Investment Property in Málaga

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Buying Investment Property in Málaga?

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

Buying investment property in Málaga 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 Málaga are purchased by non Spanish Nationals and are either used as a holiday homes or straightforward by and hold investments in Málaga.

Once these properties have been renovated and rented then investors in Málaga 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 Málaga or elsewhere.

How easy is it to buy investment property in Málaga?

Buying an investment property in Málaga might be more complex, but Spain is a very welcoming country for foreign buyers as foreign ownership of properties in Málaga 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 Málaga 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 Málaga 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 Málaga?

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

Map of Málaga

Málaga (, Spanish: [ˈmalaɣa]) is a municipality of Spain, capital of the Province of Málaga, in the autonomous community of Andalusia. With a population of 578,460 in 2020, it is the second-most populous city in Andalusia after Seville and the sixth most populous in Spain. It lies on the Costa del Sol (Coast of the Sun) of the Mediterranean, about 100 kilometres (62.14 miles) east of the Strait of Gibraltar and about 130 km (80.78 mi) north of Africa.

Málaga’s history spans about 2,800 years, making it one of the oldest cities in Europe and one of the oldest continuously inhabited cities in the world. According to most scholars, it was founded about 770 BC by the Phoenicians as Malaka (Punic: 𐤌𐤋𐤊𐤀, MLKʾ). From the 6th century BC the city was under the hegemony of Ancient Carthage, and from 218 BC, it was ruled by the Roman Republic and then empire as Malaca (Latin). After the fall of the empire and the end of Visigothic rule, it was under Islamic rule as Mālaqah (Arabic: مالقة) for 800 years, but in 1487, the Crown of Castile gained control in the midst of the Granada War. The archaeological remains and monuments from the Phoenician, Roman, Arabic and Christian eras make the historic center of the city an “open museum”, displaying its history of nearly 3,000 years.

The painter and sculptor Pablo Picasso, Hebrew poet and Jewish philosopher Solomon Ibn Gabirol and the actor Antonio Banderas were born in Málaga.

The most important business sectors in Málaga are tourism, construction and technology services, but other sectors such as transportation and logistics are beginning to expand. Málaga has consolidated as tech hub, with companies mainly concentrated in the Málaga TechPark (Technology Park of Andalusia). It hosts the headquarters of the region’s largest bank, Unicaja, and it is the fourth-ranking city in Spain in terms of economic activity behind Madrid, Barcelona and Valencia. Regarding transportation, Málaga is served by the Málaga–Costa del Sol Airport and the Port of Málaga, whereas the city is connected to the high-speed railway network since 2007.

Making Money on Investment Property in Málaga

The best way to make money on Málaga 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 Málaga

Fees for buying a property in Málaga 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 Málaga: 6–10% (existing properties) / VAT (or IVA) at 10% (new properties in Málaga)
  • Notary costs, title deed tax, and land registration fee in Málaga: 1–2.5%
  • Legal fees for buying investment property in Málaga: 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 Málaga, with a 18 year track record the agency has been directly or indirectly responsible for the largest volume of transactions in Málaga in the past two decades.

Types of investment property in Málaga

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

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

Types of property investment deals in Málaga

The main types of property deals in Málaga are:

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

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

Buy to hold in Málaga

Long-term rental property in Málaga 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 Málaga 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 Málaga 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 Málaga 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 Málaga 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 Málaga 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 Málaga property to Holiday Accommodation

For property investors in Málaga, 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 Málaga and then converting these homes into serviced apartments to maximize yield.

The types of property used for serviced accommodation in Málaga 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 Málaga 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 Málaga

  • 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 Málaga
  • 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 Málaga
  • 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 Málaga 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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