Is it Profitable to Invest in Second Home on the Costa Blanca?

The housing on the Costa Blanca is experiencing a considerable increase in prices because of its great tourist interest, urban consolidation and magnificent sea views. A large number of investors tend to buy either holiday homes or long-term rentals to enjoy profits even in the offseason.

While buying a second residence could be a good way to drive profits, the regulations are different from primary home depending on whether you are opting for seasonal rental or ordinary rental. If you are planning to invest in a second home housing on the Costa Blanca, you need to do careful research to avoid making certain mistakes that might lead to financial losses.

What is the best real estate investment on the Costa Blanca?

Primarily, the best idea to invest your hard-earned money on the Mediterranean coastline is to buy for personal use and spend vacations with your family. At first, purchase it for enjoyment purpose and later, you can go with the option of selling it at the highest price possible. 

Another great option is a mixed investment where you can use it personally, enjoy the property during the part of the year and rent it out for a few months. If it is a long-term investment, you’d better go with a fixed-rate mortgage and be aware of fixed costs. Before carrying out any operation, you should have a clear understanding of the real estate market to avoid unpleasant surprises.

What factors to keep in mind when investing in the Costa Blanca?

There are various factors to determine a good property purchase such as location, neighbourhoods, infrastructure, living conditions, maintenance fees, and prices of other similar properties in the area. Above all, you should yield from the appreciation of the house as this could increase the profitability depending on the time period when the transaction has been closed.

Why Buying a Property to Rent Out Drives Higher Returns?

There is a massive increase in the demand for a holiday or tourist rentals which isn’t going to slow down anytime soon. According to the studies of the Bank of Spain, the gross return on property is at 4.2 per cent in Spain. In the Costa Blanca, the returns on home rentals are more profitable in inland locations and rise to more than 5 per cent for first and second-line properties.

If property buyers decide to invest in a rent out on the Costa Blanca, in areas closer to the coast like Finestrat and Benissa, they will enjoy higher profitability and returns. Usually, villa investors on the Costa Blanca go for holiday rentals due to greater yield, more enjoyment, lower risk of non-payment and close gold courses.