The holiday home is not just a holiday home by the sea, it is a promising source of stable income. Of course, if you approach the investment wisely. A well-designed scheme for converting living space into a profitable business
Analysis of the market and the purpose of the buyer
You always have to start with a preparatory training. Even before the real estate selection, it is important to decide how you want to use it. The company's specialists prepare the analyst individually for each client. And on the basis of all factors directly depends on what kind of real estate offered to the customer. Because a beautiful apartment may not be suitable for your own apartment. A perfect family bungalow - it is bad to forego rents.
It is a mistake to think that resort accommodations bring profits only in season. Properly selected property with a good location works for the owner all year round.
In Spain, on the Costa Blanca, it is sunny even in winter and you can swim in the sea. At that time Spaniards and tourists from northern Europe came here to rent active accommodation.
Immediately after you have decided on the goals, we start to study the market thoroughly. We look at statistics, which residential complexes and houses in which areas with which infrastructure with tenants are the most in demand. We appreciate, among other things, with the help of well-known international portals, which specialize in the rental of real estate, apartments whose properties are booked most frequently. Based on this data, a general assessment of the real estate market of a particular region / resort / region is made. Then we choose from a range of guaranteed products for the customer a selection that meets the individual requirements and the budget.
In the company database, there are always several dozen ready-made offers that have proven themselves.
For example, there are several coastal complexes that have worked well and in these LCDs we have several apartments. We open booking.com or a similar website where there are rental apartment calendars and clearly show the relevance of certain apartments. Also in autumn, the reservation can be set until the next summer. In other words, you can calculate in advance how many people will earn by the summer when they buy an apartment today.
Select an object
When it comes to investment, the main factor in choosing the expected return is the budget. There is a general opinion that the more expensive a property, the more it can be earned, but that is not always true. In some cases, it pays to pay and save in others, which will only increase profitability.
For example, if a buyer has a 100-150,000 € and only wants to earn money for real estate, then immediately look for the three best known complexes on the Costa Blanca. They are known among tenants, there are many enthusiastic reviews and recommendations on the Internet. Owners of apartments always rent them successfully. In appearance, these complexes are like five-star hotels. They are equipped with everything: parking, 3-4 swimming pools, security. In one of them there is a bar near the pool.
For those who have a budget of up to 100 thousand euros, we offer options in the price range 70 to 90 thousand euros. These owners receive slightly less than those who have bought apartments in super prestige complexes - in the season 90 Euro -110 or 120-150 € per day. The difference is small, but the gap in the cost of housing is more impressive - about 70%. This means that the yield from a cheaper apartment is higher.
If there is money and the goal is only to earn, I would recommend to buy two apartments for € 80,000, not one for € 150,000 or two secondary instead of a new one. Of course we speak of similar apartments with proven rental prospects.
In cases where the buyer intends to combine the rent with their own use of the apartment, often only a new apartment is requested. Problems choosing this option in a good complex with high rental demand. All we have to do is understand that the budget will be more than € 100,000, and in the secondary market we can find cheaper and no less qualitative options. In addition, every rental property is brought to the "Hotel Standard" by the Espana Tour ...
Preparation for the delivery
In order to succeed in a second home, it is necessary that it look representative and fully equipped for livelihood.
Yes, these are additional investments, the amount of which is determined on a case-by-case basis, but they can and must be calculated in advance.
When choosing and buying apartments through our company, the specialists always negotiate with the owner, and often thanks to their efforts it is possible to "throw off" a thousand or two of the original value. Therefore, the cost of cosmetic repairs is minimized or generally zero.
There are drawbacks in absolutely every secondary housing, a scratch somewhere, a handle does not work perfectly, a stain on the wall and much more - all these little things and are eliminated. After cosmetic repairs, the case looks perfect.
All work with the apartment we take over: paint the walls, change the curtains, pillows, some dishes, we propose which devices to upgrade, and what to let, provide designers who offers a variety of furnishing solutions. The owner is completely free of worries. On request, he can go through the shops with our specialist and buy everything you need.
The average cost of repairs and furnishings is 1500-2000 €. We always choose properties that require minimal additional investment - that's the standard. If the customer has a desire and money for major repairs, we also offer such services.
From the practice of some repairs that we filmed for our YouTube channel: One apartment costs around 1100 €, the second - 1800 € and the third - 600 €. This clearly shows that repairing a customer will cost a little money, and the result will bring a good profit. Rental rates after it has been increased by about 20%.
As a result, according to the investment plan, the buyer receives a renovated apartment that immediately enters the rental market and begins to earn a stable profit.
The company is interested in selling not just an apartment, but an apartment that gives up well and generates high profits, as it itself is engaged in leasing, which means that we receive 22% of our profit.
The guaranteed return on the purchased rental property, the management of which we manage, is 5% to 7% per annum.
And this with deduction of expenses for taxes, advertising and business services. The total yield is 13-15%. This applies to real estate in almost every price category.
At the same time there is a value threshold, which has its own "financial feasibility". For example, there is an apartment - a new apartment in the first line of the sea for 220,000 euros. In the same complex there is a similar second home worth € 150,000. Both can be successfully leased at the same cost, but the financial benefits will be different, since the initial investment is substantial are different.
To earn on such a finished business, I would advise for 3-5 years. It's been so long since equipment and furniture fail. And we either have to update and continue everything by investing in the apartment € 3000-5000, or if in recent years have earned 15-20.000 € who are willing to invest, sell this apartment and buy a new, with more favorable properties , Or buy two similar or slightly cheaper apartments from which you can earn more than yours.