When it comes to choosing where to buy in Spain you'll find Costa del Sol property is relatively pricey compared with some of the up and coming areas such as Almeria, the Costa de la Luz and Costa Azahar. Marbella's glitzy Golden Mile is millionaires' row where property prices are among the highest in Spain. Properties become more affordable the further east and west you go from Marbella and they're cheaper still if you buy a little way back from the coast. The good news is that the Costa del Sol represents one of the best investment opportunities in Spain because it's one of the most popular holiday destinations so rental tariffs are higher here than anywhere else in the country, including the Balearic and Canary Islands.
Before you set your heart on the Costa del Sol, consider the main purpose of your Spanish property purchase. If you intend to live permanently in the property you might be better off plumping for a less tourist-orientated area where you'll be able to buy a decent-sized villa with a pool and garden for the same price as a miniscule studio apartment on the Costa del Sol seafront. But if letting potential is a key factor in your purchase then the advice from seasoned owners in the holiday property industry is to go as upmarket as you can possibly afford and nowhere has better letting potential than the Costa del Sol.
The most successful owners take advantage of the fact that this coastal area of Spain is a year-round holiday destination. With more than 60 golf courses in the region the Costa del Sol is regarded as the golfing Mecca of Europe and golfers from as far afield as the USA holiday here in the winter months as much as in high season (when the searing summer heat deters many sports enthusiasts).
Adjust your rental prices according to the season and you'll find you can let your property practically every month of the year. Holiday homes in the region generate an annual return of up to 8% and property prices are continuing to rise although the increases are likely to be less dramatic in the foreseeable future than we've seen over the last 20 years.
In fact the area has proved one of the most lucrative property investments in the world over the last five years when many owners have made staggering gains of between 30-100% within 12 months of investing their money.
A popular way to invest on the Costa del Sol is to buy into an "off-plan" project, putting a down payment of say 30% on a property yet to be built. Many investors have then sold their "option to buy" at a substantial profit even before the property has been completed.