Investment property in Spain - what to buy & where?

Choosing the right investment property in Spain demands plenty of thorough research and a good deal of caution. Gone are the glory days of the 70s and 80s when you really couldn’t go wrong as long as you bought something reasonably habitable near any of the most popular Spanish costas.

Some coastal areas of Spain have been severely blighted by over development in recent years and whilst construction continues apace many developers are now finding themselves saddled with a glut of new properties that no-one wants to buy.

Is Spanish property still a good investment?

In the worst affected areas, property prices have been falling over the last couple of years which is why it’s vital for would-be investors to conduct their own research into the local housing market where they intend to buy. Spanish property still represents a good investment for the wise and cautious buyer but it’s not such a good deal these days for the kind of get rich quick gamblers who made a killing in Spain in the late 1980s.

You can still be fairly sure of a good return on your investment as long as you buy the right kind of property in the right location and you’re in a position to bide your time while the Spanish housing market stabilises after three heady decades.

Be clear about why you are investing in Spanish property

Before you even start house hunting you need to be completely clear in your own mind about the purpose of your investment. Is it solely a money making venture or do you intend either to live in the property or use it as a holiday home?

If your Spanish property venture is primarily a cash cow then your best bet is to buy a villa or apartment with good letting potential so you can generate an income while waiting for the right time to sell. Identify the types of properties and the locations with the highest holiday rental occupancy both in high and low season. You’ll be able to get a feel for which rentals fare best in terms of attracting year-round clients if you check out the online availability charts of owners advertising their properties on web sites specialising in Spanish holiday homes. These charts show you the advance bookings of each property and they’re linked to useful information about the property’s facilities and rental tariffs.

If you’re buying to let or intend to use the property for only a few weeks of the year, you might want to consider investing in a community development where all communal facilities – usually including a swimming pool and landscaped gardens – are looked after by staff employed by the community of owners.

Obviously if you plan to live in the property for all or most of the time you’ll need to balance your own requirements with the need to invest in a place with good capital growth potential.

Other investment opportunities in the Spanish property market

There are still many excellent investment opportunities inland from the coastal tourist traps. There are some great bargains to be found a short distance back from all the bustle of the beachfront and many ex-pats find a quieter country setting is preferable for year-round living than the main tourist centres.

Market analysts predict that inland properties, which are still within easy driving distance of an international airport and tourist facilities, are likely to continue to increase in value unaffected by the over crowding and crazy price increases which are now having a negative effect on their coastal counterparts.

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