Castellar - Sevilla

 Buy to let then flip
Sevilla, Spain
Status
Done
164 206 € (100%)
164 206 €
58 investor(s)
Interest payment schedule: Part monthly and another part at the completion
9.9%
Annual yield
-
LTV
First
Mortgage rank
No
EVOEstate skin in the game

EvoEstate comment:

This is not skin in the game project due to 2 reasons:

1. There is no data on ground floor property sales.

2. We have another AirBnb Sevilla project in our portfolio

Brickstarter:

Why invest in this apartment?

  • Very High Profitability Rate (IRR) =9.9%: recurring income and goodwill with its sale.

  • Very High Profitability Cash on Cash: High monthly recurring income of 5.71%.

  • Ready to start earning money: to take advantage of the whole season.

  • Apartment with private terrace: luxury and exclusivity for our guests.

  • Typology: small apartment: versatile and with upward employment and income ratios.

  • Breaks with the summer seasonality: Sevilla is visited every season.

Information about the apartment

¡We are here to stay!

We were slow to find our first opportunity in this city, but now that we are here, we want to continue betting on its special charm.

Seville is characterized by having high incomes in the tourism sector and little seasonality. It is the third city of Spain with the highest number of overnight stays. This year broke the records when we speak about travelers, overnight stays and hotel and apartment occupancy.

The data offered by the Tourist Data Center of Seville shows that there is a considerable increase in international tourists, much higher than that of national datas, in the first 6 months of 2019. Foreign tourists represent 60% of the total number of travelers that arrive, and this is increase of 8.06% compared to the first half of 2019.

Therefore, we launched this new opportunity in the historic center, one of the largest in Europe. It is a one bedroom and one bathroom apartment, where 4 people can live, perfectly located in the district with more income in 2018, and higher occupancy rate, the "Casco Antiguo" (Old Town).

 

Project summary

The apartment has a separate bedroom near the bathroom and a living room with kitchen when you enter. The good thing about this apartment is that both areas are separated by a corridor, which allows guests sleeping in the living room to have more privacy, since the bedroom door does not directly lead to the living room.

In addition, there are other reasons why the property is an excellent investment opportunity:

  • This house will have a great potential for revaluation, since it is an easily accessible ground floor and will comply with possible future legislative changes. They plan to limit tourist housing to ground floors and independent access to the street, and this apartment meets all there requirements.
  • Having a terrace makes it a highly demanded real estate asset. The terrace will be the letter of presentation of the apartment and will allow us to offer more exclusive services that will help us differentiate ourselves from other properties. This will allow us to increase the rates per night compared to normal apartments.
  • The property is located in the historic center of Seville, and this will allow guests to visit the main monuments taking a pleasant walk. It is located only 300m away from the “Palacio de las Dueñas” and the “Setas de Sevilla”.
  • This is a one-bedroom property with a bathroom, with a maximum capacity of 4 people. As we have seen in our market study, it is a very demanded typology in Seville, and it presents employment and income ratios with a clear upward trend.
  • Due to the exclusivity of the property, we expect some occupancy and income ratios above the average of other apartments of similar characteristics that also are on the ground floor.

Operation Summary

ConceptValue
Purchase price of the property (including renovation)147.900.00 €
Mortgage0,00 €
Cost of initial works2.000,00 €
Taxes, paperwork and other initial legal costs0,00 €
Company Constituion and Registration0,00 €
Other property acquisition costs2.631,75 €
Other expanses0,00 €
Minimum cash600,00 €
Brickstarter Fees (Only purchase)11.073,81 €
TOTAL164.205,56 €

Revenues forecast

ConceptValue
Yearly rent income17.777,47 €
Amount to be received for the sale197.046,67 €
Gross Margin (Sale Price - Purchase Price)20%

Financial information

The data shown in this section is a one year forecast after the property purchase.

Dividends

ConceptValue
Total dividends accrued0,00 €
Dividends paid0,00 €
Dividends in portfolio0,00 €

Operating return

IncomeValue
Rental income17.777,47 €

 

ExpensesValue
Brickstarter Commision1.060,27 €
Management5.333,24 €
Supplies1.560,00 €
Annual Property Tax281,50 €
Total expenses8.235,01 €

 

Other amountsValue
Amortization174,00 €

 

OPERATING RETURN9.368,46 €

Net profit

ConceptValue
Result before tax (Operating result + Financial result)9.368,46 €
Taxes1.405,27 €

 

NET PROFIT7.963,19 €

Investment information

ConceptValue
Revaluation of the property20,00%
Current value of the property165.370,00 €

Occupation

ConceptValue
Number of reservations57
Occupancy rate62,36%
Booked days228
Available days127
Blocked days10
Average Daily Rate78,75 €
Estimated annual income17.777,47 €
Customer satisfaction rating90,00%
Number of guests285

 

Market study

We are back with another opportunity in one of our favorite cities due to its “boom”, one of the cities where the holiday business is growing stronger. This is an excellent opportunity, which we could not miss because we know the difficulty of finding good real estate opportunities in Seville.

As we mentioned in our first opportunity, investing in Seville will allow us, not only to obtain excellent results in terms of profitability, but to break a great deal with the seasonality of our portfolios, since the weakest season of the city in concentrated in the months of July and August.

Seville has one of the largest historical centers in Europe (covering postal codes 41001, 41002 41003 and 41004), with multiple monuments spread over it. This causes the distances to be long and tourists want to settle close to the main points of interest.

In this way, these postal codes are the ones that present the main ratios in terms of average income per apartment and less seasonality. As we can see in Figure 1, these postal codes have had a constant positive evolution.

In Figure 2, for the case at hand (apartments with one bedroom and one bathroom, with a maximum capacity of 4 guests) we can see how the total income has been multiplying year after year, with a strong upward trend. But there is more, and in addition to the sharp increase in total income and the consequent increase in tourist apartments, we can observe a strong growth in average monthly income during recent years.

This is a trend that we have been seeing in the last few years, and that is also reaffirmed month by month.

As we can see in Figure 3, despite the increase in the number of apartments with this features, the average income per apartment continues to show a strong upward trend.

(In the first year of project life, we always correct the downward forecast, since it takes a few months for the apartments to properly position themselves in the search engines). 

If we do a study for months, we can see how, unlike other regions, the low season of Seville is located in hte hot months: July and August. This will allow us to diversify our portfolios, reduce risks and maximize benefits.

 

Status
Done
164 206 € (100%)
164 206 €
58 investor(s)
Interest payment schedule: Part monthly and another part at the completion
9.9%
Annual yield
-
LTV
First
Mortgage rank
No
EVOEstate skin in the game