Marbella Real Estate Investment Lifestyle


A PRIME REAL ESTATE INVESTMENT DESTINATION IN SPAIN

Let us tell you a bit about what we call Marbella Real Estate Investment Lifestyle. Marbella is one of the most popular and renowned holiday destinations in Spain, known for its breathtaking landscapes, rich historical heritage, and the lifestyle it represents. It has also caught the attention of investors who have recognized the enormous potential in real estate investments. In this article, we explore what makes Marbella excellent for real estate investment, why considering such an investment is worthwhile, and how to avoid scammers and speculators.

EXCELLENT GEOGRAPHICAL LOCATION

Real Estate Investment Lifestyle in Marbella is ideal for many reasons, one is its fantastic geographical location. Situated in the southern part of the Costa del Sol, it enjoys the pleasant Mediterranean weather, allowing visitors to indulge in its beautiful sandy beaches for most of the year. Marbella’s microclimate is unmatched in Europe, and its proximity to the Malaga international airport, which is well-connected to major European cities, and offers direct flights to other continents, and major cities such as New York, makes it easily accessible. These factors attract tourists, investors, and potential tenants, thereby increasing the occupancy rate and the value of properties.

QUALITY OF LIFE IN A LUXURIOUS ENVIRONMENT

Real Estate Investment Lifestyle in Marbella is a symbol of stylish wealth and luxury. The city is home to exclusive clubs, restaurants, shops, and golf courses, making it a favored destination for the rich and famous. The number of tourists and visitors grows each year, leading to a rising demand for luxury properties in the city. This appeal contributes to the increase in investment value and the high rental potential of properties.

ADVANCED INFRASTRUCTURE

Real Estate Investment Lifestyle in Marbella boasts a well-developed transportation network, ensuring convenient travel within the city and its surroundings. The city offers high-quality private and public healthcare and educational facilities, top-notch hospitality and entertainment venues, as well as well-equipped shopping centers with an international variety of goods. Additionally, there are numerous sports and recreational facilities in the city, including golf courses, tennis clubs, paddle courts, and fitness centers.

MARBELLA REAL ESTATE INVESTMENT LIFESTYLE: HIGH APPRECIATION POTENTIAL

In recent years, real estate investment in Marbella’s property market has experienced significant growth. During the post-crisis recovery, property prices steadily increased at an annual rate of 5%, and in the last two years, they have risen by as much as 20-30%. With the continuous growth in demand and a decreasing supply of real estate, property prices are expected to keep rising. This presents an attractive opportunity for real estate investors seeking long-term growth.

WHAT INVESTMENT OPPORTUNITIES ARE AVAILABLE?

Many people ask us what the best real estate investment on the Costa del Sol is. The definition of a good investment is highly subjective. However, one thing is certain – properties in Marbella and its surroundings are resilient in value. Even during the 2008 economic crisis, prices did not plummet; they only experienced a slowdown in their rate of increase. For instance, an apartment with two bedrooms in Nueva Andalucía that was purchased for €200,000 eight years ago is now valued at €300,000. Living in Marbella itself is a great “investment”: enjoying a quality lifestyle, healthy eating, taking advantage of sports opportunities the city offers, and relishing the proximity to the sea, to name a few advantages. Real Estate Investment Lifestyle in Marbella cannot be compared to buying property in another country; here, the buyer acquires a way of life, a calmer, more balanced existence.

REAL ESTATE INVESTMENT IN 2023

Real Estate Investment Lifestyle: A lucrative success story

Five years ago, one of our German investors purchased a property, renovated it, and sold it. Encouraged by this success, they continued to buy and sell apartments in succession. By 2023, they had already renovated and quickly sold eighteen apartments. If we take a closer look at their business model, it’s easy to calculate their profit. They exclusively purchase directly on the waterfront and well-located properties. While previously they could acquire the properties for around €600,000, nowadays they typically get them for around €800,000 to renovate. The investment cost usually amounts to €150,000 to €200,000. Each apartment is equipped with underfloor heating, new tiles, windows, a wine cooler, and the penthouse apartments even feature a sauna and jacuzzi. Additionally, all apartments offer breathtaking views of the sea. Generally, the properties are sold within three months. Thus, an apartment purchased for €800,000 with an additional investment of €200,000 totals €1 million. Once renovated and stylishly furnished, they usually sell the apartment for 60% more, fetching €1.6 million.

<a href="https://www.freepik.com/free-ai-image/design-house-modern-villa-with-open-plan-living-private-bedroom-wing-large-terrace-with-privacy_43175001.htm#query=luxury%20property%20spain&position=11&from_view=search&track=ais">Image By benzoix</a>

WHAT ABOUT THE TAX?

When someone buys a property, they have to pay a transfer tax, which is currently 7% of the purchase price in Andalusia. However, if someone purchases property for investment purposes, they only have to pay a 2% tax. For this activity, they need to establish a business, which incurs annual maintenance costs of €6,000. Based on my calculations, when someone purchases property for investment purposes, it’s only worth paying the annual €6,000 to maintain the company if they save more in taxes by paying 2% instead of 7% at the time of purchase. Generally, for properties valued around €400,000 to €500,000, it becomes beneficial to establish a company and purchase through it to take advantage of the reduced tax rate.

PROFIT MAKING

Now, let’s see how much profit the owner retains. In most cases, when we sell the property, we involve another real estate agency. In Spain, the owner pays a 5% commission, which is typically split among 2, sometimes 3 agencies. The owner receives an invoice for the real estate agencies’ commission, which can be deducted from the profit. Going back to the previous example, if the profit is €600,000 and the commission is €80,000, the remaining amount is subject to a 21% capital gains tax. After taxes, the owner is left with €400,000.

It’s worth noting that these figures may vary depending on the specific circumstances of each investment. Nevertheless, Marbella remains an attractive destination for Real Estate Investment Lifestyle due to its prime location and high demand, making it a lucrative market for those who choose to enter this business.

Unfortunately, for lower-priced properties, the profit margin is not as attractive. Even if an investor spends €30 000 or even €40 000 on a €200 000 apartment, this property will never sell for €400 000, so the return on investment will be much lower. It is also important to note that there is a huge demand for investment property. Swedish, Norwegian, Danish and German companies are eager to get something on the market.

GENERATING PROFIT FROM SHORT-TERM SPENDING

When selling a property, in most cases, we involve another real estate agency. In Spain, the owner pays a 5% commission, which is usually divided among 2, sometimes 3 agencies. The property owner receives an invoice for the commission from the real estate agencies, allowing it to be deducted from the profit. Continuing with the previous example, if the profit is €600,000, and we deduct the €80,000 commission, the remaining amount is subject to a 21% capital gains tax. After taxation, €400,000 remains. We believe that realizing €400,000 with a €1,000,000 investment in just six months is a quite good investment.

It is a misconception that all properties next to golf courses can be rented out in the off-season. Properties next to golf courses can expect a 3% profit. There are thousands of vacant properties next to golf courses in the off-season, golfers also prefer to live in town, close to the beach, shops and shops, as they prefer to go to a local pub or night club after golf or to go out for dinner at their favourite restaurant without having to drive home to their apartment next to the golf course.

IN A WEB OF LIES

Several well-known agencies are offering properties for sale that we know for sure have been sold years ago. When a hopeful buyer calls the agency, they are told that the property is still for sale, but only because of the overwhelming interest, they are asked to send €5000 to the agency’s account. The office promises to “reserve” the property for the buyer. The moment the €5000 arrives in the agency’s account, the buyer is told that unfortunately the property has been sold. They add that the buyer should not worry because the money has not been lost. They promise to credit the deposit when they find a suitable property. By doing this, the buyer has effectively committed himself to the estate agency.

SELF-APPOINTED, BUNGLING EXPERTS

The scope for fraud is endless. There are those who, claiming that too many people come to enquire and that it takes them a lot of work to drive customers around, charge money to drive them around town. In one package, he offers a tour for a few hundred euros, promises to show the restaurants and cafés in the area, but if the prospective buyer is willing to pay more, he will even be shown property. We think it is important to note that a serious real estate agency, just because it arranges viewings, does not charge a fee or even a commission (which is paid by the seller). Do not fall for such scams! Some people can claim with amazing confidence on Facebook, for example, that they are real estate agents, experts, brokers. And these people are always the most vocal, the most active on social media, with plenty of time to post and comment. Armed with buzzwords, they are the people’s experts, without control, anyone can be an expert.

Conclusion

Real Estate Investment Lifestyle is a thing in Marbella. Many people are transferring part of their wealth to Marbella and the surrounding area to make a large profit. A profit of up to 40% can be made if investors can enter the non-luxury sector. For smaller investment amounts, the profit will also be less than 15-20%, and a 5% annual increase in value can definitely be expected. In the last 2 years, this appreciation has exceeded 20-30% in some regions and the upward trend will continue in 2023. It is worth taking a critical view of the claims that are being made on social media, and it is worth checking out the self-proclaimed experts who usually have a ‘can do’ attitude. In our office, which has been operating successfully as a registered business for over a decade, we work with our staff to help you find your dream home and help you to the best of our ability. Move2Marbella and its team are experienced, honest and discreet. Thank you for placing your trust in us.