Leaseback on the Costa del Sol

Main Factors

The concept of leaseback property purchase is simple: As the purchaser you buy the freehold of a fully furnished property outright and then lease it back to a management company for renewable periods of up to 10 years.  In return, you receive a guaranteed rental return, irrespective of occupancy, at a fixed annual amount, which often offsets the cost of your mortgage payments.  The rental return is net of all community fees, running and maintenance costs as these are covered by the management company for an initial fee. 

Leaseback gives great peace of mind and provides you with regular and reliable rental payments.  What is more, you are not exposed to fluctuations in the tourist market as returns are guaranteed, irrelevant of occupancy.  You have no worries about day-to-day management responsibilities such as looking for a rental agent, paying utilities, dealing with maintenance issues or insurance. 

Meanwhile you can even use your property yourself, or any other property within the group, for agreed periods of time throughout the year, an option normally unheard of on other leaseback developments.  Not only are investors buying into the best and most exclusive coastal locations in Spain, but they have access to their unit as well!

The leaseback system is timeless as at the end of the lease period, you have the choice either to live in the property or simply to sign a new leaseback contract with the management company for another fixed period of guaranteed income. 

A substantial government-backed VAT-refund system is an added benefit for investors in Spanish leaseback properties.  They are refunded the 16% VAT on the purchase price so that they only pay the VAT exclusive amount.  Then stage payments are paid in the following way:

5% of VAT inclusive price
25% of VAT inclusive price
Balance (VAT exclusive price less cash already paid)

The developers of Terrazas Costa del Sol however, pre-pay the VAT for their investors so that they only ever need to pay the VAT exclusive price, avoiding the need to raise the extra finance for the VAT. 

Six to nine months after property purchase, the VAT is refunded to the client who then passes it back to the developers.  However, the full VAT benefit is based on 10 years ownership and investors who choose to sell within 10 years owe the VAT back – they pay it pro rata and the new buyer reclaims any outstanding portion.

Potential capital appreciation continues to be good in Spain, while demand for property remains high from local and overseas investors.  As leaseback resorts are well located with many amenities and good accessibility that many normal properties may lack, they offer some of the most solid growth rates on the market.  In addition, rental income is linked to the Spanish Consumer Price Index, so appreciation in annual rental returns is guaranteed - over the past ten years this has averaged at around 3.4%.

Excellent finance terms are in operation and, subject to some income level checks, you should have no trouble getting Spanish banks to lend up to 80% of the purchase price of the property.  Euro interest rates are currently low which offer an added advantage to investors today.

The Developers/Management Company/Promoters

With a long, trusted and proven track record in the European holiday homes leaseback industry, the developers and management agents of Terrazas Costa del Sol are experts at keeping a watchful eye on localized property and tourism trends, offering investors the opportunity to purchase on exceptional terms.  The promoters are ISO 9001 certificate holders and have been working over the past 15 years in Spain to handle 7,000 new residential units per annum.

Terrazas Costa del Sol

Nestled in the Bahia de las Rocas, the Terrazas Costa del Sol development sits between Sotogrande and Duquesa Golf, near the village of Manilva and we believe it is an unbeatable leaseback opportunity.  It boasts all the facilities you might expect from a top class resort, with its beaches within walking distance, nearby golf courses, yachting ports, polo fields, kids’ clubs, swimming pools and plenty of family entertainment, as well as being easily accessed from abroad via Gibraltar or Malaga airports.  The site is located on a gentle slope affording exceptional south westerly views across the sparkling Mediterranean to Gibraltar and onwards to Africa.

Terrazas Costa del Sol incorporates some stunning Andalucian style architecture and will boast 328 apartments divided into 16 buildings. all set within beautiful, managed community gardens.  A reception and lobby, swimming pool with childrens’ play area, restaurant, bar, games and leisure areas as well as an underground car park are all provided for residents on the development.

With blocks 7 to 16 due to be delivered on 31 December 2008 and blocks 1 to 6 on 28 February 2009, purchasers are now moving fast to secure their units.

To find out more about the Terrazas Costa del Sol leaseback property development, please visit http://www.propertyshowrooms.com/IPIN/10260/Terrazas-Costa-Del-Sol.html.