSTA DE ALMERIA - ROQUETAS DE MAR, COSTA DE ALMERIA - SALOU, COSTA DORADA - MIAMI PLAYA, COSTA DORADA - CADIZ, COSTA DE LA LUZ - ISLANTILLA, COSTA DE LA LUZ - A CORUNA, GALICIA - SANTANDER, CANTABRIA - SAN SEBASTIAN, BASQUE COUNTRY - JAVEA, COSTA BLANCA - GANDIA, COSTA BLANCA - BENIDORM, COSTA BLANCA - ALICANTE, COSTA BLANCA - TORREVIEJA, COSTA BLANCA - LA MANGA, COSTA BLANCA - ORIHUELA COSTA, COSTA BLANCA - PALMA, MAJORCA - MAGALUF, MAJORCA - ALCUDIA, MAJORCA - MAHON, MENORCA - LOS DELFINES, MENORCA - IBIZA TOWN, IBIZA - SAN ANTONIO, IBIZA - PLAYA D’EN BOSSA, IBIZA - PLAYA DE LAS AMERICAS, TENERIFE - PUERTO DE LA CRUZ, TENERIFE - LOS GIGANTES, TENERIFE - LOS CRISTIANOS, TENERIFE - COSTA DEL SILENCIO, TENERIFE - CALETA DE FUSTE, FUERTEVENTURA - LAS PALMAS, GRAN CANARIA - PLAYA DEL INGLES, GRAN CANARIA - PUERTO DEL CARMEN, LANZAROTE - PLAYA BLANCA, LANZAROTE - LA PALMA, CANARY ISLANDS - LA GOMERA, CANARY ISLANDS - GRANADA, ANDALUSIA - VALENCIA -
Spain is certainly a hotspot! I’m sure you’ve seen the adverts in the local and national press offering superb properties at attractive prices. But guidance is needed. Spain is a big country! There are hotspots and not-so-hot hotspots. You need to know a little bit more than what the selling agent is telling you.
My expertise is in the UK market but the same principles hold – will you get a good rental income and will you get good capital growth? Another feature is will you have a fun holiday home? All these questions need answering. Well I hope this guide does this for you.
The key thing with any oversea property investment is that you get everything you want from it. Depending on what type of investor you are will determine what you want. If its yield then go for for the high yielding all year round season properties. If its capital growth then go for the areas that are developing. If it’s a fun holiday home then go for the area with the most facilities. If its all of these then go for the area that meets all of these – and there are the areas that can do this!
If you need further help with acquiring an overseas property then contact me at www.ajayahuja.co.uk
What is a Hotspot?
A hotspot is an area where there are properties available for sale that fall into one of these categories:
|A||Property prices are predicted to rise at a greater rate than the national average AND the rental yield is greater than the national average.|
|B||The rental yield is greater than the national average.|
|C||Property prices are predicted to rise at a greater rate than the national average.|
I have ranked the categories with category A being the most desirable as category A enjoys the best of both worlds – capital growth and yield thus spreading the return and overall risk. Category B is ranked second as the yield is a certain outcome however capital growth is an uncertain outcome being category C.
I’ve found in my experience that investors choose category A, B or C on personal circumstances but more so on gut reaction. So trust your instincts! If you like the place then buy it. Remember this investment is not only based on financials but also on whether you’ll get enjoyment out of the property. To quantify this within the book is impossible. Only you know this value and you have to weigh it up against the financials.
Identification of Hotspot
So how did I identify the hotspots listed? Well the categories are based on two factors:
- Actual rental yields
- Predicted property prices
- Actual Rental Yields
The first factor, actual rental yields, was easy to do. Actual rental yield is:
ACTUAL YEARLY RENT
ACTUAL PROPERTY PRICE
Since these figures are actuals, we collated all the rental figures from local letting agents in Spain and all the local property prices from the estate agents in Spain and calculated all the yields being offered from all the locations. We then eliminated all the poor yielding locations and where we thought tenant demand was so low not to cover the running costs of the property (even if the area was high yielding).
- Predicted Property Prices
Here I did not predict property prices as this is an impossible thing to do. If I could do this I would not be writing this book but buying everything I could in a hotspot area! All I did was to look at what would make an area’s property price rise above the national average. I came up with the following:
- Future residential developments in the area.
- Proposed inward investment from private companies, government and trusts.
- Proposed improvements to leisure facilities such as sport centres, parks and shopping centres.
- The likelihood of holiday seasons being lengthened.
- Our own experience gathered from being in this industry and from comments from letting and estate agents.
The Four Types Of Investor?
So you know you want to invest in an overseas property by why and how are you going to invest in such a property? Well there are many ways to invest in an overseas property but we have narrowed these ways down in to four types. Investors can be broadly categorised into one of the following and it is up to you to decide which category or categories you fit into:
|Retirement||This investor is looking for a home to spend either all or some of their time in Spain to enjoy the better quality of life that Spain offers.||He will be typically aged over 50 and be looking for somewhere that has good leisure facilities and be near the sea.|
|Worker||This investor is looking for a home where they can live and work so that their overall quality of life is improved.||He will be typically aged over 21, possibly self-employed and depending on his profession wishing to locate to a city where there is more work, or near a coastal town where there are more leisure facilities but he can still work through phone, email, fax and internet.|
|Holiday||This investor is looking for a holiday home, typically used for 4 – 6 weeks in a year. The rest of the time the property is let out.||He will typically be aged over 30 with a family. His aim is to save on holiday rental fees, rent to friends & family and ultimately pass down the property to his children.|
|Business||This investor is looking to buy and rent properties in Spain for profit. His aim is purely financial.||He will be typically aged over 21 and either fed up with the high UK prices or looking to diversify their portfolio by buying properties in a different area other than the UK.|
From reading this list you will be able to decide what type of investor you are and more importantly what you want to get from your investment. Once you are clear what you want then the whole process becomes easier as you know exactly what you are looking for.