The real estate market in Mallorca has always been dynamic, and with the closing of 2024 approaching, many potential buyers and tenants are asking themselves: it's better to buy or rent at this time?
From our experience as a real estate agent on the island, we have analyzed the advantages and disadvantages of both options, taking into account costs, property availability and expectations of future profitability.
Below, we offer you a comparative guide to help you make the best decision based on your needs and objectives.
Advantages:
1. Long-term investment
Buying a property remains one of the best ways to secure a long-term investment, especially in a place as sought after as Mallorca. The island continues to be one of the most popular destinations for both residents and international tourists, which ensures a constant revaluation of properties in many key areas. If you buy now, the value of your property is likely to increase over the next few years.
2. Property availability
Although the real estate market in Mallorca can be competitive, we have observed that the end of the year tends to be quieter. This means that buyers have less competition and more scope to negotiate the price of a property, especially with sellers looking to close a sale before the end of the year.
3. Opportunities for appreciation
Properties in emerging or less saturated areas of Mallorca offer great appreciation opportunities. Buying in the last quarter of the year allows you to get ahead of possible price increases that may occur in 2025.
Disadvantages:
1. High upfront costs
Buying a property involves significant initial costs, such as the down payment, notary fees, taxes (ITP and VAT), among others. Although these costs are to be expected, they represent a significant outlay, especially when compared to the cost of renting.
2. Responsibility for maintenance
Being a landlord implies taking care of the maintenance and possible repairs of the property, which can become an ongoing expense, especially if the property needs renovations or improvements.
3. Less flexibility
Buying a home ties you to a specific location. If you are not sure you want to live in Mallorca long term, the flexibility offered by renting may be a more suitable option for your circumstances.
Advantages:
1. Lower initial costs
One of the main advantages of renting is that you do not have to face the initial outlay of buying a property. Although rents in Mallorca have risen in 2024, the entry cost is still lower than buying, as only a deposit and the first months' rent are required.
2. Flexibility
If your plan is to be in Mallorca for a limited period, renting offers great flexibility. You can easily move to other areas of the island or even to other destinations if your circumstances change. This option is ideal if you have not yet decided which part of Mallorca best suits your lifestyle or needs.
3. No maintenance responsibility
When renting, the owner is in charge of the maintenance of the property. This means that you will not have to worry about repairs or improvements, which can mean significant savings in unforeseen expenses.
Disadvantages:
1. Steady increase in rents
In 2024, rents in Mallorca have continued to rise, especially in high demand areas. This means that, although renting may seem more affordable in the short term, you could be spending more in the long term without getting the added value of owning a property.
2. Lack of long-term investment
Renting does not generate any financial return. Every month that you pay rent, that money goes to the landlord without contributing to the creation of an asset in your name. In the long run, this can be a considerable disadvantage compared to buying, where each mortgage payment brings you closer to full homeownership.
3. Less control over the property
By not owning, you are subject to the landlord's decisions, which may include rent increases or even the need to move if the landlord decides not to renew the lease.
Buying: If you intend to stay in Mallorca for the long term, buying a property can be an excellent investment. The revaluation of the real estate market on the island is stable, and is expected to continue to rise in 2025. In addition, if you decide to rent your property when you are not using it, you will be able to generate a constant passive income, especially in tourist areas.
Renting: If you plan to be in Mallorca only temporarily or if you are not ready to make the financial commitment of a purchase, renting is still a viable option. However, with rental prices on the rise, it cannot be ruled out that long-term rentals in Mallorca will become an increasingly expensive option in the coming years.
The decision between buying or renting depends largely on your personal circumstances and your long-term expectations. If you are looking for a solid investment and see yourself living in Mallorca for many years to come, buying a property in the last quarter of 2024 can be an excellent option, especially with the current market conditions. However, if you prefer flexibility or are not ready for such a large financial commitment, renting still offers advantages, albeit with the risk of a steady increase in prices.
In either case, our recommendation is to consult a real estate expert who can guide you according to your needs and objectives, and we are here to help you make the best decision for your future in Mallorca!
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