EXAMPLE 1 – earnings on holiday rentals in Spain
Buying an apartment in Spain for rent and sale in the future Aleksandra still lives in Poland, but she intends to move to Spain with her husband at the end of 2019. She planned to buy a flat in Spain with her husband at the holiday table in December 2017.
In February 2018, she bought a renovation property for € 50,000 with her own resources. The cost of buying the property was € 7,200, or around 14.4% (slightly more than the average cost when buying with own funds. This was due to the need to check the property before purchase to make sure that such a bargain price is not on the bottom. ).
The flat has 1 bedroom, a living room with American kitchen, a balcony overlooking the green areas. It is located less than a kilometer from the sea and beach in Torrevieja, and residents have access to the swimming pool in urbanization.
Aleksandra spent about 4,380 € on a thorough refreshment of the property and additional amenities such as TV, internet, new stove with induction hob, air conditioning, nice shower cubicle, bar lounge / fridge, where cold Spanish drinks are always waiting for guests.
After 2 months of purchase, i.e. in April, Aleksandra placed a rental offer on Airbnb for an average price of 60 € per night.
Good location, swimming pool and amenities make the offer attractive compared to the competition. From April to today, the average occupancy rate for a flat is 9 days each month. To date, the income from renting an apartment is therefore 3 months x 9 days x 60 € = 1620 €.
Aleksandra predicts that by the end of 2018 she will earn over € 5,000 (more than the cost of refurbishment), and plans to buy another property next year, this time for herself. Aleksandra plans to buy a new apartment for herself with a mortgage, whose installments will be repaid from the money earned on renting an apartment in Spain.
To get an idea of how much you can earn on holiday rentals in Spain, you should look at the Airbnb website (the link opens in a new tab).
One year after investment:
April-June 60 € / day | an average of 9 days of occupancy per month
July-September 65 € / day | an average of 22 days a month
October-December 40 € / day | average 8 days of occupancy a month
January-February 2019 | 35 € / day | average occupancy days per month
Property rental tax in Spain
The property rental tax in Spain consists of the following:
Income tax: 19% (€ 1405.05)
Property tax and municipal fees: 250 € / year
Media, small equipment: 120 € / month. (1440 € / year)
Cleaning: 0 € – cleaning costs are added to the rental price once, so the amount is balanced.
€ 7,395 (rental income) – € 1,405.05 (19% tax) – € 1,440 (utilities, equipment) = € 4,549.95 (profit after year – € 379.16 on average)
Return on invested capital:
Total investment: 50,000 € (real estate price) + 7200 € (purchase costs) + 4380 € (renovation, equipment) = 61 580 €
ROE = (€ 4,549.95 / € 61,580) x 100% = 7.39%
The return on investment in this case was 7.39% per annum. It is worth adding that the owners spent a significant part of the year resting in Spain in their apartment and looking for the next.
Moreover, property prices in Spain in 2018 increased by 5.7% on average per year, which for this property gives a value increase of € 2,850 a year.
Because Aleksandra and her husband bought a flat with their own funds and do not have to worry about loan installments, all they can do is enjoy their income.
EXAMPLE 2 – earnings from permanent apartment rental in Spain
In this example, we show how much you can earn from a permanent rental flat in Spain.
The calculations will be based on the example presented in the article Property purchase costs in Spain.
A 65m2 apartment, 2 bedrooms, a living room with an American style kitchen and a sunny balcony. From the balcony a view of the sea about 1 km away. Access to the communal pool for residents of the block. The nearest beach is about 1 km, in the area there are numerous restaurants, bars, amusement parks, shopping centers, administration facilities, doctor, pharmacy.
The flat was purchased for a bargain price of € 60,000 with a mortgage loan of € 42,000 and a down payment of € 18,000. Additional purchase costs were around € 10,000. So the initial investment out of your own pocket was less than € 28,000. (18,000 € own contribution + about 10,000 € additional purchase costs)
The monthly installment for 300 months (25 years) is € 231.15.
The owner rents a flat permanently for 420 €.
The owner earns around € 188.85 each month. The initial costs of € 28,000 will pay off after 148 months (12 years).
After 12 years, the owner earns € 188.85 a month and is getting closer to the point where he will become the owner of the property on the Spanish coast, which in the future he wants to leave to his daughter, who was recently born.
EXAMPLE 3 – earnings on renting Houseboats in Spain
ATTENTION: Detailed simulations of ROI – Return on investment in Houseboat for holiday rentals are also presented in a spreadsheet, which we provide after completing the form above.
Buying an apartment in Spain for rent is popular, but houses on the water, or Houseboats, are more popular. Scandinavians, Germans, Dutch and British have been eagerly buying them for years, and customers in the Spanish market have been increasingly interested in them in recent years.
Houseboats for sale in London People who want to live in southern Europe are beginning to appreciate the freedom of having a home on the water. Houseboat, which we offer for sale, you can swim on the sea at a distance of up to 2 nautical miles from the shore. The design category C allows it. Inland waters can be sailed anywhere at will.
As it is getting harder and harder to buy a property in Spain on the seafront for a good price, customers are beginning to look for alternative ways of living next to the sea. Meanwhile, the purchase of a Houseboat allows you to live as close to the sea as possible, i.e. even at sea.
One night you can spend mooring in the port for a small fee, after which you can spend the next night stopping at sea or on a nearby island near the coast – completely free of charge.
One night you can spend in Torrevieja, and the next night sail to Alicante. With a Houseboat, you’ll live in Spain for a month, another month in Portugal, then France.
But to the point – how much can you earn from renting Houseboats?
Because we have not found Houseboats rental offer offered for sale on globly.eu on any of the portals, we will provide examples for comparison.
Houseboat’s only offer for rent in Torrevieja, Spain on the Booking portal is: https://www.booking.com/hotel/es/marina-floating-home.pl.html
The rental price in September for 5 days is 1200 EU, which is less than 250 EU per night.
In the south of Spain, the season lasts long from April to October, even November, i.e. 6-7 months. Many tourists also come here in the winter season from December to March.
The presented Houseboat rental offer in the summer season was reserved for almost every day. In September you can find some free days.
So you can assume with a safe supply that with the right efforts you can rent a Houseboat in Spain for half a year – 180 days.
The calculation of earnings on rental in this case is as follows: 180 days X 1000 PLN = 180,000 PLN.
Monthly earnings of PLN 15,000 come out of this.
For example: with the amount of PLN 140,000 you invest in the purchase of a Houseboat with additional equipment – you lease a luxury Houseboat for PLN 1.4 million for 100 months – about 8 years with your own deposit of PLN 140,000.
Your monthly leasing installment is PLN 15,055 in this example. By renting Houseboat in this example, you earn about PLN 15,000 a month, so you earn almost all of the leasing installments from the money you earn.
If you try, you can go a big plus, and after 8 years, the luxury Houseboat is yours. For these 8 years, you and your family or friends will definitely manage to enjoy a wonderful holiday in a house floating in the Mediterranean.