Tips on buying an investment property in Mallorca
Knowing what to buy as an investment property is just as important as understanding where the most profitable rental properties in Mallorca are located. Mallorca is a paradise island, attracting thousands of foreign buyers and investors to purchase real estate in the Balearics. There is a vast selection of properties to choose from; new developments, luxury villas, sea view apartments, all providing a good cash flow due to the demand from tourists and tenants looking for quality homes.
Explore various types of investment properties
As an investor, it’s important to understand what type of investment property suits your expectations. For example, single-family homes with holiday licenses are perfect for short-term accommodation on platforms such as Airbnb. Holiday rental laws have changed in the recent years, and it is now prohibited to rent out your property without a holiday license. To ensure your investment property qualifies for a holiday license, it’s important to rely on professional agents.
Buy homes in Mallorca with holiday licenses
Without a doubt, the easiest way to start an immediate cash flow from your investment property is to buy a villa or country estate with an existing holiday license. Investment properties in Mallorca with holiday licenses are in short supply and high demand considering all the new laws changes prohibit many properties from being used as short-term or holiday accommodation. Homes with holiday licenses have gone through a thorough application process and meet legal requirements.
Invest in sea view apartments in Mallorca
Although apartments in Palma are no longer allowed to be rented as short-term accommodation, luxury sea view apartments can still fetch an attractive price when renting long-term on a monthly basis. Many expats and foreigners choose Mallorca for its great weather and beaches, choosing to rent homes close to the sea. Hence, it’s always a good idea to buy a sea view property in Mallorca if you want to invest in real estate that’s constantly in high demand.
Choose luxury villas in the southwest of Mallorca
Compared to other parts of Spain, Mallorca was relatively unaffected by the economic crisis back in 2014. The island’s quality of life and influx of foreign buyers kept the real estate market solid. It is said that the luxury property market in Mallorca will rise 6% each year until 2022, with a lot of activity taking place in the southwest of Mallorca. Many families who relocate to Mallorca choose to rent a luxury villa before buying, so there’s always a stable market for villas for rent.
Buying an investment property in Mallorca with a loan
If you are considering buying an investment property with a loan from a local bank, it is important to know all the legal requirements and prerequisites. For example, it is essential for foreign buyers to possess NIE documents. It is also important to point out that the downpayment percentages for foreign investors are also higher (approximately 30%) compared to Mallorca residents. Balearic Properties can advise foreign investors when it comes to buying property as a geared investment.
Understanding the legal aspects of investing in real estate in Mallorca
To avoid buying the wrong rental property in Mallorca, it is important to rely on professional real estate experts and lawyers to help you make the right decisions. Renting your property in Mallorca to tourists without a holiday license can lead to fines up to 400,000€. On the other hand, the new laws are increasing the demand for holiday homes and hotels with licenses now that many apartments are out of the equation for investors looking to buy short-term rentals in Mallorca.
Balearic Properties will help you find your investment property in Mallorca
Come visit one of our offices in Pollensa in the north of the island, or in Puerto Portals in the southwest of Mallorca. We have over 20 years of experience in dealing with real estate in Mallorca, particularly with luxury villas, holiday homes and other commercial investment properties. Allow our international team to guide you and advise you on the best property investment options available with a high ROI. Contact us today to find an attractive investment property in Mallorca.