Southern Spain has long been a target of shrewd real estate investors. Strong rental demand and low real estate prices have fuelled the investment market right along the south and east coast of Spain over the last 25 years. Leading the way has been the Costa del Sol.

The Costa delSol

The Costa delSol stretches from Nerja on the South coast of Spain (Nerja is officially one of the sunniest spots in Europe), right down to Gibraltar and its Rock. It takes in many famous investment hotspots along the way, including the likes of Torremolinos - site of the first hotels and apartments that were built to service the tourist boom of the 1970s - Estepona and the opulent coastal resort of Marbella. Pristine beaches, exquisite scenery, glorious weather and prestigious international golf courses are the hallmarks of this region. It is a combination that gives the Costa delSol a magical aura - an aura that brings millions of visitors here every year.  Marbella villas are always very popular.

Despite being the centre of investment attention for nearly three decades, the Costa delSol continues to provide some excellent real estate investment opportunities even today. Rental yields of around 5% or more can be achieved in many areas of the Costa del Sol. Real estate values continue to rise strongly year on year too, the highest capital appreciation being reserved for villas and apartments at the more luxurious end of the market.

The hottest investment opportunity right now in the Costa delSol though is not to be found in the traditional communities of Spanish villas that are so familiar to real estate investors in the South of Spain. Instead, it is to be found in an investment concept that would be more at home in France — leasebacks!

Spanish Leasebacks

Leasebacks are a type of real estate investment that allows you to buy a freehold real estate and then lease it out via a management company on a long lease of say nine, ten or eleven years. In return you as the investor receive a guaranteed income from the real estate and a guaranteed profit or rental yield for the term of the lease. At the end of the lease you can sell the real estate or you can re-let it for an additional nine or ten years either privately or sometimes through the same company! It could make you a fair amount of money, that's for sure!

In France leaseback properties are a very popular investment. In Spain, the leaseback concept is not so well known. This though is about to change.

The Terrazas Leaseback Opportunity in the Costa delSol

Terrazas is a new Spanish leaseback opportunity that hopes to put the leaseback concept in Spain on the map. It is a 328-apartment village in Bahia de las Rocas in Manilva on the Costa delSol coastline between Sotogrande and La Duquesa, and has been designed to recreate the look and feel of a genuine Andalusian village.

Prices for apartments start at just 174,000 euros, and include furnishings. The development is set to produce a guaranteed rental yield of between 4% and 5% per annum for 10 years.