Here’s an interesting question. Is owning a property in Puerto Pollensa (or Spain in general) a “good investment?”
We paid around €135000 for our one bed
apartment in Pinaret in 2018. Add to that the 10%, or in our case 11% legal costs. (around €150000)
We don’t rent, so no income, which in my view would be fairly minimal when you factor in that we want to be there as much as possible (we’re retired), your tax liability, additional maintenance etc. Plus living in the Covid era reduced any renting possibilities. This may change, but who knows to what extent (You may feel differently to this, but the hassle and stress would be a nonstarter to us)
Wealth tax payable yearly on a non rental for our apartment including solicitors fees completing our tax return is around €340, additional costs like insurance, community charges etc around €450. Electricity charges aren’t easy to understand even if you are a seasoned owner, but maybe around €600 a year Add to this any minor works you might need/want to do (fix that leaking tap, move that annoyingly placed socket etc), so let’s say an outlay of around €1400 per year
We had air con fitted too at €3000 but others might not want to do this
I haven’t researched the annual increases in prices but lets say maybe 5-7% a year, so over 5 years (around €170000) so that might increase your investment on paper by €15000 with an accumulated expenditure of around €6000 leaving a paper profit of around €9000
Let me add at this juncture, I am being very approximate with these figures. There is compound interest etc which, as I have not calculated this may or may not annoy you (sorry about that if it does) I also may have overlooked something major which might alter these figures dramatically one way or another, who knows, I’m sure you’ll point them out 🤣
Of course you need to add outgoings like, actually travelling to and from your property from UK, plus spending money whilst there. You might say, “well we go on holiday anyway”, but I can assure you, actually having your own little home there, and having the odd “cheeky weekend” is going to be a difficult temptation to resist
When you come to sell, you’re going to pay maybe 5% to the Inmobiliaria, and Capital Gains Tax on any profit.
So I would say financially, not a brilliant investment, particularly when you consider the large amount of capital you put in. Also, if you are getting a mortgage, obviously that will impact these figures dramatically.
Having said this, there is one element that totally swings it in favour of owning a little place there…and that is that you own your own little place there 😎. We get huge pleasure from just being in our “own home” 200 meters from the beautiful bay. You’re not renting, you’re owning. It’s not a two week holiday, it’s spending quality time in your home. For us, being able to spend long periods (well 90 days in 180 since Brexit) and forgoing the 14 night eating out, is by far outweighed by the lovely evenings strolling up to the sea front in cut downs and an old t shirt after a day of painting a bedroom, or sorting out some cupboards, then stopping at the local bar, Bar Bondia in our case, for a beer or a coffee with other owners who have become lovely friends
You may feel very different to us. You may have had experiences that are totally opposite to ours, and for that, we are very sorry. You may see the figures differently to ours, I mean I’ve only owned property in PP for 30 years, so I might be wrong 😂, but my advice to anyone who has thought of owning and is teetering, do it. You may regret it, but I doubt it