Mallorca is a beautiful Mediterranean island off the coast of Spain; cultured, geographically diverse and blessed with the kind of climate which allows you to live outdoors for the greater part of the year.
Buying to let in Mallorca can be a viable and often, highly lucrative option, which allows you to finance your property on the island and have the run of the house when it is not rented.
There are a few simple guidelines to bear in mind when embarking on a buy to let in Mallorca.
Beware of low rates, mortgage rates rise and interest rates will rise again. However, in Mallorca, lower house prices, rising rents and better mortgage deals make buying property to rent a viable investment choice.
If you want to see our special SOL MALLORCA guide on buying to let: 10 steps to buying to let in Mallorca
Mallorca is small yet can vary greatly between areas, both in landscape, amenities and house prices. Properties in Palma and the southwest fetch premium rates due to proximity to the city and airport and the area has been overbuilt leaving few properties available for refurbishing. With good road connections and a new hospital in Inca, the north of the island is more attractive now as a buy to let area than ever and highly in demand as a holiday destination.
Buy to Let property rental agents tend to work in one given area and will probably try to hone your choice accordingly, so either choose an area and then find an agent in your area of choice, or pick a estate agent which a wider buy to let portfolio.
Buy to let hotspots include the north and east coast of Mallorca, while the privileged north eastern corner continues to fetch high prices but guarantees easy rental business on your property.
We recommend you look at property in the north of the island: Buy to Let in Pollensa and live in Mallorca part time
There is always going to be another house, a little bit more expensive, a little closer to the sea which will draw you in. By all means listen to your agent’s advice but be clear about how much you can afford. If you are financing the buy to let mortgage or loan, you need to calculate costs. Banks may charge commission on buy to let mortgages in Mallorca. Check the buy to let terms and conditions from the start.
When you purchase a buy to let in Mallorca, you are liable for Transfer tax. You will be required to pay a deposit, rates and Stamp Duty. Other fees include the Notary costs, who will charge you to register your new buy to let in Mallorca in the Property Register, charges for copies and his own personal fee. Agency fees also need considering. In total you are looking at an average 10%+ buy to let purchase price for added costs.
ALL YOU NEED TO KNOW about buying property in Mallorca, costs, fees and taxes
Before you lay any money down make sure you have the buy to let property you actually want.
Viewings are often arranged in sequence, with several house visits packed into a single day and it can be hard to remember all the details. Make sure you return to your buy to let in Mallorca at least one more time and double check the amenities, whether the villa is connected to the mains, etc. Have an architect or a builder check the structure too. The things which will end up costing you most are often hidden from view.
Neighbours are possibly your best buy to let gage in terms of ascertaining the buy to let business opportunities of any given house. Speak to them.
And document your viewings. Your smart phone is well equipped to take excellent photos of the buy to let in Mallorca so you can weigh up the pros and cons and review your buy to let property later, from the comfort of your home.
If you buying property in Mallorca and wish to let it out on a seasonal holiday basis, you are now required to hold a tourist licence. Failure to do so can result in hefty fines.
The body responsible for this is the ATB - Agencia de Turismo de Baleares or the Balearic Tourism Agency and they have a fleet of inspectors doing the rounds and checking up on holiday lets all over the island.
For more on this, see: How to get a licence to let your Pollensa property out as a holiday home
Aside from the actual costs of your buy to let property in Mallorca and all the fees, the mortgage and loans, taxes and rates, there are annual costs too.
The annual real estate tax (IBI) is paid to the town hall. Make sure the seller hands you copies of all previous paid bills, he/she is obliged to do so.
If your new buy to let is an apartment or part of a community you may have to pay community charges for a community pool, gardens, maintenance, etc.
Annual Wealth Tax is based on the value of your buy to let property.
Income Tax is based on income or revenue from the property, i.e.: rentals.
Buy to let House Insurance. Fire insurance is obligatory if you get a mortgage and life insurance can be used to guarantee payment of a loan.
For more tips on: How to make money from your property in Pollensa and how to make your property in Mallorca pay for itself and turn it into a lucrative investment.
Could it make any difference what time of year you buy property in Mallorca?
Is it easier to buy to let in Mallorca out of season?
Does the winter lend itself better to buying a property on the island?
It may seem unusual to claim that the month you purchase a house in will have any relevance at all, but on a seasonal island such as Mallorca, timing is essential: Why winter is a great time to buy a house in Mallorca
Buying your dream home in Mallorca and then renting it out during the peak season has made it possible for countless foreign property buyers to invest in a second home in Mallorca and have a base on the island for family holidays and weekend escapes out of season when, quite frankly, Mallorca is far more appealing.
It is a viable and interesting option for many potential house buyers and seriously worth considering.
Our Office in Puerto Pollensa
+34 971 86 57 67You can find us in Paseo Saralegui 48
07470, Puerto Pollensa
Our Office in Puerto Alcudia
+34 871 114 800You can find us in Carrer dels Mariners 8
07400, Puerto Alcúdia
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