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Property as an investment in Lanzarote
Anyone who buys a second home will buy for two main reasons, a return on investment or for their own use.
In this respect the Island of Lanzarote is a great choice. The island not only offers an excellent climate, an
extraordinary landscape but also a high standard of services that have been the catalyst for such investment.
Buying a property for your own personal use is in many ways the easier decision, but getting a great return can present complicated scenarios. There are two ways to go about this. Leave the property to appreciate or rent it.
The rental option will present many questions. Do I long or short let
it? Will I use an agency or manage it myself? Will I be happy if the property
just pays for itself or do I want an income?
When buying for rental purposes the choice of property is vital. In order to get short lets (tourist lets) the property will have to be of certain
standard. This is not only in accordance with the law but in general a
tourist will expect a high standard. Such amenities as a swimming pool, reception and security would be of necessity.
So, what returns can you expect?
It will depend on the property, the location and it's rental history. However a short term let could realise you between 10% and 15% return on investment per annum. A more realistic return for long lets would be 7% to 10%. With an average annual tourist occupancy of over 80% and huge demand for long lets from the working population, both options present great opportunities.
However the real winner at the moment is appreciation. In Lanzarote prices
rose 22% in the year 2000 giving some investors a combined return of up to
37% in 12 months.
For this reason Lanzarote has become a very popular choice
amongst the investing community and pleasure seekers alike.
Finally a short list of factors that effect the value of any Lanzarote
property.
- Location
- Proximity to coastal areas
- Views
- The quality of construction and the state of preservation
- The age of the property
- The state of installations
- Quality of materials used
- Services and infrastructures in the area
- Public transportation
- Proximity to schools, commercial centres and sporting and leisure facilities
- The absence of noise and proximity to roadways with a lot of traffic etc.
Good luck with your choice.
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