How to best use or market property in Spain

For smart property owners in Spain

There are many properties i n Spain, which are barely used, if at all. On the Balearic island of Mallorca i n particular , many of these are holiday homes or rural ‘f inc as’ (summer cottages) with large plots of land. For foreign owners of property in Mallorca and across Spain, De Micco & Friends has worked with local partners such as the Balearic government, banks, financial experts, brokers and other service providers to develop a number of strategies, which allow property owners to make the best use of their property, to market it, to create liquidity or profit or to make the most of tax advantages. Below are s ome examples of how De Micco & Friends organises, structures and implements these strategies on behalf of its clients.

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Liquidity and profitability through financing and re-investment

The current interest rate situation for mortgages in Spain allows owners of fixed property, where there is little or no existing mortgage, to finance the creation of liquidity, which can then be used fror higher-interest investments. Together with a number of leading banks, De Micco & Friends has developed a plan where a property is financed at an interest rate of between 1.4 and 2%. The liquidity gained from the financing can then be reinvested in safe investments with a return of between 3 and 5 %.

Financing for those selling property

The model is not only useful for medium-term or long-term planning. De Micco & Friends has also negotiated special agreements with credit institutions for property owners who wish to sell their property but need liquidity or want to make the most of the interest rate differential, which allow unscheduled repayments of the mortgage to be made at any time. Especially in the case of properties, which have already been on the market for a long time, it can be useful to use this borrowing to bridge the time until they are sold. This means that sellers of property can also make sensible use of the offer. At the time of sale, the mortgage is then simply released with the payment of the purchase price. Depending on the volume and term, this unscheduled repayment can also be made free of charge. 

Your own wine labels

Owners of rural f inc a s with large plots of land can now use their unused land and generate a profit by growing their own wine. No experience in viticulture or marketing is required. As an experienced wine producer, the "Weinwert" company, whose managers from Germany offer a complete service package, which includes planting, care, upkeep, harvesting, the creation of your own wine label, bottling, storage and distribution of your wine after the harvest. As professionally grown and cultivated Mallorcan wine has gained international fame and popularity due to its quality, the growth in exports mean that the stocks are almost sold out every year . This wine value plan is not only an original idea, but also a medium-term investment opportunity to make unused land profitable.     

Holiday or long-term rental

For owners of holiday homes, which are only rarely used , it makes sense to rent the property during the unused time. The letting of property under the terms of a long-term lease contract (minimum term of 6 months) is a smooth procedure, which can be arranged at any time. Due to the positive economic development in the Balearic Islands and the associated influx of new residents, there has been strong growth indemand for housing. Properties in good locations are usually rented quickly. The prices per square met re are between 8 and 20 euros.

Holiday rentals, i. e. the letting of accommodation on a daily or weekly basis to tourists, is controlled by law in Spain and is now highly-regulated. The owner must apply for a licence to rent out accommodation to tourists in the Balearic Islands, where daily rates of between 100 and several thousand euros are now being charged, depending on the property and its location. In the meantime, only certain types of properties, such as detached villas, houses and f inc as, can be approved. Regulations for the different zones in the Balearic Islands have also been changed to control holiday rentals.

With the increasing number of tourists and the associated rising demand , holiday rental is an interesting option for homeowners to make their property profitable , as long as the  legal requirements are met, In particular, freestanding luxury properties can generate high income from holiday rentals during the peak season. De Micco & Friends helps its clients to review and apply for holiday rental licenses. 

De Micco & Friends Real Estate Lawyers

With more than 1,000 transactions completed, De Micco & Friends is Spain's leading property law firm. Our award-winning firm represents and advises both buyers and sellers in the acquisition and sale of private and commercial property. Experienced legal and tax experts help buyers and investors to find suitable property and then carry out the examination of rights, which is very important in Spain, the examination of approvals and possible third-party rights, they will check that there are no existing mortgages and arrange option contracts, notarisation and the secure transfer of property. Personal tax situations, family backgrounds or inheritance aspects are always taken into account and converted into the best possible methods of purchasing property, especially for foreign buyers and investors.
So that mistakes can be avoided , which in many cases are difficult or costly to correct, it is always recommended that you make use of the non-binding consultation service at De Micco & Friends, which is offered free of charge for the first, personal consultation.  

Here you can find all about the procedures of a property purchase in Spain. Please don't hesitate to contact us for any further question regarding real estate purchases.

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