With the “Porta Holiday Returns Calculator” investors can calculate what income can be obtained with a holiday house.
Unsettled by the fluctuating capital market and threatening penalty interest rates, Germans currently prefer to invest their money in real estate and due to the increasing overheating of the domestic real estate markets more and more investors are looking abroad, preferably at Mallorca, the Germans’ favourite island. These new buyers purchase not only for their own holidays, but seek to acquire a property in Mallorca quite specifically as an investment.
But how much income can you earn from vacation rental? In cooperation with our subsidiary, the holiday house agent Porta Holiday, the Freiburg Centre for Real Estate Studies developed the “Porta Holiday Returns Calculator“. This is a new service tool that allows investors to calculate potential income from holiday rentals in relation to purchase price and ongoing operating costs.
As a data base, around 900 rental holiday homes were selected in Mallorca, which were classified according to regions and equipment features. The result is average weekly rates per region, which vary according to location, amenities and season. Those who do not want to miss out on luxury during their summer holiday in the south-west of the island need the deepest pockets at around € 7,000 per week rent, and the most reasonably priced luxury rentals are in the South where the average weekly price is € 3,300.
The Returns Calculator also shows the running costs with which owners have to reckon, such as house and pool cleaning, gardeners, marketing costs etc. The return calculations show that it is often worth investing in the most desirable locations, beautiful views and luxurious facilities. Despite higher purchase prices, more attractive returns can be generated with such objects.
Peter Haller, chief editor of the real estate magazine Bellevue and operator of the Mallorca blog Elephant 10, has been familiar with the holiday property market on Mallorca for more than 30 years and has tested the Returns Calculator. His judgment:
“A well thought-out and valuable tool, highly recommended for those who are thinking of using their Mallorca property as a capital investment.”