We remind you that for all questions regarding the purchase investment properties in Spain/Alicante, you can always contact the experts of our company. We will be happy to help you find the most liquid and profitable offer, and we will also take care of all the transaction!
Apart-hotels: what are they?
This format of real estate such as apart-hotels is widespread in European countries. For Spain, this is a proven work area that has already gained particular interest among investors. Apart-hotels, in their content, are something between an ordinary residential complex and a hotel. Formally and from a legislative point of view, apart-hotels — these are hotels. However, if we talk about hotels in the classical sense, they have a single owner. In apart-hotels, the ownership right is assigned to each buyer in accordance with the object he purchased.
The fundamental difference between apartment complexes and multi-apartment residential buildings is that in the first case the emphasis is on service and comfort of the owners. Apartment cleaning, professional cleaning and trust management services are provided. Also, hotels with apartments may include. Most often, such facilities are located in the most prestigious areas, which are equally convenient for living and recreation. This can be seen especially clearly in Torrevieja. Here, apart-hotels are located near the seashore, in the mountains, as well as in locations with distinct resort specifics.
Of course, the favorable location of objects has the most positive effect on the level of potential income of the investor. The cost of real estate in such areas is growing rapidly, which is important both for purchase and sale transactions and in the rental segment.
It is noteworthy that starting from 2020, aparthotels have the opportunity to be certified and receive a star rating. The higher the hotel's rating, the higher the requirements for the level of service and maintenance. Accordingly, the financial return for investors also increases.
Advantages and disadvantages of apart-hotels
Investments in apart hotels — This is actually a great way to significantly increase your capital. However, some may be thinking between apartments and apartments. There is a difference between them, and it is quite significant.
If we talk about the most important advantages of apart-hotels, we can highlight the following aspects:
- Aparthotels are located in the best areas of the city;
- Given the advantageous location, you can get more rental income than in apartment complexes
- The cost of offers in them is, as a rule, 10-30% lower than in houses with apartment status;
- Possibility to transfer apartments to trust management and receive rental income.
Regarding the first point, I would like to note that in many cities, and in particular in Torrevieja, there are zones where the construction of multi-apartment residential buildings is prohibited. But there are no restrictions regarding apart-hotels. Accordingly, buying an apartment is the only way to purchase real estate in the location that is most interesting to you.
As for the disadvantages of investing in apartments, you should remember the following:
- The cost of utility bills is higher than in houses with residential status;
- You will not be able to get a tax deduction on your purchase;
- Property tax is higher than in apartments;
We also note that permanent registration (registration) cannot be issued in the apartments, since they are not formally residential premises. However, if you have an alternative place to stay and register, this is not a problem.
Investing in aparthotels Spain/Alicante
Globally, there are two ways to invest in apart-hotels:
- Resale of an object on more favorable terms;
- Renting out the property.
The most profitable and profitable way — This is the purchase of real estate at the earliest stages, at the start of construction work. The well-known axiom applies here: the closer the project is due for completion, the higher its price. Therefore, in Torrevieja, for example, many properties are quickly sold out literally on the day sales start.
When planning to invest in apart-hotels in Spain/Alicante through purchase and sale, you must take into account such aspects as the duration of construction work, inflation rates, and analyze supply and demand in the real estate market. In addition, you definitely need to study the reviews and business reputation of the developer — this will avoid a lot of problems in the future.
As for renting out apartments, there are two ways: do it yourself or transfer your property to trust management. The second option in practice turns out to be more profitable, even taking into account the fact that company representatives charge a certain commission for their services. Firstly, you get rid of the need to independently deal with finding tenants, moving them in and subsequent household issues (cleaning, minor repairs). Secondly, some hotel operators offer a guaranteed income service. Even if it happens that the apartments are idle (for example, during the low tourist season), you will still receive a stable income. Well, the time savings, of course, are colossal.
Profitability from investing in apart-hotels Spain/Alicante
It is impossible to say with absolute certainty how much you can earn by investing in apart-hotels. Each case must be considered individually. The greatest income, as we noted above, can be obtained from the resale of real estate. For example, in Torrevieja, since 2020, housing prices have more than doubled. Accordingly, the biggest winners were investors who managed to buy apartments before the start of the pandemic.
Now experts are also predicting a rise in prices. This is due to the unstable situation in the world, the general economic and political situation, as well as the complete loss of interest in real estate in northern Europe. To be fair, we note that this is relevant not only for apart-hotels, but also for other segments of the real estate market.
An alternative to resale — rental of real estate. Here, too, it is necessary to individually calculate the possible profitability. For example, in Torrevieja the maximum profit can be obtained at the height of the holiday seasons — summer and winter. At this time, rental prices here rise to their maximum. At the same time, it is most profitable to rent for a short-term period — from 1 day. At the same time, during the low tourist season, the apartments will also not be idle, but you need to be prepared for the fact that the income will be slightly lower than in the summer.
Risks of investing in apart-hotels
When purchasing apartments in a complex under construction, the most important risk for an investor is — this is an untimely deadline for putting the house into operation and bankruptcy of the developer. That is why you need to take the most responsible approach to choosing the most suitable option for investing your funds.
Another risk — the payback is not as fast as the investor originally planned. This is especially true for situations where the apartments are supposed to be rented out through a hotel operator. The company’s activities also need to be analyzed in detail and reviews read. Unfortunately, the practice still persists when representatives of trust management services do not approach issues of occupancy and check-in arrangements very responsibly.
It is also necessary to take into account the fact that apartments that are not legally residential real estate can be seized by bailiffs and sold for the debts of the borrower. However, if you are not a persistent defaulter and your financial burden is very stable, then there is no need to worry.
Best aparthotels in Spain
Today, in the resort capital there are more and more offers for the sale of real estate in apart-hotels. Developers, sensing increased interest from buyers and the prospects of this area, are offering new projects that must be taken into account.
Recommendations from ARCOSTEC experts
Investing in apart-hotels in Spain/Alicante — This is a way to significantly increase your capital. However, the issue of finding a suitable object must be approached as responsibly and seriously as possible. The most profitable format — This is resale. However, renting out apartments allows you to receive a stable income over a long period. The choice of the most optimal option should be entirely at your discretion.
By the way, today you can buy apartments using mortgage financing. The income will cover all costs, even taking into account the overpayment of interest. It is enough to have a minimum down payment amount to start investing in app
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