Part 2 – Investment Properties
In this post, we, at Properties Overseas, look at the questions that should be considered by those who have investment properties and are reviewing the future. Many are the same as those those considering what to do with their holiday home.
It can be easier for the owner to take a step back and assess the value of an investment property than if it is a holiday home. There are probably fewer emotional factors particularly if personal use is limited.
Questions to ask
Do you have full and accurate knowledge of the financial costs of running the property:
- How much are local taxes, community fees, mortgages or any outstanding loans?
- What is the annual maintainance budget for repairs, replacement furtniture, white goods etc?
- What services do you use? Do you pay for gardeners, key holders, security, managing agents, cleaners, pool upkeep and fiscal representation, etc?
- Look at the return it is achieving after expenses and taxes? The Spanish tax authorities have tightened regulations over the last several years. Their has been a drive to ensure if Spanish properties are rented out they are legally registered, conform to required standards and taxes due are paid.
How much is the property worth and how much would you receive from the sale?
Have changes in tax rules since we left the EU reduced the return to a point where other investments would give you more?
Do you use the property as a holiday home. How much is that worth to you now?
The pandemic has obviously impacted the return you have received, particularly, if you mainly rent to UK residents. Most people think, though, that the market will return to previous levels quite quickly but it is possible that it will have change people’s holiday expectations and requirements. You should think about the future of the market and judge whether holding on to the property suits your short term to long term financial needs.
Finally, you should consider the risks and opportunities of continuing to own the property and impact they may have. These may include changes in taxation, potential development in the area improving the rental prospects or leading to over supply. Could Covid come back and cast a shadow over the rental market in future years?
Need Help Answering the Above?
Many of the questions relate to personal choice and ambition. However, on points around the property market, etc, Properties Overseas may be able to help or point you in the right direction. Contact us using the details below or use our contact form
Have You Made Up Your Mind?
After taking all the answers to the above into account ask yourself, does the property still give you satisfaction on a business and personal level? If not, we can help you organise the sale.
In Spain, as in the UK, demand for property varies from location to location. Our recent experiences we have found strong demand in the Nerja, Frigiliana areas of the Costa del Sol, East of Malaga. Properties such as quality located apartments, townhouses and villas, and; areas such as central Nerja, Capistrano and the sought after white village of Frigiliana are sought after.
On the Costa Blanca South, modest to medium priced range properties are well received by potential buyers. The Orihuela Costa area such as Playa Flamenca, La Zenia, Cabo Roig, Campomar, Mil Palmeras is in demand.
A number of nationalities are continuing to invest in Spain. Recent trends have shown a increase from Germany, Scandinavian countries and a slight drop from Britain buyers.
We have helped a number of clients who have made the decision to sell when reassessing their financial position.
If you are interested in Property Overseas project management service of selling your property arranging Power of Attorney, legal representation, property valuations and marketing etc., Contact us for a free initial consultation. Our service is flexible and we can tailor our involvement to suit your requirements.
Categories: Living in Spain