Off-Plan Property
ROI Calculator

ROI on deposit is calculated by dividing your total first-year return by the amount you deposited, then expressing that as a percentage. Your total first-year return combines your annual rental income and your Year 1 capital gain. For example: a 500,000 euro property with a 30 percent deposit (150,000 euros), 2,500 euros per month rental income, and 8 percent annual appreciation produces a first-year return of 70,000 euros (30,000 euros rental plus 40,000 euros capital gain). Dividing 70,000 by 150,000 gives a Year 1 ROI on deposit of 46.7 percent. This leveraged return is much higher than the gross yield alone because you are only measuring return against the capital you have actually committed.

For conservative planning, use 6 to 8 percent. For established investment areas with a track record, 8 to 12 percent reflects historical performance well. Prime Marbella, particularly the Golden Mile and Sierra Blanca, has delivered 14 to 16 percent in recent years and represents the upper end of realistic projections. Emerging corridors such as Estepona West and the New Golden Mile have averaged 9 to 13 percent since 2020 as infrastructure improves and demand from northern European buyers continues to grow. The default 8 percent in this calculator is a reasonable mid-range figure for planning purposes. Your actual return will depend on the specific location, developer, build quality, and the state of the market when you come to sell or remortgage.

Rental income varies considerably by location, size, quality, and how the property is managed. For long-term lets, a two-bedroom apartment on the Marbella Golden Mile achieves 2,500 to 4,500 euros per month. A comparable apartment in Estepona or the New Golden Mile achieves 1,600 to 3,000 euros per month. For short-term holiday rentals, peak summer months can achieve 3,000 to 7,000 euros per week for a well-positioned three-bedroom villa, though annual gross income is typically calculated on 60 to 75 percent occupancy after void periods and seasonal pricing. New build properties command a rental premium of 15 to 25 percent over equivalent resale stock due to their modern specification, energy efficiency, and condition.

The calculator provides indicative projections based on the inputs you enter. Rental income, appreciation, and yields shown are gross figures before operating costs. The calculation does not deduct mortgage interest, property management fees (typically 10 to 20 percent of rental income), community fees (2,000 to 10,000 euros per year depending on development), IBI property tax (800 to 4,000 euros per year), insurance, or maintenance. Purchase costs of approximately 12 to 14 percent of the purchase price are also excluded from the ROI calculation. These costs will reduce your net return materially. The calculator is designed for initial comparison and scenario modelling. For a full net return analysis, speak with one of our investment advisors.

The calculator uses your deposit as the measure of invested capital, which assumes you are either buying in cash or that your mortgage payments are covered by rental income. If your rental income exceeds your monthly mortgage payment, you have positive leverage, meaning the tenant is funding your loan while the property appreciates. Spanish mortgages for non-residents typically offer 60 to 70 percent loan-to-value on new builds at interest rates of 3.5 to 5 percent depending on the term and structure. For a 500,000 euro property with a 70 percent mortgage at 4.5 percent over 25 years, the monthly payment is approximately 2,600 euros. If your rental income covers this, your net deposit outlay is the primary capital metric to measure return against.

The calculator focuses on gross investment metrics and excludes: acquisition costs (10 percent VAT on new builds plus 1.2 percent stamp duty in Andalusia, plus notary, registry, and legal fees totalling approximately 12 to 14 percent of the purchase price); ongoing costs (community fees, IBI property tax, home insurance, property management, and maintenance, which together typically run 3,000 to 15,000 euros per year); and exit costs (approximately 3 percent agent commission plus Spanish capital gains tax of 19 percent for EU residents and 24 percent for non-EU residents on the net gain). Factoring in these costs gives you a more accurate picture of your true net return over the investment period.

Gross rental yield measures your annual rental income as a percentage of the property purchase price, regardless of how the purchase was financed. If you buy a 400,000 euro property and it generates 20,000 euros per year in rent, your gross yield is 5 percent. Cash-on-cash return measures the annual rental income against the actual cash you invested, which is typically just your deposit. Using the same example with a 30 percent deposit of 120,000 euros, your cash-on-cash return on the rental income alone is 16.7 percent. Cash-on-cash is the more relevant metric for investors using mortgage finance because it shows the return on capital actually deployed.

Off-plan investment generally outperforms resale on a total return basis for several reasons. First, you buy at pre-construction pricing before the market reprices at completion, which typically adds 15 to 30 percent capital appreciation during the build period. Second, new build properties command higher rents and attract lower-maintenance tenants. Third, stage payments spread your cash flow over the construction timeline rather than requiring full payment upfront. The main trade-off is liquidity: your capital is committed for 18 to 36 months before the property generates income. Resale investment offers immediate rental income and lower acquisition risk, but generally provides lower capital growth due to the absence of the pre-completion premium. Most experienced investors on the Costa del Sol hold a mix of both.

The minimum reservation deposit for most Costa del Sol off-plan developments is 6,000 to 10,000 euros to secure the unit. This is followed by an initial deposit of 10 percent of the purchase price at the private purchase contract stage. Further stage payments of 20 to 30 percent are typically spread across the construction period. The balance of 60 to 70 percent is payable at completion, which can be funded by a Spanish mortgage. Your effective minimum cash requirement to buy a 400,000 euro property is therefore approximately 120,000 to 160,000 euros in stage payments plus 50,000 to 56,000 euros in purchase costs, giving a total upfront commitment of approximately 170,000 to 216,000 euros before the mortgage is drawn at completion.