Investment Property in La Palma

investment property in espana

Buying Investment Property in La Palma?

Looking to buy investment property in La Palma? It’s a sound choice, yet one that must be executed correctly. This article tells you about buying investment property in La Palma, the types of deals available and the likely returns. Remember, buying property in La Palma has, on average, yielded in excess of 8% returns per year, and significant capital asset growth.

Buying investment property in La Palma with cash outright is also a sure fire hedge against any rise in interest rates. Some investors look to buy properties in need of renovation or a change of purpose. They then renovate those properties and rent them out on a long term or short terms basis. Many investment properties in La Palma are purchased by non Spanish Nationals and are either used as a holiday homes or straightforward by and hold investments in La Palma.

Once these properties have been renovated and rented then investors in La Palma may refinance the property by taking a mortgage over the property at a higher value, using the income to pay the mortgage and reinvesting the profit from the deal into more property in La Palma or elsewhere.

How easy is it to buy investment property in La Palma?

Buying an investment property in La Palma might be more complex, but Spain is a very welcoming country for foreign buyers as foreign ownership of properties in La Palma has really helped lift and stabilize the local economy.

The procedures for buying a property in Spain as an expat are relatively straightforward. Before buying, you’ll require a financial number, which can be obtained by visiting a police station with your passport. This is typically processed on the same day for Spanish or EU citizens, but may take a little longer for other nationalities.

Financing an investment property in La Palma can be done by cash or mortgage charge. It is often easier for expats to finance the purchase from their home country. Pre 2008 many Spanish banks in La Palma would lend to international investors although they have been reluctant to do again, so even now.

What is the average price of investment property in La Palma?

Average property costs per square meter in La Palma are €1,722 per square meter, representing a solid, year on year growth trajectory of 8%.

Map of La Palma

La Palma (Spanish pronunciation: [la ˈpalma], locally [lɐ ˈpɑ(l)mɐ]), also known as La isla bonita (English: The Beautiful Island) and officially San Miguel de La Palma, is the most north-westerly island of the Canary Islands, Spain. La Palma has an area of 708 square kilometres (273 sq mi) making it the fifth largest of the eight main Canary Islands. The total population at the end of 2020 was 85,840, of which 15,716 lived in the capital, Santa Cruz de La Palma and about 20,467 in Los Llanos de Aridane. Its highest mountain is the Roque de los Muchachos, at 2,423 metres (7,949 ft), being second among the peaks of the Canaries only to the peaks of the Teide massif on Tenerife.

In 1815, the German geologist Leopold von Buch visited the Canary Islands. It was as a result of his visit to Tenerife, where he visited the Las Cañadas caldera, and then later to La Palma, where he visited the Taburiente caldera, that the Spanish word for cauldron or large cooking pot – “caldera” – was introduced into the geological vocabulary. In the center of the island is the Caldera de Taburiente National Park; one of four national parks in the Canary Islands.

Making Money on Investment Property in La Palma

The best way to make money on La Palma Property is via an expert international investment fund.

Your Financial Advisor or Accountant won’t bring you the opportunities because of course they won’t receive their greasy commissions.

Investment funds are not even allowed to advertise so you’ll never hear of them unless a friend recommends them.

You will need at least some experience with previous investments to be eligible and of course these funds are extremely picky about the investors they accept. They can afford to be. They don’t need your money, but they can put your money to work for you like never before.

Costs of buying a property in La Palma

Fees for buying a property in La Palma vary from area-to-area, and many are negotiable – for example, there are no fixed fees for lawyers or estate agents. Buyers must pay the majority of the costs, which are generally as follows:

  • Property transfer tax in La Palma: 6–10% (existing properties) / VAT (or IVA) at 10% (new properties in La Palma)
  • Notary costs, title deed tax, and land registration fee in La Palma: 1–2.5%
  • Legal fees for buying investment property in La Palma: 1–2% (including VAT)

The seller usually pays the estate agent fees in Spain. Estate agents usually charge their fees as a percentage, typically around 3% of the final sale price.

Who is the Best Real Estate Agent in Spain?

PRestates is a multi-award winning Luxury Real Estate broker in La Palma, with a 18 year track record the agency has been directly or indirectly responsible for the largest volume of transactions in La Palma in the past two decades.

Types of investment property in La Palma

It is important to understand the main types of Investment Property in La Palma

  • Undeveloped land in La Palma
  • Commercial property in La Palma
  • Residential real estate property in La Palma
  • Operating property investment in La Palma
  • Distressed property investment in La Palma
  • Investing in a World Class fund with activities in Spain, and in La Palma

Types of property investment deals in La Palma

The main types of property deals in La Palma are:

  • Buy to let in La Palma
  • Buy to hold
  • Serviced Accommodation in La Palma
  • Vacation Rentals in La Palma
  • Commercial Property in La Palma

The Most Successful Property Investment Fund 2020 : Click Image to Download Prospectus

Buy to hold in La Palma

Long-term rental property in La Palma is widely considered one of the best ways to diversify your property portfolio. So buying and owning property means much more than just investing in a single property, it can bring you a variety of benefits, such as access to a variety of investment opportunities and the benefits of long-term ownership.

While some investors in La Palma may be confused or intimidated when they start, buying and owning property can be one of the best investments you can make if you do your due diligence before you start.

The rental income from investment property in La Palma generates short-term income that can be used to pay off a mortgage or to invest money. The strategy of buying and holding property is one of the most common investment options.

The value of the La Palma property will increase over time and the investor will benefit if he is willing to sell it later. The investor benefits from being bought in the expectation that the value of the property will rise over time.

Investors considering a La Palma property purchase and holding strategy should do their best to calculate the potential income from renting out the property. The bottom line is that monthly income should exceed the cost of rent in the first year of ownership and annual rental income over the next five years.

If the investor plans to sell the La Palma property later, possible profits should also be taken into account. Finally, any losses from taking out a mortgage or other type of property financing must be taken into account, as well as any gains from the sale.

Convert La Palma property to Holiday Accommodation

For property investors in La Palma, converting a home into a serviced apartment would mean higher rents than the normal rent increase. As a result, many people are buying investment property in La Palma and then converting these homes into serviced apartments to maximize yield.

The types of property used for serviced accommodation in La Palma are often the same as those you would use to buy to let. Where you have a guaranteed short-term rent, it’s not as rigid as renting out a property.

Lease La Palma property to the Worlds Best Rehab

Remedy Wellbeing is a bespoke, luxury treatment center with a significant corporate footprint in Spain. This means they treat just one client at a time in luxury 6* accommodations. All properties used by Remedy Wellbeing are as unique as they are inspiring. If you own or represent some of the most exceptional, unique and luxurious accommodations in Spain, Remedy Wellbeing can be contacted via their dedicated property management company, Physis Realty.

Disadvantages of investing in Serviced Accommodation in La Palma

  • Holiday accommodation is more of a business strategy than a property strategy, and the workload is far more intensive.
  • You’ll need to furnish your holiday rental accommodation in La Palma
  • You’ll need to clean the rooms and change the sheets every time your guests leave.
  • Who does all the laundry?
  • Who does all the cleaning?
  • Who’s going to do all the work for you in La Palma
  • How are the guests actually going to get in?
  • Are you going to have somebody to do a meet and greet?

Buying investment property in La Palma to convert into serviced accommodation or holiday lets is not really considered an investment, because the amount of work involved make it a full time job.

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