Making money on your real estate in Mallorca
There are several options for anyone looking to turn their property purchase into a lucrative investment in Mallorca. Whichever option you pick, it’s important to do thorough research and work with experienced professionals, maximizing the possibilities for success.
Buying, renovating, and selling a Mallorcan property
Savvy property hunters confined properties ready for renovation around Mallorca. This might be a traditional, well-built townhouse in need of some TLC, a rustic finca in the countryside, or a seaside villa or apartment in need of a little update.
If you do decide to renovate, it’s important to consider all your outgoings and make sure that you can make a profit. Consider the area you’re buying in, too. Mallorca may be a relatively small island, but it’s full of surprises and some areas are particularly desirable.
A local estate agent with knowledge of the market will be able to help you find and sell your ideal property. They may be able to recommend construction and design businesses, too.
Buy property and offer for holiday rental
There are many different options for renting in Mallorca, so it’s important to investigate the option that suits you. When it comes to holiday lets, there are specific regulations in place. Before the property can welcome its first paying guests, you’ll need to make sure it has an ETV license (holiday rental license). This is mandatory in Mallorca.
Large country estate with holiday rental license in the most exclusive location in Pollensa
Certain properties are not eligible for this license, for example because they are zoned in a specific way. To avoid disappointment, buyers have the option of choosing a property that comes with a holiday let license already in place.
When you’re sure that a holiday let is the right choice for you, it’s time to consider management options. You might be able to run the business yourself, but equally you might find it helpful to contract the services of a company who can do everything from changeovers to 24/7 emergency help.
Build a property in Mallorca and sell
Desirable plots could pop up anywhere across Mallorca, but location is key. A room with a view is always a selling point!
It’s important to research any restrictions. There might be zoning rules (perhaps the land is only suitable for agricultural use), urban planning laws (in an old-town for example), or other restrictions in place.
Exclusive building plot with license for sale in Santa Ponsa
Anyone looking to build their own property will need a good team, including architects and solicitors, who can make sure everything is done by the book and to the best standards.
Another route is to buy an off-plan property. With this option, you might get favourable prices, your choice of décor, or the best units. Your estate agent can help you through the process and tell you about the latest developments on the island.
Things to consider about making money with Mallorcan real estate
It’s not just about finding the right property and the right buyer. There are many extra factors to take into consideration when looking for a return on your investment. Ideally, these need to be considered right at the start.
- Property-related costs
Experts usually advise budgeting 10 to 15% on top of your property price. This should cover extra taxes and fees, such as transfer tax and solicitor fees. If you’re in doubt, research which taxes and fees apply to your property and seek professional advice.
You’ll also need to think about how you finance your property. When you ask for a mortgage, banks will usually only provide 60 to 70% of the cost of the property (LTV) for foreign buyers. Even residents don’t usually get the full amount.
- Your time
Rules and regulations in Mallorca won’t be the same as those in your home country. It can take time, spent on researching and making applications, to implement any plans you have. This might be for residency permits or property-related documents.
For example, if you want to rent out your house, there are different rules for long-term and short-term lets. You’ll need to apply for a mandatory ETV license before you can let to tourists and not all properties are eligible.
It’s always best to make sure you have everything organized in advance to avoid delays when it comes to paperwork.
- The energy you put in
Where will you run your project from? If you plan on being abroad, do you have local contacts or businesses who can help with project or property management?
It’s easy to overlook the little extras, too, which can quickly take up your time. It might be making sure the property looks fantastic before a viewing, updating décor, or fixing everyday issues.
Having a good team around you, who are experienced and know the area, makes all the difference.
Balearic Properties – Local Mallorca Experts
If you’re thinking about buying or selling a property in Mallorca, we’re here to help. Our multilingual team offers bespoke services and can even assist with letting.
Because we’re passionate about Mallorcan property, we’ve made it our mission to know the local market inside out. So, we’re happy to help in any way we can.