← All returnsWorked example
Costa Cálida (Murcia) · New build
Los Alcázares
Net return, cash flow and equity build-up for this Spanish coastal investment. Below is the full calculation, assumptions and all.
Want to go through this calculation or talk about your situation?
Adjust settingsverschuif en zie het rendement live meebewegen
Financing60%
mortgage vs price
Occupancy100%
vs base assumption
Mortgage rate2.5%
per year
Capital growth3.0%
per year
Net return on cash invested
8.17%
What you keep from rent, measured against the cash you put in. Includes the leverage effect of the mortgage.
Cash flow per month
£613.26
Net rent per year
£12,739
Purchase and investment
Purchase price£285,470
VAT + stamp duty (IVA + AJD) (11,5%)1£32,829
Notary (0,75%)£2,141
Land registry (0,75%)£2,141
Legal / gestor (1,5%)£4,282
Total investment£326,863
Mortgage£170,940
Cash invested£155,923
Income3
| Season | Nights | Occupancy | Per night | Income |
|---|---|---|---|---|
| HoogseizoenJul, Aug | 62 | 78% | £170 | £8,225 |
| MiddenseizoenApr, May, Jun, Sep | 121 | 59% | £155 | £11,044 |
| LaagseizoenJan, Feb, Mar, Oct, Nov, Dec | 182 | 46% | £127 | £10,662 |
| Totaal | 203 nights booked | £29,931 | ||
Costs and charges
Fixed annual costs
Community fees£1,178
Electricity£2,027
Water£321
Maintenance£999
IBI (council property tax)£400
Refuse charge£111
Insurance£259
Internet£256
Alarm£513
Subtotal fixed costs£6,065
Variable and financing
Letting management (20% of rent)£5,986
Mortgage interest (avg. 7 yr)£3,822
Tax (after interest relief)2£1,319
Total costs and charges per year£17,192
Return
Net rental income per year£12,739
Gross yield on total investment9.16%
Net yield on total investment4.79%
Gross return on cash invested19.20%
Net return on cash invested8.17%
Mortgage payment p/m (repayment 2.5%)£766.87
of which interest (avg. 7 yr)£318.50 p/m
of which capital (avg. 7 yr)£448.36 p/m
Cash flow per month£613.26
Notes on the assumptions
- 1. Purchase tax and associated costs (notary, land registry, legal) are indicative and vary by region and property. Check the current rates with your gestor.
- 2. Tax is 24% on rent less costs, mortgage interest and depreciation (3% of the purchase price), via Modelo 210 for non-resident landlords. Costs remain deductible for UK owners following case law on free movement of capital. At a loss the tax is nil. To be confirmed by your tax adviser.
- 3. Rental income is an estimate based on seasonal occupancy. Actual income depends on location, management and market.
Equity over 10 years
Assuming 3.0% annual capital growth, 2.0% rent indexation and sale in year 10. On sale, 5% selling costs and 19% capital gains tax on the profit are deducted (exit tax £7,144). Plusvalía municipal is not included.
Total return
110.6%
on cash invested, 10 yr
Annualised return (IRR)
9.0%
incl. sale
Equity at end
£268,639
value less debt
Cumulative cash flow
£85,986
over 10 years
Built through repayment: £55,931Through capital growth: £98,178
| Year | Property value | Debt | Equity | Cash flow |
|---|---|---|---|---|
| 1 | £294,034 | £165,954 | £7,454 | |
| 2 | £302,855 | £160,843 | £7,695 | |
| 3 | £311,941 | £155,601 | £7,941 | |
| 4 | £321,299 | £150,228 | £8,192 | |
| 5 | £330,938 | £144,718 | £8,448 | |
| 6 | £340,866 | £139,069 | £8,709 | |
| 7 | £351,092 | £133,278 | £8,975 | |
| 8 | £361,625 | £127,339 | £9,246 | |
| 9 | £372,474 | £121,251 | £9,522 | |
| 10 | £383,648 | £115,009 | £9,803 |
This calculation is an indication, not tax, legal or financial advice. Purchase tax, interest, rental income, capital growth and tax may differ. Always consult a qualified adviser.
Talk it through?
Book a no-obligation call. We'll go through the calculation together, assumptions and all, and see what fits. No sales pitch.