Rent of property in Spain

Rentals.jpg (14 KB)  Letting of the real estate in Spain is a good strategy for those who looking for long-term financial support, rather than a quick speculative profits.

  If you buy a property on the Costa del Sol, taking a mortgage up to 60% of the purchase price, you can receive an additional income from the lease, which will ensure repayment of the loan, repayment of interest and obtaining additional profits.

  In addition to this, you'll be able to use your property for a few months of the year, except when it is rented for the whole year.

  Also you can permanently increase your capital, because the cost of real estate in Spain is growing up every year. Right now there are some amazing options available on the market at a very low price. And if you think about the future, the value of your acquisition made today, surely will grow up in the near future.

  However, note that if you own a property in Spain and wish to rent it out, you have to be extremely careful with the terms of the contract, which is signed between you and your tenants. Therefore, listen to our advice - you should choose only reliable agencies with extensive experience and good references.

Example of calculating the income of the acquired real estate:

Villa in Marbella worth €700,000 

Own funds (50%): €350,000 

Mortgage loan (20 years, 2%): €350,000

Taxes related to the purchase (~11%): €77,000

Annual property tax (IBI): €900

Payments in Comunidad, local tax (Basura), utility payments: €2,500 per year

Mortgage payment: €2,041 per month, or €24,492 per year



Weekly rentals during the high season from May to September - from €2,500 to €3,500 per week

Long-term rentals - €6,000 per month



When you rent from May to September: €60,000

Long-term rentals: €72,000 euros

Payment for services management company (10%): €6,000 - €7,200 *


Total per year:

Income: €60,000 - €72,000  *

Costs: €900 + €2,500 + €24,492 + €6,000 (€7,200) = €33,892 - €35,092 *

Profit: €26,108 - €36,908 Euros *


Total income on investment:

When you rent from May to September: €26,108 / (€350,000 + €77,000) = 6.11% + the opportunity to stay from October to April

Long lease: €36,908 / (€350,000 + €77,000) = 8.64% 

Without morgage: €61,400 / (€700,000 + €77,000) = 7.97% 



* - In the case of long-term lease

Bonus - with the purchasing of real estate with the value more than 500,000 (excluding mortgages) you can obtain an investment residence permit («Golden Visa») with the right to work in Spain and unlimited time to stay here. In this case the investor can be tax resident of another country or of Spain as well.