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​Holiday rental as an investment

7 Oct 2019
Holiday rental, investment

Holiday rental as an investment

As a realtor, I am often asked about the profitability of vacation rentals. And usually it's worth it.

Let's go from an apartment of 100,000, - euro including purchase costs. This apartment would have a price increase of 6% annually according to floor.com and other well-known portals in Spain. Okay, running costs and taxes reduce that amount and leave 5% left over the year.

Then the holiday rental, in our experience in recent years, we achieve a gross profit of about 8% of which the owner is paid 5.6%, of which he still has to bear the current supplier costs such as electricity and water, leaving at least 4% left, Together with the 5% of adjusted value added, this leaves about 9% pre-tax profits, which translates into 7.2% net profit.

I think it's worth it!

We are also seeing more and more investors in Alicante Real Estate looking for it, and for us it's a Winn Winn situation.