Is it worth investing in a studio apartment in Costa del Sol?
Author: Eve Keerus-Jusupov, CEO of Merlis Homes SL.
I help you find your ideal second home or commercial property on the Costa del Sol.
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Investing in a studio apartment in Costa del Sol can be a wise financial decision, depending on your investment goals and market timing. The Malaga region attracts many tourists and foreigners, and there is strong demand for rental properties, especially in coastal areas. But read on.
Can a studio apartment be a profitable real estate investment, and how?
1. Rental Income. Platforms like Airbnb, Booking.com, and Idealista make it significantly easier to find tenants.
2. Value Growth. The Costa del Sol region has seen some of the highest property value increases in Spain. A studio apartment in a good location can appreciate over time.
3. Tax Benefits. Depending on your situation and local regulations, there may be certain tax benefits for real estate investors. For example, a property owner may receive a tax benefit if they allow a tenant to register their residency and live there long-term.
What is a studio apartment?
A studio apartment is a one-room apartment that typically consists of one large room that serves as a combined living, dining, and bedroom area.
How to recognize a good studio apartment investment in the real estate market?
1. Research the Location. Analyze local market trends, future development plans, and rental demand. Choose a location with high rental demand. For example, areas close to beaches, shops, restaurants, or transport links are especially sought after by tourists during the high season, such as the beachfront area of Elviria, the Calahonda area, Nueva Andalucia and Puerto Banus, the beachfront area of San Pedro de Alcántara, the coastal areas of Estepona, as well as the beach areas of Fuengirola and Benalmadena.
2. Inspect the Property. Check how the walls and windows fare in terms of soundproofing, the heating system, plumbing, and the overall condition of the apartment. I recommend using a checklist. Invest in well-maintained property or one that requires minimal renovation. This minimizes unexpected costs. However, if you find a property that needs renovation, but the price is favorable and the location is excellent, do not hesitate to renovate it.
The main pros and cons of buying a studio apartment.
Pros
- Lower Costs. Studio apartments are typically more affordable than larger apartments, both in terms of purchase price and maintenance expenses.
- Higher Rental Yield. Demand for smaller living spaces can translate to higher rental income potential.
- Easier Maintenance. Cleaning and maintaining a smaller space is generally simpler and more cost-effective.
- Location. Studio apartments are often located in central, desirable areas.
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Cons
- Limited Space. Studio apartments offer less room, which can impact comfort and quality of life.
- Less Privacy. A single-room layout means less privacy, especially if the living space is shared with others.
- Resale Potential. Reselling studio apartments can be more challenging.
When buying a studio apartment, these pros and cons should be carefully considered to find a property that suits your needs and goals.
In conclusion, investing in a studio apartment in Costa del Sol can be an excellent opportunity for both short-term rental income and long-term value appreciation. Like any investment, thorough research, careful planning, and understanding the local market are essential for success.
