Where to invest and what properties make the best investments

Everyone who buys a property in Mallorca is making an investment. Whilst these notes are primarily intended for those with a financial end-goal in mind, they will also provide useful guidance for anyone considering buying a property here.

The attractiveness of different areas and types of property in Mallorca as investments depends to a large extent on the type of investor you are your objectives.

Professional investors or companies are likely to have different criteria to those looking for a combined holiday home investment that they may wish to rent out part-time. (NB. People looking to purchase apartments for holiday rental should be aware of the regulations regarding the Tourist License in Mallorca - see our blog article Property rentals in Mallorca and the “tourist license” for more details.)

To some extent the factors that affect the investment are the same, and they are pretty straight-forward. Location is a key element and the type and quality of the property itself have significant baring, much as would be the case anywhere else.

However, there is a lot of variety in the landscape and character of different parts of Mallorca and there is a vast range in the price of properties. So investors need to consider what they want to spend and which areas / types of property will best suite their objectives.

Overview of Mallorca property investment areas

The following notes will also help to give an overview of the key areas and opportunities available.

Palma de Mallorca and areas close-by

Palma de Mallorca is one of the most elegant and cosmopolitan cities in Europe and is regarded as one of the most desirable places in the world to live. There are several areas in the City that stand out as attractive investment locations. Palma Old Town, Santa Catalina and Paseo Maritimo are at the top of the list with great potential for value growth despite being already recognised as prime property locations. El Tereno and Bona Nova are less well-known locations showing great potential.

On the eastern edge of Palma City there are a couple of "suburb" areas, specifically Portixol and Molinar. Again these are already recognised as prime areas but, for a number of reasons, are set to increase in value considerably over the coming years.

Heading westward out of Palma you first come to older resorts such as Cala Major and Santa Agusti. These represent interesting opportunities to renovate and resell at higher values or rent out as the resorts themselves are modernised and upgraded. Slightly further out are some of Mallorca's prime coastal resorts including Illetes and Bendinat. These offer some luxury villa rental investment opportunities and private holiday apartment investments.

• Palma Old Town - for classic old townhouse properties, apartment conversions in the same, and Old City Palaces to renovate. The palaces are highly sought-after and there are few available on the market. There are still opportunities however for serious developers with funds available to convert them into luxury apartments and the returns on such a project can be very good. There are more opportunities for renovation of townhouses and conversion into apartments, although good properties are also highly sought-after. The buy-to-let market in the Old Town is growing and provides interesting opportunities.
• Santa Catalina - for traditional townhouses and apartment conversion opportunities at slightly lower prices than the historical Palma Old Town area. The buy-to-let market is strong here, particularly for small apartments which are taken up on long-term rentals by people working in the yachting industry.
• Paseo Maritimo and El Tereno - Paseo Maritimo for old sea front apartments to modernise and bring into the long-term rental market while the area continues to escalate. El Tereno for more affordable renovation and refurbishment opportunities just behind the sea front of Paseo Maritimo. Buy-to-let offers opportunities in both.
• Portixol and Molinar - for old fishermans cottages (few renovation opportunities left), and sea front apartments for modernisation in what is gradually becoming one of the prime sea front locations in Europe. Increasingly this area is merging with Palma City and construction of a new conference centre between the two will accelerate this and increase demand further.

≈ Area guide to all locations in the the Palma City area

Southwest Coast Mallorca

The Southwest coast is perhaps the most well-known part of Mallorca. The prime up-market resorts such as Puerto Andratx, Nova Santa Ponsa and Port Adriano have eclipsed the rather outmoded "18-30" style resorts such as Magaluf, and even these are now being remodeled to appeal to a more up-market and all-year round visitors.

Opportunities in this region are primarily in the villa rental market and ownership of private apartments as holiday home investments.

• Puerto Andratx - for rental villas and some rental apartment investments. There are a few country house finca properties in the surrounding countryside and they offer very interesting renovation opportunities too. Little or no scope for new-build projects.
• Santa Ponsa - this is prime rental investment territory for villas and apartments. "Old Santa Ponsa" and some of the older villas are interesting as refurbishment projects. Santa Ponsa is in a prime location with a great beach and is set to more more up market over time. The older apartment and villa properties tend to have the best locations close to the sea and beach. Renovating these and offering them into the rental market represents an interesting property investment opportunity.
• Port Adriano - a prime area widely regarded as an investment "hot-spot" due to the expansion of the marina to cater for luxury super-yachts. The marina project is part-way complete and is already attracting more high quality restaurants and up-market retailers to the quay. A good area to invest in holiday investment villa and apartment properties.
• Palma Nova - for a slightly longer-term investment prospect similar to that of Old Santa Ponsa mentioned above. The Calvia Council have been remodeling Palma Nova and are continuing to improve the area with-a-view to catering for more up market visitors in line with the rest of the island. As one of the most popular holiday destinations in Europe this should equate to some very good investment returns over times for those with properties here - particularly those who refurbish and modernise.

≈ Area guide to all locations in the Southwest Coast area of Mallorca

Northwest Coast Mallorca

This is area spans the Serra de Traumantana Mountain range and has some of the most strikingly beautiful scenery in the Mediterranean. It is mostly made up of traditional small mountainside villages. Soller is the main town in this region and Deia is a very well-known location nearby.

Investment opportunities here consist mostly of country house fincas for the rental investment market and some of these offer renovation project opportunities too. There are also old traditional townhouses that offer the same.

Whilst Soller and Deia are the current focus and continue to show very good future investment prospect, more remote village such as Banyalbufar and Orient are very much in demand and this will only increase as more people seek such locations. It has to be said though there is not a great deal of property on offer in these places.

• Soller - for old traditional townhouse properties and apartment conversions. Also country houses on the mountainside overlooking Soller and the Soller Valley. There are renovated properties, generally modernised to a high standard and holding excellent rental-investment prospects. The more ambitious investors will take on such properties in their un-renovated state and take advantage of the increase in value that refurbishment and modernisation offers.
• Puerto de Soller - for similar opportunities although more focussed on smaller townhouses and apartments close to the sea-front. Puerto de Soller is one of the prime harbour location in Mallorca and set to increase in value further.
• Deia - if you can find a country house in the Deia area to renovate it is sure to be a good investment. There are one or two available so if this is of interest contact us and we can forward details.

>≈ Area guide to all locations in the Northwest Coast area of Mallorca

North Coast Mallorca

The north of Mallorca has dramatic mountain scenery as well as some of the best beaches and coastline. This area offers offers popular holiday destinations such and Puerto Pollensa and Alcudia. Alongside this there are classic and cultural old towns such, the most notable of which is Pollensa, and traditional rural towns such as Buger and Campanet. Investment opportunities are also varied, with holiday apartments and villas ranging through to country houses and traditional old townhouses.

• Pollensa - one of the most well-known and sought after locations this Mallorca Old Town offers buy-to-let opportunities with old traditional townhouses in particular. There are still good renovation opportunities too for higher capital returns. In the surrounding countryside are some of the best country house opportunities in Mallorca - also for the rental investment market which is very strong here, and some requiring renovation or modernisation. There are plots available too for new build projects and these are highly recommended.
• Puerto de Pollensa - for apartment and townhouse properties for the rental investment market, and in the surrounding areas there are some of the best coastal villa opportunities in Mallorca. There are plots available for new build projects.
• Cala de Santa Vicenc - for smaller coastal villas and apartments for the rental investment market. This is a small old resort town and proximity to Puerto de Pollensa and Pollensa Old Town coupled with lower prices makes this a very interesting location indeed. A place people are "discovering" and set for higher prices.
• Campanet and Buger - for Mallorca Old Town opportunities similar to those of Pollensa but at lower prices. As demand in Pollensa increases and supply diminishes these neighbouring towns are bound to get more of the spotlight.

≈ Area guide to all locations in the North Coast area of Mallorca

Northeast Coast Mallorca

The Northeast Coast is generally less well-known amongst the British than the North or Southwest coastal areas. It is increasingly popular and offers some interesting opportunities at prices lower than you would find in these other areas. The coastline is varied and very beautiful with some of the best beaches on the island. The improved road network makes these areas easily accessible too.

• Colonia de Sant Pere - for a holiday home investments in a real "get away from it all" resort. Refurbishment and modernisation of the existing apartments and villas is a route to investigate, and there are some plots too offering coastal villa new-build opportunities.
• Cala Ratjada - offers modernisation and refurbishment opportunities along with buy-to-let for the holiday market. This is an older resort with a great beach and very nice old fishing harbour area. We would place this alongside Southwest Coast resorts such as Old Santa Ponsa or Palma Nova as a medium / longer term investment prospect and interesting because of the lower prices.
• Capdepera - the area has some beautiful coastline and is excellent territory for holiday villas in particular, and these are at similarly lower prices than for other better-known areas. Font de sa Cala, Canyamel and Costa de Los Pinos are prime spots in the Capdepera area. Refurbishment and modernisation of villas for the holiday villa rental market is a particular opportunity in this area and there are plots for new build coastal villa projects as well.

≈ Area guide to all locations in theNortheast Coast area of Mallorca

East Coast Mallorca

This area continues with the stunning and varied coastal scenery of Northeast Mallorca. The distance from Palma and the airport has meant this area has been less of a focus although the improved road network means that thee area is very accessible. There are pockets of development here and there are new build and off-plan opportunities in various places.

• Porto Cristo - for high quality coastal villa properties along with apartments and townhouse properties. This is a slightly different type of market to many in this region as Port Cristo is very much an all-year-round working town. Coastal villas close to the town are sought-after so refurbishment of existing properties is a good route to follow. In the town refurbishment or investment in off-plan apartments also offers interesting investment prospects.
• Porto Colom - touted by some to be the "new Puerto Andratx", this is undoubtedly an area for investment if one can find good opportunities. Old townhouses in the town, coastal villas and country houses are all set to do well. Don't expect to pick up bargains in this area but consider the potential capital increase that could follow ...

≈ Area guide to all locations in the East Coast area of Mallorca

Southeast Coast Mallorca

Southeast Coast Mallorca also offers a a beautiful coastline made up of series of small coves and rocky inlets with sandy beaches. There are some well established holiday resorts such as Cala d'Or and also some much quieter locations too including Cala Figuera. This area is more seasonal and consequently more focussed on holiday investment properties.

• Cala d'Or - for holiday apartment and community townhouse property rental investment opportunities at prices that are slightly lower than for North Coast Mallorca and Southwest Coast Mallorca. Refurbishment and modernisation prospects are good in this popular resort town. Also some off-plan opportunities.
• Santanyi - for country house finca properties in the area. These properties are at lower prices than you would find in the North or Southwest coastal areas and the villa rental market in the Southeast Coast is also strong. Once again, refurbishment and modernisation offers and interesting route to higher capital gain on your investment.
• Calonge - within the Southeast Coast region Calonge has developed a certain cache. There are a few old traditional townhouse properties and country house fincas in the surrounding countryside are highly sought after and offer good investment prospects. There are some country plots remaining for new build projects.

≈ Area guide to all locations in the Southeast Coast area of Mallorca