138 506.00 €
Type: Buy to Let
Interest payment schedule: Monthly
Min. amount of investment - € 100
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Macro Location Analysis
EvoEstate Risk rating is of an informative nature only & can not be considered investment advice.
A brand new opportunity in order to maximize our revenues just before the holiday season. As you know, the summer season includes the period from July to August, and now that tourists are back, you must hurry up in order to have this new opportunity ASAP. It took the originator many weeks of market research to find this property and this is probably one of the last COVID bargains.
This opportunity is similar to one of “San Telmo I”, the one in which the originator got the highest yield (40%) for the investors ever. They are buying this property from a bank with a high discount on the initial starting price, especially taking into account its location and typology. This is a perfect apartment for not only short-term rentals but also for mid-term rentals as the originator knows from their previous experience is “San Telmo I”.
We are assuming the COVID crisis is not over yet:
Although this property is perfect for tourists, and the originator will get all the required permits as soon as possible, the goal is to rent it as a mid-term property: this is the main assumption in our business plan, in order to avoid future effects of the COVID-19.
Once the COVID crisis is over, it will be rented out as a vacation rental property the whole year, and the final project yield will increase, but for the time being, one must be conservative on our assumptions.
As we know there is a large demand in Cadiz for mid-term rentals as the land is scarce, but is holding a large University, (more than 25 thousand people), several Hospitals and many Government offices. Although is not as profitable as short-term rentals, it is still a great solution for the low season. To summarize, in our business plan, for the whole 4 years, it is assumed that:
Obviously, is it going to be rented out as vacation rental property the whole year as soon as it is more profitable than mid-term rentals. In this scenario, the yields will increase, but for the business plan, it has not been assumed.
Reasons to invest in this new opportunity:
The main reason to invest in this property are:
The property has been acquired from an investment fund with a great discount on the initial sale price.
It is a spacious property, with a very good distribution: Living room with integrated kitchen, an independent double room, a complete bathroom, and a large terrace that gives the property great luminosity. Both the living room and the bedroom have large windows and so very bright rooms. The room also has a beautiful white lacquered built-in wardrobe, which together with the parquet, makes the entire apartment modern and stylish.
The distribution is perfect both to welcome guests in the middle of the stay, as well as for the holidays, as we have defended in each of our opportunities of this same type.
It is a very versatile property, with a capacity for up to 4 people, perfect for couples, small families.
The location is undoubtedly the best thing about this apartment since the historic centre is the neighbourhood most in demand by tourists, students and officials. The walking distance to the main points of interest, according to Google Maps, is:
University of Cádiz (medicine): 1 minute (110 meters)
University of Cádiz (vice-chancellor): 2 minutes (180 meters)
San Rafael Clinic: 3 minutes (250 meters)
Catholic University of Cádiz: 4 minutes (350 meters)
La Caleta Beach: 6 minutes (550 meters)
University of Cádiz (economics): 7 minutes (600 meters)
Women's Hospital: 7 minutes (600 meters) Hospital la Salud: 9 minutes
To carry out our business plan we have assumed that, throughout the life of the project, it will be rented on a half-stay basis during the periods of 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 is working.
In other words, we start from the premise that the vacation rental will not be recovered 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 income in the holiday regime in Cádiz is the month of February, due to the carnivals).
It is also important to take into account the characteristics of the real estate market in Cádiz, where the land is geographically limited (it is a peninsula), and there is a high demand due to the presence of universities, hospitals and other public bodies (City Council, etc..).
Finally, add that the historic centre of Cádiz is the main tourist attraction of the city, since that is where the main tourist attractions are located, the Cathedral, La Torre Tavira, the Gran Teatro Falla.
To estimate the average stay income, we have taken as a reference the income at which we have rented our current apartments, specifically our “San Telmo” opportunity (apartment very similar to this one), rented for 550 euros per month.
Only the presence of the University of Cádiz, with more than 20 thousand students and almost 5 thousand employees among professors and other service professionals, causes a high organic and stable very high demand, which absorbs the entire supply. If we did a quick search on Idealista (the leading portal in Spain), and we looked for furnished apartments in the historic centre, we found only 109 properties.
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.
Please note, the project will be launched on the originator's site on Monday. EvoEstate gained an exclusive offer to launch the project one business day earlier. The documents will be uploaded on Monday once the project is launched on the originator's site. All investments from now until Monday evening for this project can be cancelled.