117 464.00 €
Type: Buy to Let
Mortgage rank: None
Interest payment schedule: Monthly
Min. amount of investment - € 100
|Criteria||From a+ to d||Project rating|
Macro Location Analysis
EvoEstate Risk rating is of an informative nature only & can not be considered investment advice.
Purchased at a 41% discount compared to the current offer
15% below the current sale price
Only requires minor improvements
At Brickstarter we are back with an excellent opportunity. It has cost us a lot, because prices are beginning to rise with the advance of the vaccination rate, and the good prospects of the summer market.
However, at Brickstarter we think that you have to be very cautious and not make the mistake of thinking that the market has recovered. We have to select very well the assets that we acquire. Monitor the market very well so that this opportunity that interests us does not escape us. In the end, our effort has paid off, since we have managed to close an opportunity that we can easily sell in the short term.
In fact, it is the cheapest opportunity we have ever acquired in Cádiz , both in global terms and per square meter. That without taking into account that it is in perfect condition. Both the property and the building in which it is located.
Buying it so cheap will allow us to establish an adequate sale price that allows us to sell the property as soon as possible. The sale price in idealista, for a flat with characteristics similar to this one, is set at € 2.304 / m2. You can see it here. Our target sale price is € 1,825 / m2; that is, 20% cheaper. Taking into account that we will sell the apartment in perfect condition, with license, supplies and furnished, it should not cost us much to sell the apartment since it is a bargain compared to the current offer of apartments.
The main characteristics of this opportunity are:
Ideal for holidays and half stays
Very spacious with capacity for 4 guests in half stay, 6 in vacation
When we put it up for sale it will be one of the cheapest apartments
The property is perfectly located in the historic center of Cádiz, in the iconic neighborhood of La Viña. Surrounded by the most important points of interest in Cádiz. The location is perfect for any tourist who wants to enjoy the charms of the city, for any of the 26,000 students and workers of the faculty, and for any of the inhabitants and workers of the city since it is close to hospitals, government centers, etc.
The walking distance to the main points of interest, according to Google Maps, is:
|Purchase price of the property (including reform)||€ 100,500.60|
|Cost of initial works||€ 9,100.00|
|Taxes, paperwork and other initial legal costs||€ 0.00|
|Incorporation and Registration of the Company||€ 0.00|
|Other costs of Acquisition of the property||€ 596.11|
|Minimum safe box||€ 600.00|
|Brickstarter Fees (Purchase Only)||€ 6,666.90|
|Annual rental income||€ 10,665.00|
|Amount to receive for the sale||€ 135,083.15|
|Gross Margin (Sale price - Buy price)|
The data shown in this section is a forecast for one year after the purchase of the property
|Total accrued dividends||€ 0.00|
|Dividends paid||€ 0.00|
|Dividends in portfolio||€ 0.00|
|Rental income||€ 10,665.00|
|Brickstarter Commission||€ 63.45|
|Total expenses||€ 3,378.95|
|Result of exploitation||€ 7,167.82|
|Financial results||€ 0.00|
|Profit before tax (Operating profit + Financial profit)||€ 7,167.82|
|Result of the excersice||€ 6,092.64|
|Revaluation of the property||15.00%|
|Current value of the property||€ 117,305.00|
|Number of reservations||82|
|Degree of occupancy||90.14%|
|Average rate per day||€ 32.42|
|Annual revenue estimate||€ 10,665.00|
|Customer satisfaction rating||90.00%|
|Number of invites||88|
Assumptions of the business plan:
This opportunity is within our investment typology "Flipping Houses"; that is, buy, reform and sell as soon as possible. Obviously, we will try to ensure that the apartment is never empty and we will take advantage of the characteristics of this apartment to obtain the maximum possible performance, and that includes renting it, in the best possible modality, during that process.
As we have already mentioned, we are going to obtain vacation licenses, since they add value to the property, and will allow us to rent it under this modality when tourism recovers and we see it appropriate. In the meantime, we will opt for the half-stay rental (for months) that so far is working very well for us in our other opportunities.
What we will not do, in principle, is to rent it for a long stay, since that would devalue the property.
Our goal is to sell it as soon as possible and for this it is necessary that the apartment does not have loads of any kind, so that the new buyer decides what they want to do.
However, to carry out the business plan we must make a series of assumptions to obtain the project numbers. In this sense, we have drawn a temporary 4-year scenario, in which we start from the premise that the vacation rental will not recover at any time . A conservative assumption since, if we can rent the apartment on a holiday basis throughout the year at least in 2023 and 2024, the income and profitability of the project would increase considerably. (The month with the highest holiday income in Cádiz is the month of February, due to the carnivals).
In this way, the property will be rented on a half-stay basis during the periods from October to May , and will be rented on a holiday rental basis during the summer months from June to September (included) . The model that we are currently using and that is working.
Half stay rental (October - May):
To estimate the half-stay income, we have taken as a reference the income at which we have rented our current apartments, specifically our opportunity at “La Caleta” (smaller apartment without a terrace), rented for 530 euros per month.
Only the presence of the University of Cádiz, with more than 20,000 students and almost 5,000 employees among professors and other service professionals, causes a high organic and stable demand, which absorbs the entire supply.
Holiday rental (June-September)
Even this year, with the COVID crisis, vacation rentals this year have worked very well in Cádiz (in Brickstarter in terms of income it has suffered a drop of only 5% compared to 2019), and even in low season, we are having occupancy rates much higher than those we have in other areas such as Valencia, Seville, Malaga or even Alicante.
To estimate the income of the vacation months, we have taken as a reference the income obtained in the vacation regime in 2020, the year of the covid.