Nowadays, the needs of buyers and tenants are not the same as they were one or two decades ago. Modern lifestyles have led to an increasing demand for properties that offer flexibility and can adapt to multiple uses or situations, while being more economically accessible.

In this regard, at Brickstarter, we have always been attentive to market needs and dynamics, and we started by promoting vacation projects focused on generating income for our investors, without any guarantee. These projects aimed to generate returns from tourist rentals in key destinations. However, in our commitment to adapt to market dynamics and diversify our offering, we evolved and moved toward coliving projects, an innovative model that, although its expected returns may be lower, aims for more regular income. More recently, we have taken a new step in our evolution by incorporating change-of-use projects, taking into account the constant need to innovate in the real estate market.

These challenges also open the door to innovative opportunities that can be capitalized on. For this reason, we would like to promote a series of projects under a new type and investment model: Real Estate Flipping.

What is Real Estate Flipping?

Real estate flipping involves buying a property at a reduced price, improving its condition through renovations or upgrades, and then selling it at a higher price in a short period of time. The goal of this new model is to generate a financial result by taking advantage of any increase in the property's value after improvements; this result is not guaranteed. Although we are going to put our own “spin” on it! 

The key to flipping lies in speed and value creation. It's not just about buying low and selling high, but identifying properties with improvement potential and latent demand, performing renovations that make a difference in quality and functionality, and bringing the product to market precisely when the demand is ready to absorb it. 

This strategy aims to shorten the investment cycle; if a sale happens sooner, the estimated IRR could be higher, although neither the timing nor the result is guaranteed. 

It is worth noting that we have carried out operations with a similar approach (past data, not a guarantee of future results).

We will continue publishing medium-term projects; the IRR could be higher if the sale happens sooner, although this is not guaranteed. Our priority remains selecting opportunities that meet our criteria.

The difference is that now we are publishing them as such, and our short-term objective will be to sell them from the very beginning. To achieve this, we must change the approach to our projects and the assumptions of our business plan.

We invite you to read our blog post about the new Calle Lucena project, which is a very ambitious flipping project, and to visit the first opportunity of this new project, Calle Lucena Estudio-A.

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

A few months ago, Brickstarter made the decision to go a step further and promote buildings with changes of use, with the aim of adding value to our investments, without guarantee. These are much more ambitious opportunities, but with longer completion times, in which everything related to municipal permits, utility hookups, etc. takes longer.

These opportunities seek to add value through a comprehensive transformation of the property, with longer timescales and additional risks.

Although this new opportunity is not the largest opportunity we have promoted (in terms of volume), it will undoubtedly be one of the most "complicated" opportunities, as it has all the characteristics that we "like" so much:

• Bank-sourced opportunity 
• Change of use from commercial to residential 
• Horizontal division to obtain 3 new cadastral references. 

 Anyone involved in the sector will know that these are operations that are mostly "tedious". But that is where the value lies.

The operation:

We present an investment project that consists of the transformation of a former ground-floor commercial unit into three independent apartments (which will be published as independent opportunities on our website), each one with its respective cadastral reference. It is an opportunity coming from an investment fund and it will include the change of use, in order to carry out its subsequent horizontal division into three new apartments for residential use.

It is an operation in which we have already been advised by lawyers and architects, and we consider it viable.

The investment decision is based on an analysis of the market and the expectation that, through the comprehensive renovation of the property, we may be able to create an attractive property for investors, without guarantee.

After the renovation, we will transform the commercial premises into 3 independent properties: a 2-bedroom, 2-bathroom apartment, and 2 studio apartments with one bedroom and one bathroom.

These apartments will be rented as whole units and not by the room, although with short-stay contracts, since the final objective is the sale and we do not want to sell the properties with tenants.

Among the advantages of this project we can highlight:

• Space optimization: The renovation will allow us to redistribute and optimize the space, creating a functional and attractive design that responds to the needs and preferences of current buyers.
• Quality improvement: The comprehensive renovation of the ground floor will include the updating of materials, finishes and systems, raising the quality and comfort standards of the house.
• Potential increase in value: a renovation may increase the value of a property, which could allow us to offer it at a price attractive to buyers; this is not guaranteed.
• Potentially reduced selling times: A renovated and updated property may sell faster compared to properties that are in their original state.
• Sales price: Market reports in the area indicate that the sales prices of the apartments proposed under the business plans of the opportunities are below the current market price, which could offer potential for appreciation and may help a sale; a sale within any given period cannot be guaranteed.
• Bank-sourced opportunity: The low purchase price, resulting from being a bank-sourced opportunity, represents a significant advantage compared to the high prices of properties on the market, which have experienced a sharp increase in the last year.

Estimated IRR of around 11% for each of the 3 opportunities; this is an estimate and is not guaranteed.

This project has emerged as an opportunity because of its purchase price, which we estimate is below that of comparable properties. 

We believe this ground floor could be transformed into 3 independent apartments; the outcome depends on permits, works and the market, and is not guaranteed. With this initiative, we reaffirm our commitment to seeking to generate value for our investors; returns are not guaranteed.

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

We are also pleased to share that we will publish a new investment opportunity related to this building. We have made a lot of progress on the renovation, and we have already made the furniture and appliance purchases needed to offer our residents a cozy and pleasant space.

We are excited to move forward and are currently conducting interviews with potential tenants. You will be able to consult the opportunity's fact sheet when it is published, with its complete information and its risks.

We hope it will be an interesting experience, and we cannot wait to see everything we can achieve together. We sincerely appreciate your support and look forward to seeing you soon!

Investing involves a risk of total or partial loss of the invested capital.

This is a project in which Brickstarter expects to add value to the property, which we hope will allow us to sell the property in the future, with no guarantee of the price or the timing.

This is a complex operation in which we will seek to add value to the property through 4 actions:

1. Bulk purchase.
2. Change of use of certain floors to residential.
3. Horizontal division in order to obtain 6 independent cadastral references.
4. Operating it under a coliving arrangement to seek to improve its return, and thus be able to sell it as a going concern with a track record.

Description of the property and of the different actions:

1. Property: This is a building with a ground floor plus 5 upper floors located at Calle Zorita number 20 in Castellón. It is in one of the areas with the highest demand for rooms for rent because of its proximity to the University of Castellón.
2. Purchase price: We will acquire it at an average price of €652 per square meter. Since the property has different uses, we have assigned a purchase price to each of the units, taking into account its use and its current state of repair, thus obtaining an average price per square meter. According to our allocation and estimate, the purchase price of the entire property is 44% lower than the market price. This could make a sale in the short term easier, without the result or the timing being guaranteed, if the sale price is competitive.
3. Change of use of the attic and the ground floor to housing in order to obtain 2 additional apartments. This change of use has already been studied with our architect, who has already made the relevant inquiries to the city council. This operation could add value to the property, subject to obtaining licenses.
4. Horizontal division: renovating it and carrying out the project with the aim of creating the 6 independent cadastral references, so that we can sell all the properties as a block or separately. Another action that could add value to the operation.
5. We are going to enhance its value by putting it into operation to earn a return under a coliving arrangement. It is worth noting the location of the property, close to the UJI university in Castellón, El Corte Inglés, the train station and Parque Rivalta. According to our analysis, there is demand for this type of property in the area, without this guaranteeing its occupancy.
6. Selling it to an end buy-and-hold investor, on a turnkey basis.

Current situation of the property.

Currently the whole building is a single cadastral reference, made up of 6 floors with different assigned uses:

1. The ground floor housed a former shop (a butcher's). However, according to the cadastre, its designated use is Parking. We will change its use to housing. It is currently an open, undivided space. It has 89 square meters according to the cadastre.
2. The first floor has been completely renovated. It is an apartment that is ready to move into. However, we will modify it by adding a room, leaving the kitchen-dining room as the only common area. 83 square meters according to the cadastre.
3. The second floor is practically renovated (it is missing the kitchen). With a layout similar to that of the first floor, we will likewise adapt it to obtain an extra room. 83 square meters according to the cadastre.
4. The third floor is a completely open, undivided space, so a full renovation of the apartment is required. 83 square meters according to the cadastre.
5. The fourth floor is likewise a completely open, undivided space. 83 square meters according to the cadastre.
6. The fifth floor is an open space with 2 large terraces. It is the attic space under the roof, which we will modify to obtain a new cadastral reference. It currently cannot be used as housing. 37 square meters according to the cadastre.

In this way, we are acquiring a building with 6 possible properties for €300,000. Taking into account the price per square meter of new construction in Castellón, €1,591/m2, these 2 homes alone would be worth €264,106, so the implied cost of the other 4 homes would be €35,894, according to our estimate, which does not guarantee their sale value.

Participation through Brickstarter.

Because we are acquiring 6 properties with different characteristics (in terms of condition and the work to be carried out), we have decided to publish 6 separate opportunities instead of publishing a single opportunity.

It should be borne in mind that, after all the work, we will still have properties with different characteristics, since, for example, there will be properties that we can put into operation before others, and some will require more intervention than others.

In this way we have assigned a valuation according to the characteristics and condition of each property, so that the estimated returns could also vary slightly.

This will allow us greater flexibility when publishing the opportunities and more efficient management of resources, and you, as investors, will be able to decide whether to invest more or less as the project develops. This flexibility does not eliminate the risk of loss.

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

This feature will allow us to invest automatically in both the secondary and the primary market, which means that we will be able to set our preferences and have the orders executed whenever there is an opportunity that meets them.  

If you set up autoinvest in the past, log back in to make sure it is still active, since, because it is a product under development, we have had to reset some old orders.

It is currently in beta mode, so only one order per investor can be set up. 

1. WHY USE AUTOINVEST?

First of all, it is important to point out that autoinvest is a tool that is not activated by default. It is a new additional service that we make available to those investors who wish to use it. Each investor will have to activate it and configure it according to their preferences. If you do not activate it, you will keep investing as usual.

Autoinvest is a tool that allows you to automate the investment of available funds, without this guaranteeing any return.

This can be useful in different circumstances, such as, automatically reinvesting the interest we receive from our investments, or investing automatically in new opportunities without having to keep track of the publication date.

As you know, the funds available in the wallet, whether new funds or interest collected, do not produce any kind of return. However, from now on, once autoinvest is set up, these funds can be invested automatically whenever an investment is available that matches the selected preferences, making it possible to reinvest those funds; the result is not guaranteed.

In this way, the income received and, where applicable, any capital gains obtained will be reinvested automatically.

We can also use autoinvest to build our own real estate investment portfolio, investing new funds on a regular basis. To do so, we must set up automatic periodic transfers from our bank to our Brickstarter account, so that autoinvest automatically invests these new funds in the available opportunities, according to our preferences.

This way, we will not need to keep watching the platform, the notifications or the emails, and we will be able to build our real estate portfolio more conveniently.

Autoinvest lets your orders be launched when an opportunity that meets your criteria is published.

2. HOW IT WORKS:

Autoinvest is a flexible feature.

Its configuration lets us set our investment preferences very specifically, according to each person's needs.

It is deactivated by default. Below, we will explain how to activate it and configure it in the best possible way.

1. Open the drop-down menu that appears under your name and click on any button (except the “log out” one). You will then be redirected to the dashboard, where new options will appear.  

2. You will need to find the “market” section and click on “Autoinvest”.

3. Once inside the “autoinvest” section, we will have different options for configuring our orders. First, we will have to choose the total amount to invest, which refers to the total amount of money I want to invest.
4. The minimum and maximum investment refers to the investment limits we set for each opportunity; that is, we can decide that, out of the total amount to invest, €10,050, no more than €2,000 is invested in the same opportunity, so that it can be spread across at least 6 different opportunities, subject to availability and to their meeting the selected criteria.

5. City: investment will only be made in opportunities published in the selected city. If you have a preference for a particular city you can select it; new cities in which we publish opportunities will be added in the future. You can also choose to invest in all opportunities, so that autoinvest is executed regardless of the location of the property.

6. Period: how long I want this order to remain active; that is, the deadline by which my total investment is to be completed. There is complete freedom to set this deadline, so you can set it freely and change it or cancel the order whenever you want.

7. Type of property: we can decide whether we want to invest in tourist apartments or in ones designed for “coliving”. New investment categories will be added in the future.
   

8. Here we can set the minimum IRR of our investments. If the action is executed in the primary market, the IRR estimated by us for the project will be taken into account. If the action is executed in the secondary market, the calculation is a bit more complicated since it will also take into account the published sale price, which may be cheaper or more expensive than the nominal price, which increases or reduces the IRR respectively. 
   


9. The promoter of the property will always be Brickstarter, so in this tab we can select any option. Lastly, regarding status, it is important to tick the “active” box so that the investment can be made.
   

At Brickstarter we continue working to offer new features to our investors. Autoinvest is currently in beta mode and we are already working on future improvements. If you have any questions about how it works, please do not hesitate to contact us; we would love to hear your opinion. contacto@brickstarter.com

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

As you know, due to the pandemic and the drop in tourism, we have been forced to adapt by (occasionally) placing many of our properties on a mid-term basis. We did this with the aim of not leaving our properties empty and thus maximizing the monthly result of each property, which is distributed among the investors when there is one.

Until now, it has always been a temporary solution, imposed by the limitations resulting from the pandemic.

Experience has allowed us to see that this arrangement, if well managed, could offset lower income with lower management expenses and a lower acquisition cost, without any guarantee.

At Brickstarter, we want to take advantage of this new market opportunity by launching new opportunities focused on the guest who is looking for a mid-term stay, and who has different needs from the short-stay guest (and will therefore require a different type of product).

This new type of mid-term property will be characterized by:

• lower management expenses, which must offset the drop in income. Tourist apartments have more income, but also higher management expenses, because of the need to pay for cleaning, check-ins, maintenance, portal commissions, etc…. This drop in income could be partly offset by lower management costs (in our estimates, from 25% to 10% of income), without any guarantee.
• Lower price per square meter. In recent years, vacation properties are the ones whose prices have risen the most. This new type of property, not as central, could allow us to acquire the apartments at a relatively lower price, which could improve the estimated return.
• Lower seasonality. Income that may be more stable throughout the year, without any guarantee.
• Lower exposure to the tourist license, as it is not needed, which broadens the supply of available apartments, although regulatory risk remains.
• Estimated demand for the finished product from buy-and-hold investors, with simpler management than vacation rental.
• Product less exposed to how the pandemic evolves.

The objective, as always, will be to seek stable monthly income, which is not guaranteed, by developing a real estate product that is attractive to the end investor.

Obviously this is a new type of project, different from those published so far. With different characteristics, but with the Brickstarter essence; that is,

• Properties selected according to our analysis criteria.
• Properties with no registered encumbrances at the time of purchase (detailed in each opportunity).
• Developed solely by Brickstarter.
• The investor may obtain results from the rental and from the possible future capital gain, without any guarantee.
• Brickstarter's fees depend on the type of property and may vary for each opportunity; they are detailed in the fact sheet.

This new type of property will alternate with, and complement, the publication of new vacation rental opportunities, and could also allow us to diversify geographically by expanding our investment area.

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

The properties we have sold are:

1. Carmen Coronada
2. La Caleta
3. Ático Tavira
4. Bella Escondida
5. Cristóbal Colón
6. Santiago Terry
7. Buenos Aires
8. María Arteaga

This is good news for Brickstarter:

1. The sales illustrate our business model: Brickstarter develops real estate assets for their final sale to investors.
2. As of this date, more than half of the published properties have been sold; the result of each one is detailed on its property page. Greater asset turnover can improve the IRR, without any guarantee, and mean higher income for the platform.
3. Brickstarter will continue to manage the properties that have been sold and will keep strengthening its apartment management business unit.

The result and the settlement of each transaction are reported to investors in their private area.

We will publish new opportunities when they meet our criteria.

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

From now on, we are going to have fewer bookings and, therefore, we must start thinking about new strategies to adapt the operation of our properties.

That is why we have decided to begin marketing our apartments as mid-term rentals over the coming months. (Mid-term rentals are aimed at guests who want to book stays of 30 days or more, but always less than 1 year).

Guests who book mid-term are usually not travelers, so we must adapt all of our strategies in order to offer them the property they need.
Over these last months we have been adapting the apartments to this new strategy, and we are now very happy to announce that (starting in October) we have begun renting our properties in Sevilla following this strategy of month-by-month rentals.

This new strategy means that we will have less income, but also lower costs, so we hope to improve the result, without any guarantee.

With this new model we expect less income but also lower expenses, since running a vacation rental property is expensive: household utilities, cleaning costs and management fees tend to be quite high, and they are always at the owner's expense.

With mid-term rentals, owners do not have to pay all of these expenses, so in a COVID scenario with fewer bookings, it can be more profitable than short-term bookings.

The plan is to rent them again as vacation rental properties when short-term rentals become more profitable again than mid-term rentals, without any guarantee.

Impact on overall performance.

For the time being, we want to market our properties as mid-term rentals only during the low season, and we will list them again as vacation rental properties in the next high season (June-September). 

Therefore, we estimate that the final impact on the overall performance of our properties would be low, around 1% to 1.5%, without any guarantee.

As we can see in the chart below, taking Carmen Coronada's 2019 data as a reference, the estimated difference in profits between short-term and mid-term rentals would be €850 per year for that property, assuming that we rent the properties as vacation rentals during June, July, August and September, and as mid-term rentals during the rest of the year (from October to May). 

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

With the high season over, and the experience gained over recent months, we now have enough experience to begin making decisions, or at least to start clarifying our thinking.

These are based not only on our numbers, but also on what we have observed together with other professionals in the vacation rental business. These are our main conclusions:

1. Our average income in Cádiz has experienced an average drop of 5% compared with 2019 (historical data; it does not guarantee future results). Due to the pandemic, most new bookings are made at the last minute, which makes it very difficult to make decisions. However, we expect September to be a good month in Cádiz, without any guarantee, since it remains an attractive destination for domestic tourists. We will be on the lookout for new investment opportunities, now that the market appears to be correcting.

2.     In Alicante, unfortunately, we had to lower our rates in order to maximize occupancy (and income), and that had a negative impact on the final result. We are receiving bookings for the last quarter of the year and we are feeling positive about 2021. If we find a good opportunity, we should probably also take advantage of it, especially given the downward pressure on prices in the real estate market.

3. The performance of Málaga and Sevilla has been below forecast. Unfortunately, we are not receiving many bookings for the coming months, and this is why we are considering accepting mid-term rentals (less than a year), with the aim of giving more stability to income until the market in these cities recovers. We will continue scanning the city, but we will probably not invest in these cities over the coming months.

New investment categories.

To diversify, which does not eliminate the risk of loss, we are studying the inclusion of other investments in addition to vacation rental properties. That is why we are also working on new investment categories.

We are working to add new investment categories, with no confirmed date. Among them, coliving spaces, remodeling projects and even projects with developers. 

Obviously, whether we publish them will depend on their meeting our standards of return and risk.

We will keep you informed.

Investment opportunities in vacation rentals:

The real estate market is falling due to the pandemic. We expect tourism to recover, although this is not guaranteed, and we have already observed that travelers increasingly opt for vacation apartments to avoid crowds. Now that there is downward pressure on prices, it is time to analyze the market and look for opportunities that meet our criteria.

Our goal now is to look for new opportunities in Cádiz and Alicante, while we work on new types of opportunities.

We will look for well-located opportunities whose purchase price is below their market valuation, which does not guarantee any result.

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

Although we always have some interesting opportunities within reach, sometimes we prefer to wait for a better one, an opportunity that meets our criteria.

This is why, at a given moment, there may be no open investment opportunity published.

It would be very easy for us to publish one of the (literally) thousands of opportunities out there. But that is not our philosophy.

Brickstarter develops and manages its opportunities until they are sold. We are responsible for the process.

That is why we only publish opportunities that meet our analysis criteria.

In a way, we believe that not having an open opportunity is the lesser evil, and that it helps us remember our principles. Investment decisions should be made calmly and without rushing. It is better to have no opportunity published than to have one published that does not meet our criteria.

If it is not good for you, it is not good for Brickstarter. And we would rather not invest than invest in an opportunity that does not meet our criteria.

In this regard, you can subscribe to our newsletter to keep up with the news.

Investing involves a risk of total or partial loss of the invested capital.

It is finally finished, and we can show it to you!

Yes, we are talking about the “Ático Puerta Santa María” opportunity, which has cost us so much sweat because we wanted it to turn out well.

In the end we have grown very fond of it, since the whole Brickstarter team has been fully involved to make sure everything went well.

It is one of the projects that has taken us the most work, since we carried out a complete renovation of the apartment. And as you all know, no renovation is easy.

First, we carried out the main tasks before diving fully into the renovation:

• Changes in the ownership of the utilities.
• Registration of the tourist license.
• Setting up the internet connection.
• Emptying the entire home of the old furniture.
• Deciding what we need to renovate so that the apartment looks new.
• Requesting quotes from different contractors.
• Applying for a building permit at Cádiz City Hall.

Once we had all of the above, we selected the right contractor (best value for money) and got down to work:

• Design of the renovation.
• Choice of the materials and colors we wanted for the tiles, flooring, kitchen furniture, hardwood floors, paint, etc.

As for the design of the renovation, the restructuring of the bathroom took us the most work, so that it would be more spacious and functional. Therefore, we decided to build a larger shower, so that guests can enjoy a relaxing shower. We moved the washbasin and placed it where the bidet is, and this way we gain more space.

On the other hand, there was the choice of materials and colors. We decided to create a pleasant, neutral environment with a palette of gray colors and whites that would contrast with the decoration in black details.  

Once the work had started, at the same time we were coming up with all kinds of ideas for the decoration. So we began the following tasks, so that once the renovation was finished, everything would already be ready.

• We looked for the large kitchen appliances.
• We designed the layout of the space for the furniture.
• We acquired the appropriate decoration and furniture. We bought everything needed so that tourists can have a good stay (kitchen utensils, towels, sheets, duvets, blankets, comforters, toaster, juicer, coffee maker, hair dryer, iron, etc.). 

As we said, we wanted to play with shades of gray, but with contrast, which is why we selected furniture in gray, white and black tones. What we intended was for the apartment to gain spaciousness and brightness and at the same time be cozy, without losing functionality.

We used the black contrasts in the lighting, shelving and decoration. In addition, we placed various plants to add warmth to the atmosphere.

Finally, all of this stopped being a shopping list and became reality. The work was completed and we sent everything to the apartment. There, our team took care of assembling everything and adding the finishing touches.

The last tasks we carried out were:

• Taking attractive photographs that capture the essence of the home.
• Creating profiles on the various vacation rental platforms and managing them to obtain bookings. 
• Market study to set the prices for the stay. 

And finally! After all this work, our first guests arrived on July 30. A lovely young couple who were amazed by the apartment, and we were as happy as could be to see that our work had been worth it.

We hope our investors and all the #brickstarteros like it too. Soon we will have new opportunities and more news. 

Cádiz has started the year at all-time highs. In the first quarter, the number of travelers and overnight stays has increased by more than 20% compared with 2018.

These figures show the growth of tourism in Cádiz, according to the sources cited. 

Andalusian tourist apartments came close to 209 thousand travelers in February 2019, which represents an increase of 19.7% compared with the same month of the previous year. Domestic travelers show an increase of 27.9%, and international travelers likewise experience a rise of 12.9%.

Chart 1: Junta de Andalucía

Andalusia ranks third in the vacation rental ranking in Spain, capturing 15.1% of overnight stays, and in February it achieved one of the best results among the tourist autonomous communities, above the Spanish average in both the domestic and the foreign market.

Chart 2: Junta de Andalucía

Andalusia currently presents less regulatory uncertainty than the Canary Islands and the Valencian Community, although regulation may change. This is because in these last two communities the regulations on tourist apartments are being drawn up, and it is a rather uncertain situation that provides very little security when investing in this sector. 

Cádiz is one of the cities where we have launched an investment opportunity. 

As you can see in the following charts taken from our Big Data algorithm, in our analysis the estimated gross return of Cádiz is 16.29%, compared with other cities such as Valencia or Málaga, and it is not guaranteed. This is reflected in the average of rental income relative to the purchase price of the properties, where we see that Málaga has slightly higher income, but also a much higher price per square meter (€3,860/m2), so its estimated gross return in our analysis is 9.76%, 6.53 points lower than that of Cádiz; these are estimates without guarantee.

Chart 3: Brickstarter 

For this reason, we have decided to launch a new opportunity in this city. It is a new property carefully selected to meet our criteria of estimated return and seasonality.

In this case it is a penthouse. We are leaning toward apartments with a terrace because it is the type of vacation apartment most in demand among tourists and with the least supply. The terrace adds an additional and exclusive experience to our travelers' much-desired vacations. 

From the terrace of this tourist apartment there are panoramic views of the whole city and privileged views of the Cathedral and the sea (Port of Cádiz).

Cádiz is a very beautiful city, but as always, we want our guests to feel so at home that they do not want to leave our place.

The property is launched for investment at €162,784.

• Estimated gross rental yield: 12.80% 
• Estimated IRR: 9.95%

If you would like to see more information about the opportunity, the financial report, market study, etc., register by clicking here and in the properties section you will find all the details. 

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

The gastronomy, the quality of the accommodations and the extensive list of tourist sights the city offers are the main attractions for travelers from all over the world. 

According to the annual TripAdvisor study, the largest travel review portal, Cádiz is well rated for accommodations, with 4.21 points. 

Chart 1: TripAdvisor

This great reception of the city by tourists causes income in the tourist apartment sector to increase. And we can see it reflected in the following chart, which analyzes the last three years.  As we can see, the figures are very high, especially if we compare the year 2018 with 2016, when there was an increase of €7,923,443. 

It is true that, alongside the increase in demand, new tourist apartments have appeared, but this has not prevented Cádiz from continuing to increase its income, although to a lesser extent. If we compare 2016 with 2017, there was an increase of €5,239,932, compared with the €2,683,511 more obtained in 2018 compared with 2017.  

Chart 2: Brickstarter

In 2018, a total of €11,533,685 in income was collected from tourist apartments, spread across the four seasons of the year. However, as everyone knows, the most income is obtained in the summer season with €5,525,329, which covers the months of July, August and September. 

Chart 3: Brickstarter

But income does not increase equally in all areas of Cádiz, so below we can see it by zip code. The zip code 11002 was the one with the highest income in 2018 from tourist apartments (€1,884,259), followed by 11003 (€1,782,428).

Furthermore, in this case income is related to occupancy, since zip code 11002 has the highest occupancy, at 60.13%.  By contrast, 11003 is not second in occupancy; 11011 is. This happens because the average price per night will be lower than in the other, more central zip codes. So they have higher occupancy but lower income, and what is advisable is to maximize income with a balanced occupancy. 

Chart 4: Brickstarter

For these reasons, Brickstarter has analyzed the tourist apartment sector in Cádiz. The aim is to launch a new opportunity in this city that is so beloved by tourists from all over the world. In this case, it would be the third in this city. 

It is a one-bedroom apartment with capacity for 5 guests.  Its main features are summarized below.

• It is right in the center of Cádiz (Distrito Centro). Surrounded by all kinds of leisure, dining and other services. It is also 100 m from the Torre Tavira, 500 m from the most in-demand beach in Cádiz (La Caleta) and 400 m from the Teatro Falla. 
• In addition, it is located in zip code 11001; if we look closely, it is not one of the zip codes with the highest income and occupancy, but this is not a problem, since it is separated from zip code 11002 by just one street. So this small difference should not change anything for tourists, and we therefore estimate income and occupancy similar to those of zip code 11002, with no guarantee that they will be reached. 
• The type of apartment is the most in demand among travelers who choose Cádiz as a tourist destination. It has 1 spacious bedroom with a bathroom and dressing room, a living-dining room and an eat-in kitchen. But one of the attractions of the apartment is its two terraces. We will prepare them with great care so that our guests have a picture-perfect vacation. It is worth noting that it is very difficult to acquire an apartment with a terrace and it is one of the most sought-after requirements among tourists today. 
• It was built in 2007, so it is a semi-new apartment, which we will adapt into a tourist apartment with good decoration. With this we aim to improve occupancy and income, without the result being guaranteed. The decoration and equipment could add value to the property, since it is not currently operated as a tourist rental. 
• The property is launched for investment at €176,139.05 and has an estimated IRR of 9.14%.

These are the data and features we have taken into account; each investor must assess the risk. Below, you can see more information about our opportunity in Cádiz.

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

And it is not without reason: not only because of its wide variety of tourist attractions, but also because we can see it reflected in its income.

A tourism report by Exceltur ranks Cádiz fourth nationwide in average income per room, ahead of Madrid.

As for tourist apartments, income has increased over the years. As we can see in the chart, income has been rising every year in the city of Cádiz. In the last three years, €23,994,100 has been earned. 

In 2018, €7,923,443 more was earned than in 2016, when only €3,610,242 in income was obtained. Moreover, income is rising not only in the summer season; the figures increase during all seasons. 

In the first quarter of the year, which is usually the one with the lowest income, we see that in 2018 €1,873,483 more was collected than in 2016 and €812,751 more than in 2017. 

Chart 1: Brickstarter

We can also see that the total income of the 3 years was not obtained equally in all the zip codes of the city. The zip code with the highest income is 11002 with €3,998,358, closely followed by zip code 11003 with €3,823,548 in total income, with an average occupancy of 55.21%. 

That ranking takes historical, climatic and cultural values into account. As a result, Cádiz offers a wide range of tourist attractions.

It is famous for its carnival and its spectacular beaches. It has a great artistic, monumental and historical legacy, making it one of the oldest living cities in Europe. It was founded by the Phoenicians and was then followed by the Carthaginians, Romans, Goths, Arabs and Christians.

It competed with Seville to be the port for the goods trade after the discovery of America, and it was there, in 1812, during the War of Independence, that the Cortes Generales proclaimed the first Spanish Constitution, La Pepa.

It therefore has great tourist appeal, which is reflected in its overnight stays: in January it recorded a total of 209,909 in the hotels of Cádiz.

Most of these overnight stays were by domestic travelers (107,402), outnumbering foreign travelers (102,507), according to the Institute of Statistics and Cartography of Andalusia. In addition, the average stay is 2.2 nights. As for the number of travelers, the province of Cádiz recorded a total of 97,399, ranking fourth in Andalusia behind Málaga (249,520 travelers).

In January 2019, most Andalusian provinces show growth rates in both travelers and overnight stays, with Cádiz and Seville standing out, showing double-digit growth in nights stayed.

Chart 2: INE

In short, after analyzing all the information, we agree with the New York Times: Cádiz is trending, and not just because they say so; this is reflected in the figures that have been observed.  We have been able to see it in our opportunity in Cádiz, La Caleta.

For March we have 87% occupancy, and for next month we already have 90% of the occupancy covered (2019 data, no guarantee of future results). There are 182 days booked through the end of 2019.

The market study forecast that it would achieve an average occupancy of 71.25%, and before the end of the first quarter of the year, it already has an average occupancy of 67%. This means reaching 90% of our initial income forecast for the whole of 2019 (historical data; it does not guarantee future results). 

For all these reasons, we consider that Cádiz is a destination with growing tourist demand. 

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

This makes it a good location both for tourists and for companies in this sector, since there is not much seasonality. As a result, it is the leading force in the Andalusian tourism industry. 

The highest income is concentrated in the "Distrito Centro". As the charts from 2014 to 2017 show, the number of tourist apartments has grown in step with income. At first, the zip codes with the highest income were the most central ones (29008, 29012 and 29005), and over the years they have spread to other zip codes in the center of Málaga, reaching the La Malagueta area, which is further from the historic center. 

But what stands out most is that zip code 29008 is the one with the highest income in every year, above all the others. 

With figures this high, more and more vacation rentals are appearing, and so far this does not seem to have been a problem, since, as the chart shows, income has increased from one year to the next. For example, in zip code 29008, €3,653,244 was earned in 2016, and in 2017 the same zip code brought in €7,647,917, that is, €3,994,673 more. 

This suggests that every year more tourists are interested in getting to know Málaga, and that there is a need to meet this occupancy demand. 

 Chart 1: Brickstarter

For these reasons, Brickstarter has analyzed the tourist apartment sector in Málaga. The aim is to launch a new opportunity in this city that is so beloved by tourists from all over the world. 

Not long ago, we made the leap to Andalusia with our first investments in Cádiz, but we had wanted to enter the tourist housing sector in Málaga for some time. After many studies and analyses with our Big Data tool, we have arrived in Málaga with a new investment opportunity.

It is a new one-bedroom apartment in the very center of Málaga. It is located in a building with more tourist apartments, which may add value to the apartment. Its main features are summarized below. 

• It is right in the center of Málaga (Distrito Centro). It is close to the cathedral, museums, the castle, the port, etc. It is surrounded by all kinds of leisure, dining and other services. It is also 500 m from La Malagueta beach, one of the best-known beaches on the Costa del Sol. 
• In addition, besides being in the Distrito Centro, where the highest lodging income is found, it is also located in the zip code with the highest tourist occupancy (29008). 
• It has one bedroom, but the apartment is larger than the average tourist apartment in Málaga that has one bedroom or is a studio. It is also the type most in demand among tourists. 
• It is located in a building of tourist apartments, which, according to our analysis, fits the current regulations, which may change in the future. It also makes it possible to offer guests a better service. 
• It is brand new; nobody has ever lived in it. In addition, a new kitchen will be installed for us. 
• Current housing prices in Málaga are very high, but we have managed to acquire the apartment below market value, since, according to a third-party valuation, it is valued at €162,000. 
• We will furnish it ourselves and finish some construction details, with the aim of improving its return, without guarantee. This could contribute to increasing the value of the apartment at the time of sale, without guarantee.

These are the data and features we have taken into account; each investor must assess the risk. Below, you can see more information about our Málaga opportunity.

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

However, it is necessary to take into account certain elements that will help you assess the right place for your real estate investment.

The first thing you should keep in mind is to choose a good area with stable tourist demand. To that end, the location of the home is an essential factor; try to make sure it is in an area with little seasonality and with all services (shops, green areas, public transport, monuments, parking, etc.).

Next you should take into account the characteristics of the home, that is, aspects such as the number of bedrooms, whether the property has an elevator and a garage, as well as the age of the home, its condition, and whether it is located in a residential area with a pool, green areas, etc.

Investing in tourist apartments that have a pool and green areas can be a reason for the guest to pay more for their stay, because this provides added value. But you must keep in mind that such apartments also have higher homeowners’ association fees, so you must be careful to set the rental price correctly so that it does not harm the desired return.

In addition, if you invest in an older apartment, you must take into account the renovation costs and how adaptable it is for obtaining the tourist license. We recommend that you read the regulations of each autonomous community before buying the apartment. One option is to look for homes that are already in tourist operation with the license in order. 

Stay up to date on the regulations in force for making changes to your apartment; the LOE (building planning law) contained in Law 38/1999 of November 5 will let you distinguish which works require an architect and which only require a technical architect

Make sure that the area where the home is located has access to electricity and gas supplies.

Last but not least, put yourself in the place of the tourists who will want to rent your apartment; this will let you know what they would like to find in a tourist apartment and what amenities to provide.  Generally, people look for a home in good condition, with a modern style, with furniture and soft colors, well equipped, clean and located in a central area. This can help your investment perform better, with no guarantee.

If you prefer not to manage the property yourself, on our real estate investment platform, Brickstarter takes care of operational management: searching for the apartment, attracting guests and maintenance. That way you take part in a real estate investment managed by professionals. Every investment involves risk and must be suited to your situation. 

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

Therefore, given such tourist demand, each year more tourist apartments appear, intended for vacation rental.

From 2011 to 2017, we can see in chart 1 a clear increase in tourist properties. Above all, 2016 was the year in which the most apartments were listed, thus becoming the year of greatest growth, with 2,944 more properties than in 2015. A total of 4,421 new tourist homes in operation in 2016.  

But in the latest year, 2017, this situation has stabilized, slowing the creation of new apartments, with only 1,759 more homes than the previous year, making a total of 6,108 new properties in 2017.  

This last year we can see more notably the increase in tourist apartments in the most central area of Alicante and in Cabo de las Huertas, as you can see on the map, with apartments that earn average annual income of between €18,000 and €38,000. Following this area is the north of the province of Alicante, especially in municipalities such as Denia and Javea, where there are apartments that reach average income of €91,000 per year.

On the other hand, we detect that over the years there is a clear trend that repeats: the second quarter of the year is the one preferred by these managers to publish new tourist apartments, followed by the third quarter. In 2017, in the second quarter alone, 1,995 new properties were created, 33% of the properties created that same year. 

Chart 1: Brickstarter

This large increase in tourist apartments could be alarming, but it puts reality into considerable perspective, since not all of these new listings remain active for long. That is why we see in chart 2 that in 2016 only 1,757 homes remained active out of the 4,421 that were newly created that same year. This is because managing tourist apartments is not that easy; behind all that money there is a great deal of work and effort by many professionals, as is the case of Brickstarter, a company that manages the tourist apartments launched on its real estate investment platform, where anyone can invest from €50 in this sector. 

Chart 2: Brickstarter

Therefore, next, we focus on looking more deeply at the apartments that show activity over time and we look at their proliferation through three variables: the total number of apartments that are active, their average occupancy and their income.

As we have already mentioned, the number of properties has been increasing in recent years, reaching a total of 12,565 active homes as of January 2018 in the province of Alicante. But as the number of apartments rises, their occupancy and income also rise, even though new tourist apartments are appearing.

This is because, at the same time, tourist demand is also increasing, with growth in tourism in Alicante that needs to be met. We can see this reflected in chart 3, where occupancy in the third quarter of 2016 was 27.38% compared with 39.32% in 2017. We are facing an increase of almost 12 percentage points (from 27.38% to 39.32%). In addition, we can see that income also rises from one year to the next, with average monthly income in the third quarter of 2017 of €2,059 compared with €1,410 in 2016. Therefore, in this sample, the appearance of new apartments has not, so far, reduced occupancy or average income. As we can see in chart 3, the comparison of 2016 with 2017 shows a rising proliferation in the three variables analyzed. 

Chart 3: Brickstarter

In short, although the figures may be alarming when we see the increase in tourist apartments in Alicante, and there is economic and social unease on the part of the hotel sector and institutions, it should be said that the number of homes is rising in step with the increase in tourism in Alicante, covering the occupancy demand that the rest of the accommodation cannot satisfy. 

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

At Brickstarter this topic intrigued us, so we set out to investigate using our Big Data tool and our own algorithms. Now we want to share with all of you the conclusions drawn, based on the Airbnb database for the city of Valencia. (Chart 1)

Chart 1: Brickstarter 

To do so, we will analyze four variables: the type of accommodation, the listing creation date, the delisting date and actual active listings. Once analyzed, we will move on to drawing conclusions.

As we know, there are 3 types of listings: entire apartments, private rooms and shared rooms.

The type of accommodation with the largest number of listings from 2011 to 2017 is the entire apartment, with 7,172 current listings, that is, 70% of the listings on the platform, followed by private rooms with 2,733 rooms and, lastly, shared rooms with only 36 listings.

Regarding the creation of new listings per year, the chart shows that since 2011 more listings have been created each year, reaching 4,988 new listings of entire apartments in 2017. These are very favorable figures, but they show a slowdown: if we compare them with those of 2016, we see that the pace of growth has fallen and is no longer as high as in previous years (as we anticipated at the end of last year). 

However, what is really relevant is the number of delistings, since there is strong growth in the number of apartments leaving the platform.

We can highlight that in 2016 a large number of entire apartments (1,632) and private rooms (1,400) were delisted, figures that correspond to a proportion of 42% and 59%, respectively, of the new listings of that same year (3,879 and 2,374).

Finally, we studied the number of active listings, that is, those listings with continuous activity where bookings are recorded and the calendar is kept up to date. 

As we can see, despite the high number of apartment listings currently advertised through Airbnb (7,172), only 3,445 remain as active profiles, that is, 48% of the total, so there are many users who create a profile on Airbnb and over time stop managing the accommodation, but without delisting it from the platform. They simply leave the listing online, without updating it and without receiving bookings.

As we can see, the high number of listings that are delisted from the platform, or simply stop being actively managed, is striking. Although the reasons are very varied, according to our experience we can summarize them as follows:

• Managing a vacation rental is complicated:

Managing a tourist apartment is not an easy task; it takes a lot of time and work. In addition to posting on the platform, you have to manage bookings, answer guests’ questions, welcome them, prepare the apartment, carry out maintenance and cleaning tasks, solve guests’ problems during their stay, etc. Tasks that in the end require a lot of dedication.

• The profits obtained are not what was expected:

Given the time invested in managing the apartment, we would expect very satisfactory financial compensation, but in most cases this is not so. Airbnb tends to recommend derisory rates, and a great many variables that people often ignore out of unfamiliarity affect income generation. All this means that many properties have little activity and little income.

• Not everything goes:

There are many types of tourist apartments, and not all of them are up to the task. Neither the properties nor the practices. People often trust that any property managed in any way will work as a tourist apartment, and we already know that this is not the case. Users are demanding and, faced with the increase in supply, they select the best properties to stay in.

In short, we see that the number of listings delisted from Airbnb is quite high, and that very few profiles carry out real activity. This is due to the disenchantment suffered by many new managers who expected higher income and less effort. The management of accommodation is not an easy task, and without professional dedication, the profits obtained do not make up for the work done, which can result in an activity of low profitability.

At Brickstarter, we analyze the current market, as well as its evolution and future outlook. We also use our own tools to analyze and manage income. Brickstarter takes care of the operational management of the apartments; you decide which ones to take part in and with what amount, assuming the risk inherent in any investment.

If you would like to know more about Brickstarter, you can contact us by email:  contacto@brickstarter.com

Or if what you want is to invest, you can register on our website and we will let you know when the next opportunities are launched.

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

The Explanada de España

The Explanada de España is the main seafront promenade of Alicante, an ideal place for a leisurely stroll over its famous mosaic and among its tall palm trees while you look out over the sea. It is also usually very busy and lively, since there are numerous shops, restaurants, etc. around it.

Moreover, if we continue along the promenade, we can reach Alicante’s various beaches or the marina, where we can have a drink on a sailboat or at the pubs nearby.

Postiguet Beach

This beach is the most central one, since it is located in the heart of the city. It is very accessible, has all the necessary facilities, and holds the Blue Flag beach quality distinction. It is a sandy beach that invites you to lie down, sunbathe and relax in the crystal-clear waters of the Mediterranean Sea.

Santa Bárbara Castle

The most representative monument of Alicante is Santa Bárbara Castle. It is located at one of the highest points of the Alicante coast, so we can enjoy the best views of the city and the sea.

This castle dates from the late ninth century, during Muslim rule. After several renovations, the castle was abandoned until 1960, when it was rescued and opened to the public, and today it is one of the most visited places in Alicante.

Basilica of Santa María of Alicante

The Church of Santa María is the oldest religious building in the city, dating from the fourteenth century. It was built on the remains of Alicante’s main Islamic mosque.

In addition, closer to our opportunity, there is another religious building worth visiting. It is the Co-Cathedral of San Nicolás, which stands out for its Herrerian Renaissance style with a beautiful cloister.

Alicante City Hall

The building that houses the City Hall is worth visiting, since it has spectacular halls. Even before going in, we can admire its façade and entrance with striking sculptures, where the so-called “Cota Cero” is located, the reference point from which the altitude above sea level of the different Spanish cities is measured.

All of these wonderful places are very close to the tourist apartment that we launched last week. As you can see, the location is central.

We put a great deal of effort into the search for our apartments, because we seek guest satisfaction in order to improve occupancy. That is why we select properties with our Big Data algorithms, which carry out a thorough search with results in line with our criteria.

If you want to invest in the next opportunity, subscribe to our newsletter (at the bottom of the page) and we will notify you personally when another tourist apartment becomes available. 

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

At first these were individual managers renting out their own homes, but little by little this emerging niche grew, and companies began to appear, taking care of the professional management of several properties.

Being such a controversial topic, critical voices soon arose, calling for a new regulatory framework. Among other things, it is argued that this type of rental does not pay taxes, and that behind this model of a false “sharing economy” there are large business groups engaging in unfair competition against the hotel sector. In short: that this activity had little of a “sharing economy” about it.

But is that really the case? 

1. Only large companies profit:

In the following chart (chart 1) we can see, with data as of December 2017, that in the city of Valencia, 70.98% of apartment managers manage a single property and only 5% manage 5 or more properties.

If we consider a “professional” manager to be one who manages 4 or more properties, we can say that fewer than 8% of managers could be considered professional managers. (Managing fewer properties does not, in general, guarantee enough income to cover the costs of maintaining a business structure.)

We can therefore conclude that, although there are large business groups dedicated to managing tourist apartments, it is the small individual managers who manage one or two homes who manage the larger number of tourist apartments. 

Chart 1: Brickstarter

Therefore, we see that, in the case of Airbnb, we can indeed speak of a “real” sharing economy, since the vast majority of managers are individuals who manage a single property, thereby obtaining supplementary income. As for the effect on hotel occupancy rates, we can also see that hotel occupancy rates are likewise between 90 and 100% in the main tourist cities, so it does not seem that, in that sense, tourist apartments are engaging in unfair competition against hotels.

2. Who are the main management companies operating in Valencia?

While it is true that, as we saw earlier, the vast majority of managers are individuals who manage one or two listings, it is also true that there are companies that manage a large number of listings. Let’s see who they are.

In the following chart (chart 2) we can see the main managers in Valencia and the number of properties they manage. The ranking is led by several management companies with more than 100 homes each.  

Next, we find other managers with a large number of properties (which leads us to think that there are companies behind these profiles, since a single person cannot manage that many properties on an individual level.)

Chart 2: Brickstarter

 3. They do not pay the relevant taxes:

In order to ensure that income from vacation accommodation rentals is declared, the Spanish tax authority (Hacienda Pública) has introduced Form 179 this year, under which the portals that advertise vacation properties are required to report the income they pay out to the various owners.

In this way, if the data reported by the platforms do not match those submitted in each customer’s individual tax return, managers may be subject to inspection by the tax authorities.

Although this measure has been slow in coming, it seems unlikely that, from now on, income from rentals through these platforms can go undeclared.

Who benefits from Valencia’s new regulatory framework?

Under the new regulatory framework, and broadly speaking, only apartments located on the first floors, or apartments in buildings that are entirely vacation-oriented, may be used for vacation rental.

In this way, through these measures, the small individual managers end up being the most harmed, while large companies, with the capacity to develop buildings, and the hotel chains are the main beneficiaries of this regulatory change.

The new rules thus harm the interests of individual managers who only seek to obtain additional income through their own legal work.

Managing tourist rentals on your own is becoming increasingly complicated, due to legal and market uncertainty and all the work involved in managing well.

By investing with Brickstarter, you do not have to deal with those procedures, which we handle.

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

At Brickstarter, a real estate investment platform specializing in tourist apartments, we have begun to broaden our horizons in our search for opportunities. And we have left our established area (Valencia) to venture into researching other cities.

The next city where we have positioned ourselves is Alicante, where we have secured a tourist apartment with an estimated net rental yield of 5.5% and an estimated IRR above 9%.

The opportunity has been launched at a final price of €154,466.

Now, the next step is for Brickstarter to take over its tourist operation. We are talking about a semi-new property with capacity for 4 guests, located right in the center of Alicante, which already holds the tourist license. Occupancy in line with that of the local market is estimated, although this is not guaranteed.

After a vacation rental period and, where applicable, the distribution of the results obtained from the tourist operation among all investors, Brickstarter plans to sell the property at an estimated exit price of around €180,000, with neither the sale nor its price being guaranteed.

We continue working with our method, based on the analysis of our own algorithm and Big Data technology, to find new opportunities in different territories. And thus be able to meet the needs of investors.

To invest, you need to register on the platform; the minimum investment is €50.

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

As you will see, we are broadening our horizons and researching new markets, and that is why we have found an opportunity in Alicante. It is a province that we have been studying for several months, as we had detected tourist demand. And in which we hoped to find an opportunity that met our quality standards.

After a period of study using our Big Data technology with our own algorithms and working method, we have managed to find this new opportunity, which presents estimated return ratios in line with our criteria.

It is meticulous work, because we only look for properties with an estimated net rental yield close to 5%, that meet all legal requirements, and with potential for appreciation, with no guarantee. But let's analyze the specific opportunity.

1. STUDY OF THE AREA

First, we begin with the study of the area, and we found that zip code 03002 was the one with the highest income, with an average occupancy rate of almost 56%, compared to the rest of the zip codes, as you can see in chart 1. It is a very positive rate, since it is a central location, where we can find representative monuments of Alicante, in addition to being surrounded by restaurants, pharmacies, shops, etc. And of course, it is an area very close to the Mediterranean Sea, and to the leisure and recreation area of the port of Alicante. 

 Chart 1: Brickstarter

In addition, it is the area with the lowest seasonality according to the data analyzed. As we can see in chart 2, this statement is supported by the evolution of the blue-colored graph, which stands out for its average occupancy rate above that of the rest of the zip codes. 

Chart 2: Brickstarter

2. STUDY OF THE PROPERTY TYPE

Second, once the ideal area was identified, we moved on to analyze the type of property best suited to obtain a good rental yield. To do this, we took chart 3 as a reference, where we can see the number of properties in zip code 03002 and their type.

Unlike in Valencia, we see that in Alicante, tourist homes with 2 and 3 bedrooms stand out. This makes them a type of apartment that is heavily used for tourism, with 1,246 properties with 2 bedrooms and 1,083 with 3 bedrooms. With all this, we can see that 1-bedroom properties have greater future potential, with 710 currently in operation, but with an occupancy rate showing a strong upward trend. 

Chart 3: Brickstarter

This future projection can be seen better reflected in chart 4, where we observe that the occupancy rate of 1-bedroom homes has increased in the last year, 2017, compared to the months of previous years. 

Chart 4: Brickstarter

With all this data provided by our own algorithm and a meticulous market study, which we have summarized above, we identified the opportunity on Calle Mayor, Alicante. It thus becomes an investment opportunity that meets our criteria, for the reasons we set out below, without this guaranteeing any result.

3. CHARACTERISTICS OF THE OPPORTUNITY

• First, it is a property that is already in operation as a tourist apartment, with estimated annual revenue of €18,000, not guaranteed, in line with our forecasts for that type of property.
• It is a small home, with one bedroom and one bathroom, with capacity for 4 guests.  Contrary to what happens in Valencia city, it is the type of property with the greatest potential, since large apartments predominate in Alicante. The apartment is very bright, with two spacious balconies that overlook Calle Mayor itself, and has an elevator and air conditioning. In addition, it is a practically new property, since its construction was completed in 2012.

• The final price of the transaction (including expenses, furniture, taxes, etc.) amounts to €154,466. Estimated net rental yield: 5.5%. Estimated IRR of the transaction: above 9%. These are estimates and are not guaranteed.
• It is a home that already has a tourist license. In addition, it is located in a building fully dedicated to vacation rentals, which reduces, without eliminating, the legal uncertainty. The Alicante City Council has, for the time being, placed no known obstacles on tourist apartments, although the regulations may change.
• The property is located on Calle Mayor, one of the main arteries of the Old Town of the city, in the Barrio Santacruz. Full of restaurants, bars, and entertainment venues. A few meters from the seafront promenade, the port, the City Hall, the Co-Cathedral and the Postiguet beach. It is the area with lower seasonality, and higher daily income for all property types, within the City of Alicante.

• The planned sale (exit) price is €180,000, an amount that, according to our estimates, is affordable for a large number of investors, which could make it easier to sell; this is not guaranteed.

Despite being located in Alicante, management will be handled by Brickstarter. We will continue to set the rates, booking policies, and communication with guests, while the current manager will take care of maintenance and cleaning.

After analyzing all this data, at Brickstarter we have decided to propose the apartment on Calle Mayor, Alicante as an investment opportunity. You can view its property page, with its full information and its risks. 

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

If last week we announced the sale of our first opportunity (Penthouse in Bolsería), this week we are announcing the signing of the earnest money contract for our second opportunity (Plaza Cisneros), whose sale is planned before the end of July, although this is not guaranteed.

This brings us double joy. On the one hand, the closing of the sale of the first opportunity and the signing of the earnest money agreement for the second (the result for each investor depends on each transaction and is not guaranteed), and on the other, a first demonstration of how our model works, which does not guarantee future results.

Let's summarize the transactions:

PENTHOUSE IN BOLSERÍA

In November 2017, we closed the transaction for the Penthouse in Bolsería. A property that was acquired from a bank for €202,000. Taking into account taxes, expenses, renovation, and furniture, the total cost of the transaction was €239,705.

After the completion of the works, we managed (on January 3, 2018) to put the property into operation.

With the renovation completed and the property brought up to standard, a capital gain was generated (which does not guarantee future results), but it was still far from our initial sales target of €288,000. For that, the most important thing was still missing: demonstrating the property's capacity to generate a return. That is, turning it into an asset that, in addition to its intrinsic value, would have an extra valuation for its capacity to generate rental income.

To that end, we proceeded to operate it as a tourist rental home through platforms such as Airbnb, Booking, Homeaway, etc.

APARTMENT IN CISNEROS

With our second opportunity, everything began in January 2018, when we acquired an apartment in Plaza Cisneros for €188,000. Taking into account the expenses we mentioned earlier, the total cost of the transaction was €229,395.

Once the property was acquired and the home was prepared for conversion into a tourist rental, we proceeded to operate it. This is how the added value of the transaction was generated; the result for each investor depends on each transaction and is not guaranteed.

This transaction therefore fits the business model we apply: creating operating real estate assets, with the aim of selling them later.

The goal: the sale of the property

Since we began marketing the properties, we have received interest from investors in acquiring them.

In the case of the Penthouse in Bolsería, a home was offered with an estimated gross return close to 10% (estimated sale price of €288,000 and with confirmed annual bookings of almost €30,000 on that date; historical data, which does not guarantee future results). It is an estimated gross return, not guaranteed, that depends on costs, occupancy, and purchase price.

After weeks of negotiation, the sale was finally completed at a price slightly higher than that set in the business plan (€290,000), 6 months after the property went into operation (historical data; does not guarantee future results).

Regarding the apartment in Cisneros, an earnest money agreement for the apartment was signed for a value of €265,000, with confirmed annual bookings of €28,000 on that date (historical data; does not guarantee future results); the anticipated return is not guaranteed until the sale is formalized. The final sale is planned for the end of July, which would close the process in about 6 months, with no guarantee as to timing.

In this way, our investors have benefited from the return of the properties while they were in tourist rental operation and may benefit, where applicable, from the capital gain arising from their sale, the amount and timing of which are not guaranteed.

Asset turnover

When talking about returns, we often ignore one of the most important variables: time. It is not the same to obtain an estimated result in 12 months as in 6 months; both are estimates and are not guaranteed.

This is where the proposition of Brickstarter lies: investing in assets below market price for their renovation and subsequent transformation into a productive unit (tourist apartments), with the aim that the property appreciates in value and can be sold, with no guarantee that this will happen or of any timeframe.

We seek to create value through renovation and putting the property into operation, and we hope that the buyer values the fact that the property is sold as an operating property. They are acquiring an operating, furnished property, with future bookings and professional management.

How do we manage our apartments?

We are not magicians; we achieve all this by implementing our specific business model. A professional model based on the use of multiple tools, with proprietary algorithms and Big Data technology.

With this, we obtain very complex information which, when correctly interpreted, provides us with the tourist opportunities that we offer our investors with an estimated return in line with our analysis criteria, with no guarantee of results.

With the proprietary algorithms we have designed, we create a business plan for each home, and we also adjust tourist rental rates according to demand. In this way we monitor each home and inform our investors of its progress. 

Our wish: that our investors are satisfied with the outcome of each opportunity.

If you would like more information or are interested in making an investment, you can contact Brickstarter.

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

The gross income of these homes is no lower than 150 thousand euros per year, reaching the far from negligible figure of 269 thousand euros a year for the most successful of them; this does not equate to a return for an investor, which depends on costs and purchase price.

We recommend that you explore our interactive table a bit so that you can check the data for yourselves. (You can also click on the tables below. Remember to press the "Clear Filters" button to deselect).

Those located in Barcelona city are situated in the center of the city, very close to the main places of interest. They act as private hotels, offering luxury and comfort. They are large properties (some are several properties combined in order to accommodate large groups), bright and open-plan.  The ratio of bathrooms per guest is very high, as is the accommodation capacity, which confirms the theory we hold at BrickStarter about the target audience for these services: groups of people close enough to share a space but not close enough to share a bathroom.

On the other hand, the homes that succeed outside the city are genuine luxury and leisure complexes, designed exclusively for enjoyment. All of them have a swimming pool, a chill-out area, and a very high accommodation capacity, making them well suited to organizing small - and not so small - events. In rural areas tourism may be a weighty factor, but not as relevant as having a private space in which to enjoy oneself away from everyday life.

More amenities, more gross income

In this sample, properties with more amenities and capacity tend to record higher gross income. Barcelona serves as a mirror for those of us who may want to invest in the Airbnb business.

We have analyzed the apartments in a little more detail on our blog on Rankia.

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

To set the scene, we had reached the conclusion that it is on the Mediterranean coast that the market works best for Airbnb.

And within the coast, we saw that there were some provinces where, even though the business model works, it would be more difficult, a priori, to obtain a return since there is an oversupply of properties dedicated to this service. (Barcelona, the Balearic Islands, Málaga).

The Valencian Community ranks, however, high enough in the ranking of communities to say that it is a model that has been accepted, but not so high (at the level of communities or provinces) as to consider that there is an excess of supply. On the contrary, we said that, given the political situation in Spain, demand is likely to follow an upward trend to the detriment of Catalonia.

The data from Alicante. Comparisons are useful, not odious.

Now that we have defined the Valencian Community as an interesting region for the Airbnb market, let's see what the province of Alicante offers us. As always, we will put the data on the table.

The map is interactive again, and you can access the profile of each of the properties on Airbnb by clicking on each of the locations on the map or on its registration number located below the columns of the table.

Eight properties bring in more than €100,000 in the province of Alicante

To assess the data with a bit of perspective, it is worth taking a look at the post in which we talked about the homes with the highest income in Valencia.

We immediately realize that they are two completely different worlds. In Alicante, the properties with the highest income are located outside the city, most of them in the coastal area between Jávea and Altea.

On the other hand, while in the case of Valencia we were talking about 6 properties with gross income of between €60,000 and €90,000, here things change a lot, since we move on to studying 8 properties with more than €100,000 in annual gross income.

Looking at the location of the properties, it might seem, then, that this income derives from strongly seasonal tourism. 

Of course, in some of the properties we can see a strong contrast between some months of the year and others.  But in general terms a fairly stable and continuous average of monthly income is maintained. In fact, although they are properties relatively close to the beach, they offer the possibility of enjoying the same options as the beach, or more, but in a private setting.

Size DOES matter.

What does remain the same, despite the change in the type of geographic location, is the type of dwelling. If you visit the profile of the properties on Airbnb, you will see that, just like those that generated the most income in the province of Valencia, they are large properties, with many bedrooms and bathrooms, which also include many additional amenities, such as a swimming pool, a barbecue, a jacuzzi, or leisure items such as foosball or even volleyball.

The target audience is groups of people whose intention is not to spend much time away from the house. Family gatherings or groups of friends, who want to enjoy the amenities the property offers all together.

The homes that succeed in the Airbnb business are not intended for rest, but for pure, unadulterated leisure; and the greater the range of it on offer, the higher the income tends to be, with no guarantee of a return.

And if we add large spaces to this, so much the better.  Hence, in this case we are not dealing with apartments, but with large villas.

And this is the main difference between the two provinces and probably the direct cause of the Alicante villas generating higher gross income. 

The greater the accommodation capacity, the higher the gross income of these properties tends to be; this does not imply that the investment is profitable.

Brickstarter is a real estate investment platform specialized in tourist apartments. (If you want to keep up to date with all our publications, don't forget to sign up for our newsletter).

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

Leaving the Madrid case aside, we can assume that the provinces on the Mediterranean coast are the ones where the business model of Airbnb is most firmly established. However, we have also seen that there are extremely saturated provinces. In both Barcelona and Málaga it would be more difficult to start a business of this type, because of the excess supply, than in any of the provinces of the Valencian Community (which receive a large flow of tourism).

In fact, given the current national political situation, at the moment the Valencian Community receives a large part of the non-seasonal tourism that used to go to Catalonia. And as we mentioned in another post, there would be barely half as many advertised homes.

We could conclude the analysis of the state of Airbnb in Spain by saying, with the data in hand, that the business is widely established in the coastal areas of the Levante, except for Madrid, but that some of them already have too much supply, so it is necessary to assess carefully where to set foot before deciding to invest.

On the other hand, in the interior and along the rest of the coastlines the model is barely established, but many of these provinces are nonetheless good tourist destinations. Here the investment could be riskier and with a more uncertain outcome.

At BrickStarter we give you the data. As always, the decisions are yours.

We encourage you to sign up for our newsletter to receive our latest news.

We have taken the province of Valencia as an example (naturally, since it is the area we work in) and we are presenting the data we have obtained so that you can judge for yourselves. You can see it below in the interactive table we have prepared for you, where you can verify all the data, featuring the six properties in operation that bring in the most money annually through Airbnb. If you select a property on the map, a dropdown will appear with the link to visit the property's page.

As you can see, all of them fall within a range from €60,000 to €90,000 per year. These are published gross revenues, not a return for the investor. What can we learn from this study?

A reasonably sharp eye can spot the factors that all of them have in common: the 4 factors they share.

1. The spaces.

 The average number of bedrooms in these six homes is 6, and the average number of bathrooms is 4.6.

This means these are properties capable of hosting many people. But at the same time, they are capable of providing a bathroom for each person or almost doing so. In this sense, it would be a model similar to that of a hotel. However, the target audience is rather focused on groups of people.

Social gatherings, family get-togethers, etc.

People who want to be together for the time they share, for which a hotel is not the most viable option, since it does not offer common areas where they can enjoy leisure and each other's company in a way similar to what one can do at one's own home, with the comfort of not being in one's own home.

2. Flexibility.

The minimum stay in four of them is one day, and in the other two, two days. Unlike classic vacation rentals that work by the week, by two-week periods, or by the month, an Airbnb has to be flexible in order to succeed. Weekend visits can be just as lucrative as working with two-week stays. Especially considering that one is an already saturated sector and the other is on the rise. And while in summer people can afford longer vacations, during the rest of the year what predominates are weekend getaways or long weekends built around a holiday.

3. Quality and price.

The average daily rates of these houses, with the exception of one of them, are between €200 and €400. Which, for whoever receives that amount, sounds appealing, but let's try looking at it the other way around. There are 16 of us who want to rent a house for a weekend. Let's say they ask us for €350 per day. €700 for the whole weekend. A simple division tells us that for €43.75 each we would have accommodation for all 16, in which to feel at home for two days.

But even more than the price, quality matters. Taking a look at the properties we have been talking about, we realize that they are luxury homes. While that is not within everyone's reach for a lifetime, it is something we can afford for a couple of days.

That is why the business model is on the rise: according to this data, it appeals to customers and generates gross revenue. 

4. The location

Four of the six properties are located in the center of Valencia. This is no coincidence. It is important to have everything close at hand, especially when you are visiting a place you do not know. Being able to be sure that all your needs are covered. One might think that the ideal location would be close to the beach, but the data does not support that. Airbnb is not a seasonal model but an annual one. And the center of a city tends to be its least seasonal part.

At BrickStarter we believe that this business model may be an investment opportunity, with the risks inherent in any real estate investment. You can view the property page for Mossen Sorell, with its full information and its risks. This property was acquired based on the analysis of our Big Data, without this guaranteeing any result.

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

This time we are going to show you how we do it at BrickStarter in a way that you will find as instructive as it is simple. We will take as a case study our Mossen Sorell apartment and show you the internal process we follow at BrickStarter when proposing this investment opportunity. To do so we present, as we usually do, the data that are part of our internal Big Data, so that they are as illustrative as possible. Let's begin. 

1. SEPARATING THE WHEAT FROM THE CHAFF.

This is very important. You have to know what is interesting and what is not. We already talked in another article about the return on the Airbnb business and saw that to make the most of it you have to know where to invest.

That is why we analyze the range of homes that we present in the following chart in search of the most attractive type of property. In it we bring you the evolution over recent years of the properties created. They are divided by number of bathrooms and bedrooms, which from an investor's point of view is essential to take into account. 

As we can see, there is a surplus of one-bedroom, one-bathroom homes. This is clearly seen when you analyze the evolution and projection of the average occupancy rate, as well as of the average daily income. The market is packed with this type of product; therefore, this type of property presents a higher risk of saturation.

Other options might prove more viable from an economic point of view. In this regard we had already ruled out a fairly wide range of the market. 

2. LAW OF SUPPLY AND DEMAND

That led us to take an interest in the type of property that has two bedrooms and two bathrooms. Next, we move on to analyze the evolution of the main variables:

In this chart we can see many interesting things. On the one hand, we see the gradual entry into the market of properties with the aforementioned characteristics – 2 bedrooms and 2 bathrooms – which is very gradual, so the market could take a while to become saturated. On the other hand, we see the occupancy ratio, which evolves at a pace similar to that at which apartments with these characteristics are entering the market. And finally, the data point that points in the same direction is the growth in average monthly income seen in this type of property, which  is evolving upward as you can see. The obvious conclusion to draw from this is the following: the data indicate that the new supply of this type has been absorbed by demand so far. It is a product that has demand and whose increase in supply is being absorbed by the market, so the main variables that affect income continue to show an upward trend. With this data in hand we decided to delve deeper into this type of property and estimate its potential return.

3. VERIFICATION.

 In the following chart we can delve a little deeper into what we have been saying.  The map shows the properties that we have taken as a sample for the study we present to you, all of them, as you can see, located in the center of Valencia, which we used for our verification process. 

The average monthly income of all of them during 2017 is €1,832. The lowest average daily income in the sample was €84.93, a figure we took into account in our analysis. Likewise, we observed an average annual occupancy rate of 68.55% in 2017 in the sample analyzed; past data do not guarantee future results.

After analyzing all this data, at BrickStarter we have decided to propose the Mossen Sorell apartment as an investment opportunity. You can consult its fact sheet, with its complete information and its risks.

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

As we have been seeing throughout the year, the number of tourist accommodations that have been advertised on Airbnb has been increasing until reaching a maximum of 4,767 new properties in 2017 (data up to the first week of December), which means an increase of 17% compared with 2016. 

However, despite this increase, if we analyze the evolution by quarter, we see that the growth is due to the strong increase in the first 2 quarters of the year, since the pace at which new apartments are created has slowed markedly in the last quarters of the year, especially compared with the initial trend. At least that is what can be inferred from the analysis of the database of the leading portal for tourist accommodation, for the city of Valencia. 

Analysis by district:

If we carry out a more detailed study by district, we see that, as last year, the districts that grow the most in advertised properties are the districts preferred by tourists: Ciutat Vella, Poblats Marítims, and L'Eixample. In percentage terms, the district that grows the most compared with 2016 is Poblats Marítims, and the current investment fever in this district has meant that in absolute terms, Poblats Marítims is now the second district with the most advertised properties, behind only Ciutat Vella. In this way, L'Eixample is relegated to third place as the district with the most advertised properties.

From a percentage point of view, we see that the Ciutat Vella district, despite being the district with the most new listings, loses weight overall, mainly due to the strong boom that "Poblats Marítims" has experienced, as we have pointed out.

Total number of properties advertised on Airbnb by district and type: evolution.

If we analyze the evolution of the type of listings, we see that in 2017, the appearance of new listings of entire properties has lost strength compared with the appearance of listings of private rooms in shared apartments.

 If we carry out this same analysis by district, we can observe that there are clearly neighborhoods where listings of entire apartments are growing in percentage terms (Ciutat Vella and Poblats Marítims) and districts where the creation of listings of private rooms in shared apartments predominates (Benimaclet, Rascanya, Jesús, the Plà del Real, etc.).

We will have to keep an eye on the future evolution of these types of variables and assess the reasons for this slowdown in the creation of newly advertised properties. At Brickstarter we already announced that there are certain types of apartments that have been suffering from the current oversupply, and now more than ever it is necessary to carry out a good market study before making decisions.

We invite you to sign up for our newsletter to receive our news.    

It is an apartment located in one of the most emblematic and beautiful squares of El Carmen: the Plaza Cisneros (click if you don't know it), in one of the best-known areas of El Carmen: La Seu. The square is halfway between the Torres de Serrano and the Plaza de la Virgen, two monuments that are a must-see if you come to Valencia. It is a pedestrian square that is home to the Palacio de Cerveró and the old house Palacio del Señor de Náquera. The square is 200 meters from the Turia riverbed.

The main features of the apartment are:

1. It is a first-floor apartment, in a building with an elevator (which could make a future sale easier); even so, regulations may change and affect operation.

2. The apartment is exterior-facing, very bright, with a balcony and a terrace that look onto Plaza Cisneros itself. From the balcony you can see the Torres de Serrano. In addition, the apartment has an interior patio, which we will decorate appropriately, since foreigners value it highly.

3. It is a very well laid-out apartment, in which hardly anything needs to be changed. It has 3 double bedrooms, and a maximum capacity of 8 people.

4. Regarding the works, hardly anything is going to be done; we estimate that the apartment will be in operation one month after receiving the keys.

5. The acquisition price is €188,000, and it has a current valuation of €232,152, that is, it is acquired below its market valuation (19% according to an external valuation). All this means that even after paying all the registration costs (notary, TPO, etc...), we are still below the market price.

6. The average rent in the area for an apartment with these characteristics (3 bedrooms) is €9.00/m² (Idealista data), so a traditional rental would already yield €819/month. With a vacation rental, higher income is estimated, without being guaranteed.

7. Although "Ciutat Vella" is a saturated neighborhood, according to our data, this type of property has shown an upward trend in monthly income, which may not continue.

You can consult the property's fact sheet, with its complete information and its risks. Click here for more information.

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

As a curiosity, we recommend that you study the differences between the various statuses (R=Booked, B=Blocked, A=Available).

We will soon publish our full tool. Don't forget to register to receive the news from our blog.

The tool

Here we present a small sample of our interactive tool, which includes historical data from 2016, allowing you to play with the different variables and helping you clear up your doubts. (To access our full tool, which will be available very soon on our website, you will only have to register, and you will get access to our entire database)

Although we have tried to configure the tool to be as simple and intuitive as possible, you may feel a little lost from time to time. If that happens, do not hesitate to set the tool back to zero by clicking the “reset” button.

Sometimes, applying too many filters can be counterproductive, since heavily filtered data may not be very representative.

To make the tool "lighter", we have included only the prices of the most recent months. We will keep updating it and adding more months in the coming weeks. Sign up for our newsletter and follow us on social media to receive our news.

We have selected an apartment that, according to our analysis, meets these criteria.

Main features of "Penthouse on Bolsería"

First, as we have mentioned, it is a duplex penthouse located at Calle Bolsería 36 (almost at the corner of Plaza del Tossal).  The apartment has the following features:

1. It has two terraces: a square front one of 25 square meters and a rear one of about 8 square meters.
2. 3 bedrooms will be set up in the apartment, and it will have a maximum capacity of 8 people. (Something in high demand with little current supply, so we expect above-average income, although it is not guaranteed)
3. It has two full bathrooms, something very hard to find in El Carmen and something in high demand.
4. The building has an elevator and is completely renovated (this could make a future sale easier)

Second, it was an opportunity to buy below the market price. (It is an apartment acquired from a bank, originating from a foreclosure).

• The apartment was acquired below its valuation, which does not imply a guaranteed gain for the investor. The apartment is valued at €248,175, and it was acquired for €202,000. (The valuation was carried out by a third party)
• Regarding the uncertainty about the legal status of tourist apartments, according to our analysis, this apartment meets the requirements set out in the draft preliminary bill of the Conselleria de Turismo. (That is, this apartment would meet all the requirements demanded in the strictest scenario proposed by the Conselleria)
  • Only one dwelling per landing.
  • The dwellings located below are all tourist apartments that are already legalized.
  • All the documentation for the legalization of the property as a tourist apartment has already been submitted.

Finally, the renovation works on the apartment are almost complete, so it is planned to start operating shortly, with no guaranteed date.

Regarding the expected income for this apartment, you can consult the market study on the property's fact sheet.

Upper floor:

Lower floor:

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

But how big is it? How many of the tourists who visit the city do so by staying through Airbnb?

Although it is difficult to know exactly how many tourists stay in each booking, what we can estimate is the total number of places booked.

Thanks to publicly available data, today we know that, between June 2016 and June 2017, almost 2 million accommodation places were booked through the Airbnb platform.

Once again, the district that offers the most places is Ciutat Vella, with 32.16% of all places booked (more than six hundred thousand), followed by Poblats Marítims, with 15.16%, the other major center of tourist attraction.

The vast majority of the places booked are in entire apartments, although the 283,820 booked in private rooms in shared apartments (almost 15% of the total) stand out.

However, it does not seem that this increase in accommodation places is affecting the hotel industry, an industry that in 2017 is showing occupancy rates and income at all-time highs.

That is why at Brickstarter we want to share the tools we use to set the prices of our listings, and thus know what occupancy to expect, so as to make better-informed pricing decisions.

The tool

Here we present a small sample of our interactive tool, which includes historical data from 2016, allowing you to play with the different variables and helping you clear up your doubts. (To access our full tool, which will be available very soon on our website, you will only have to register, and you will get access to our entire database)

Although we have tried to configure the tool to be as simple and intuitive as possible, you may feel a little lost from time to time. If that happens, do not hesitate to set the tool back to zero by clicking the “reset” button.

Sometimes, applying too many filters can be counterproductive, since heavily filtered data may not be very representative.

To make the tool "lighter", we have included only the prices of the most recent months. We will keep updating it and adding more months in the coming weeks. Sign up for our newsletter and follow us on social media to receive our news.

The Airbnb database

To carry out this analysis we have worked with an Airbnb database in which all the registered properties were listed, along with the advertised daily price, and the status of the property (whether it is booked “R”, available “A”, or blocked “B”).

In this way some interesting conclusions can be drawn, since for example we can see that the average prices of booked properties are notably lower than those of unbooked properties.

On the other hand, it is important to point out that we have tried to leave the database as raw as possible. There are properties that are incorrectly registered in the Airbnb database, and although we could have removed them to make the tool cleaner, we preferred not to do so in order not to influence your analysis. Examples include entire apartments with zero bedrooms and zero bathrooms, properties with no district set, etc.

Very soon you will be able to access our full tool, which will be free for those who register. Remember to sign up for our newsletter and follow us on social media to receive our news.

If you would like us to help you manage your tourist apartment, do not hesitate to contact us.

Airbnb has paid out almost €35 million in the city of Valencia over the last 12 months. The area with the highest revenue is the Ciutat Vella district, with 38.3% of the earnings, followed by Poblats Marítims with 15% and the L'Eixample district with 11.7%, according to publicly available sources. Ciutat Vella stands out as the area most in demand among tourists, capturing almost 40% of total income, reaching €13.2 million compared with €5.2 million from Poblats Marítims and €4 million from L'Eixample.

But what would happen to these tourists without the accommodation offered by these platforms?

According to the Statistics Office of the Valencia City Council, in its study of hotel overnight stays as of June 2017, this is also a year of record highs for the hotel industry, with historic occupancy rates being reached and the industry proving unable to absorb so much demand.

Thanks to platforms such as Airbnb, HomeAway or Booking, the city of Valencia has increased its accommodation supply, allowing more tourists to come to Valencia. (Almost 2 million places booked through Airbnb alone, as we anticipated at Brickstarter)

But what is the economic impact of these platforms?

Taking into account the latest EGATUR tourist spending survey, foreign tourists who visit our country without buying a package tour spend 17.62% of their budget on accommodation. Taking these data into account, we can estimate that the impact on the city of Valencia of websites such as Airbnb or HomeAway is on the order of €200 million.

At Brickstarter we offer the opportunity, from €50, to participate in tourist apartments in the city of Valencia.

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

According to our data (June 2017), more than ten thousand properties have been registered on Airbnb, most of them entire properties, a trend that will keep rising if we look at the evolution over recent years: 4,064 new listings in 2016, compared with 2,149 in 2015 and 952 in 2014.

Of the various options offered by Airbnb (renting a whole home, a private room or a shared room), the number of private room listings (4,279 of the total) stands out, providing an average income of €992 per year.

Regarding the rental of entire tourist apartments, we can see that there has also been a sharp increase in advertised properties (registrations have almost doubled those made in 2015).

This increase in properties has caused signs of exhaustion to begin to appear, and the occupancy rate of certain types of apartments is starting to suffer.

It is important to take a great many factors into account when setting up a tourist apartment. It is necessary not only to carry out a market study, but also to forecast the evolution of supply and demand in order to try to predict variables such as the occupancy rate and the estimated average income.

At Brickstarter we invite you to register on our platform and for our newsletter to stay up to date with the latest developments in the sector.

Brickstarter is a real estate investment platform specialized in tourist apartments. (If you want to stay up to date with all our publications, don't forget to sign up for our newsletter).

However, to expand our sample we have broadened the set of comparables. In this case we have included all properties with 3 bedrooms and a single bathroom, whether or not they are penthouses.

With this expanded sample we obtain the following data:

Analyzing the main occupancy ratios, the income paid out by Airbnb and the estimate of annual income, we can see that for this category of apartments, properties located in the Ciutat Vella district have estimated gross income of €30,334 per year, which does not equate to a return for the investor.

If we analyze the maximum capacity of this type of property, it matches our property model, since it will be a property with 3 double bedrooms and a capacity of 6+2. (As a result, extra income could be obtained when there are more than 6 guests, without guarantee).

In this regard, some clarification is needed:

• Considering only properties with three bedrooms, we can see that the vast majority of them (8 of 12 properties) have two bathrooms. These properties show an estimated income slightly above the average.
• For this analysis, all properties of this type have been included, whether or not they are penthouses, because the scarcity of comparable properties can distort the reality of the market. However, it is important to point out that penthouses show above-average occupancy ratios, which could translate into higher income, without guarantee.

If we study the evolution of the supply of this type of property, we can see that of all the apartments registered on the platform, only 9.66% of the new apartments have 3 bedrooms.

Apartments with 3 bedrooms, despite having a lower occupancy rate than apartments with 2 bedrooms, could be less affected by the oversupply in the Ciutat Vella district than apartments with 1 and 2 bedrooms, although this is not guaranteed.

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.

The interest in real estate investment and the economic potential of tourism in our country are well known.

From the union of these two concepts came this new and innovative initiative, which we have called BRICKSTARTER.

Our experience in sectors such as finance, real estate and law led us to bring this real estate investment project to life.

We are a young company, but we have a professional team.

We have managed tourist apartments on the Mediterranean Arc (historical data; it does not guarantee future results).

We have come to change things.

At Brickstarter, we open up a new investment opportunity to large and small investors alike.

Through our real estate investment platform, you become a tourist apartment investor without needing large amounts of capital.

From €50 you can participate in the results of a property, with a professional team taking care of its management.

With Brickstarter you do not have to manage the property directly: our team takes care of the operational management (tenant reception, maintenance and cleaning).

At BRICKSTARTER we take care of the management.

Our managers analyze locations of interest and are constantly on the move.

We want you to join us on this journey.

We analyze tourist apartments according to their location and type, and the income published in comparable areas.

This way, our investors can choose among the properties we publish and only have to decide which one to pick and how much to invest, as well as build their own portfolio.

Investing in tourist apartments with data analysis.

We rely on big data analysis of information from the main tourist apartment portals.

We analyze data from websites such as Airbnb, Booking, HomeAway and Idealista to estimate the potential return of a property, with no guarantee that it will be achieved.

You can participate in the monthly operating result of the property and in the possible capital gain on its sale, without guarantee.

With clear information.

You will have access at all times to information about your investment from our real estate investment platform, without needing to finance the purchase of an entire property, in a convenient way and with clear information.

As quoted by Josef Ajram in "El pequeño libro de la superación personal" (Alienta, Planeta 2016): "Those who claim it is impossible should not interrupt those of us who are trying" (Thomas Alva Edison).

Register on the platform and review the fact sheet and the risks of each opportunity.

Past or estimated returns do not guarantee future returns. Investing involves a risk of total or partial loss of the invested capital.