← All returnsWorked example
Costa Cálida (Murcia) · New build
Velapi Golf
Net return, cash flow and equity build-up for this Spanish coastal investment. Below is the full calculation, assumptions and all.
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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
7.21%
What you keep from rent, measured against the cash you put in. Includes the leverage effect of the mortgage.
Cash flow per month
£481.20
Net rent per year
£11,074
Purchase and investment
Purchase price£281,197
VAT + stamp duty (IVA + AJD) (11,5%)1£32,338
Notary (0,75%)£2,109
Land registry (0,75%)£2,109
Legal / gestor (1,5%)£4,218
Total investment£321,970
Mortgage£168,376
Cash invested£153,594
Income3
| Season | Nights | Occupancy | Per night | Income |
|---|---|---|---|---|
| HoogseizoenJul, Aug | 62 | 68% | £188 | £7,928 |
| MiddenseizoenApr, May, Jun, Sep | 121 | 52% | £141 | £8,873 |
| LaagseizoenJan, Feb, Mar, Oct, Nov, Dec | 182 | 41% | £128 | £9,567 |
| Totaal | 180 nights booked | £26,368 | ||
Costs and charges
Fixed annual costs
Community fees£1,526
Electricity£1,248
Water£132
Maintenance£985
IBI (council property tax)£394
Refuse charge£111
Insurance£257
Internet£256
Alarm£513
Subtotal fixed costs£5,422
Variable and financing
Letting management (20% of rent)£5,274
Mortgage interest (avg. 7 yr)£3,765
Tax (after interest relief)2£833
Total costs and charges per year£15,294
Return
Net rental income per year£11,074
Gross yield on total investment8.19%
Net yield on total investment4.33%
Gross return on cash invested17.17%
Net return on cash invested7.21%
Mortgage payment p/m (repayment 2.5%)£755.36
of which interest (avg. 7 yr)£313.73 p/m
of which capital (avg. 7 yr)£441.64 p/m
Cash flow per month£481.20
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 £7,037). Plusvalía municipal is not included.
Total return
100.0%
on cash invested, 10 yr
Annualised return (IRR)
8.2%
incl. sale
Equity at end
£264,621
value less debt
Cumulative cash flow
£68,552
over 10 years
Built through repayment: £55,092Through capital growth: £96,708
| Year | Property value | Debt | Equity | Cash flow |
|---|---|---|---|---|
| 1 | £289,632 | £163,465 | £5,868 | |
| 2 | £298,321 | £158,430 | £6,076 | |
| 3 | £307,271 | £153,267 | £6,288 | |
| 4 | £316,489 | £147,974 | £6,505 | |
| 5 | £325,984 | £142,547 | £6,726 | |
| 6 | £335,763 | £136,983 | £6,951 | |
| 7 | £345,836 | £131,278 | £7,180 | |
| 8 | £356,211 | £125,429 | £7,413 | |
| 9 | £366,898 | £119,432 | £7,652 | |
| 10 | £377,905 | £113,284 | £7,894 |
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.
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