Spanish property investment is now one of the best financial decisions in the 21st Century - InvestmentProperty.net

The popularity of Spain as a location for investment property purchases is on the increase, especially to UK investors. The reasons for this are many: Spanish airports have made predictions regarding the increase of tourist traffic, property prices are rising steadily and interest rates are low. In addition to this, Spain has a visible and well accepted expatriate community which means that there is likely to be a continuing increase in the demand for holiday makers wishing to stay for longer periods of time in private accommodation. This means that it is currently a good time for Spanish property investments to be made.

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As with any successful investment, the key is ensure thorough research beforehand. This can only be time well spent, and will lead to a well informed decision when it comes to selecting a property to buy. The local rental market should be assessed, as should the traffic of holiday makers through the area, and the future trends that may be likely to affect tourism or business in the locality. It is important to assess what it is that you want from the investment, beyond the idea of “making money”. Needless to say, properties that are located near the beach, or which have swimming pools will have a higher market value.

To generate a more immediate income, it is more practical to invest in a resale property located in an already popular holiday area. In this case, the property may well already be in use as rental accommodation, and bar a few minor maintenance requirements, will be ready to market immediately, thereby prompting a more swift return.

For those in a position to wait before earning a return, it can be more rewarding to purchase a property that may be in need of some renovation or maintenance. This will give the advantage of being able to “tailor make” the property for the target clientele, making it more attractive and therefore increasing the level of rental income.

In both cases however, it is important to factor in the costs involved with owning a property, especially a property abroad. Building work may take longer to arrange and longer to complete than in the UK. The property will have ongoing maintenance costs, and there are likely to be property management fees involved as well as the running costs for periods when the property is vacant, e.g. during low seasons.

Another popular form of property investment in Spain is to buy “Off Plan”. This is when a developer sells units of property in order to fund the ongoing work. This form of purchasing is popular for those wishing to invest in rental properties, but also those who are wishing to buy a holiday or retirement home for themselves. Detailed plans are provided to the investor, and the unit can then be secured for a percentage of the sale price plus deposit. There are many advantages to investing in this way, not least competitive pricing, the flexibility of choosing a more prominent location for your unit within the development, and a near guarantee of a rise in value on completion. Should the property be sold before completion however, there will be no capital gains tax to pay.

Overall, the investment property market cannot guarantee the return that an investor is likely to make, but with a little research, a wise decision can provide a healthy return. Recent research has presented the following facts and figures:

· In the last year, the value of property in Madrid rose by more than 30 % (Agence France Presse)
· In 2002, the value of houses on the Costa del Sol increased by more than 18.5% (Property News)
· By mid 2003, the average increase in the value of Spanish house prices was 17.5%, compared to 2002 (Spanish Ministry of Development)
· By 2010, it is predicted that the immigrant population in Spain could be as high as 5.5. Million. This would reflect 12% of the population in Spain, compared to 5% in 2001. A growing increase at this rate will only continue to fuel the demands on the Spanish property market. (Spanish National Statistics Institute)

The growth in the Spanish property market is supported by the Spanish government, which is keen to fuel tourism and to encourage international investment in Spain. To facilitate this, there is now added security for investors, from new legislation regarding property sales and building legislation. It is therefore a very tempting time to invest in Spain, whether in terms of buying to sell, buying to let, or simply buying a property for the opportunity to own a private residence in a warm and beautiful country.