Practical case Mallorca: Apartment in Cala Ratjada – Retirement planning with foresight
Both buyers were in their early 60s and had secure incomes as well as a debt-free apartment in Germany. In addition, there was a well-built securities portfolio that was deliberately to remain invested for the long term.
At a glance
- Purchase price: 845.000 €
- Financing required: 591.500 €
- Equity: 428.350 €
Anonymised case figure · not a binding statement for other projects · §34i GewO
A second home today, a new home tomorrow
A couple from Bremen had travelled Mallorca over many years. While different regions were initially the focus, Cala Ratjada increasingly became their personal favourite. The combination of harbour, beaches, restaurants and year-round infrastructure finally convinced them to prepare the next stage of life on the island.
As retirement was still about five years away, the property was initially to be used for longer holiday stays. A permanent move was planned afterwards.
Initial situation
Both buyers were in their early 60s and had secure incomes as well as a debt-free apartment in Germany. In addition, there was a well-built securities portfolio that was deliberately to remain invested for the long term.
They were looking for a modern apartment with a lift, a generous terrace and short distances to the harbour and the promenade.
Financing overview
- Purchase price: 845.000 €
- Additional costs: 109.850 €
- Renovation and bespoke fit-out: 65.000 €
- Total investment: 1.019.850 €
- Equity: 428.350 €
- Financing required: 591.500 €
The financing share corresponded to around 70 % of the purchase price.
The challenge
The apartment was immediately habitable. Nevertheless, the buyers planned to modernise the kitchen and the bathrooms, replace all floor coverings and redesign the terrace.
In addition, the financing was to be aligned with the later pension situation from the start. The monthly burden had to remain easily bearable even after leaving working life.
Analysis
First, today's income situation was compared with the pension income expected later. This resulted in a long-term financing plan that took into account not only the property purchase but already the later stage of life.
All renovation costs were then fully calculated and included in the total investment.
The buyers deliberately chose to keep part of their assets as a reserve rather than deploying all of the equity.
Financing solution
The financing was built with around 70 % of the purchase price.
The additional costs as well as a considerable share of equity were paid from available funds.
All renovation measures were also financially accounted for before the purchase. As a result, the apartment could be adapted to personal expectations immediately after handover.
Outcome
After the renovation was completed, the buyers had a high-quality apartment at their disposal that is already used regularly today.
When retirement begins, no further conversion is necessary. The planned move to Mallorca can take place without additional investments.
What other buyers can learn
Anyone planning retirement over the long term should not think only about the purchase price. Equally important are financing that remains bearable later on and renovations that are completed before the permanent move in.
Frequently asked questions
Does it make sense to buy a property a few years before retirement?
Why were the renovation costs planned in immediately?
Should all wealth be used as equity?
Conclusion
The purchase of an apartment in Cala Ratjada shows how important a long-term perspective is in property financing. Anyone who takes into account not only today's needs but also their financial situation in retirement creates the basis for a relaxed new start on Mallorca – without later renovation stress and with financing that remains easy to plan over the long term.
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To the case report →A similar situation in Spanien? Let's talk.
Every financing in Spanien is an individual case. In a free initial consultation I will tell you honestly what is feasible and which bank fits.
Book a free consultationAnonymised individual case, not a binding statement for other projects · Siegfried Perini, BAFA-notified for the cross-border activity of the owner Olga Nikushkina · §34i GewO · no tax or legal advice · no financing commitment; conditions depend on creditworthiness, loan-to-value and bank