Practical case Mallorca: Penthouse in Portocolom – Portfolio lending instead of selling securities
Both buyers were in their late 50s and had high incomes as well as a portfolio built up over many years with broadly diversified investments. Performance had developed very positively, which is why they wanted to avoid larger sales.
At a glance
- Purchase price: 1.580.000 €
- Financing required: 1.042.000 €
- Equity: 838.400 €
Anonymised case figure · not a binding statement for other projects · §34i GewO
Why good asset planning is sometimes more important than as much equity as possible
A couple from Munich had spent several weeks a year on the east coast of Mallorca for many years. Portocolom in particular had won them over – the natural harbour, the promenade and the relaxed atmosphere differed noticeably from the island's larger resorts.
When a modern penthouse with a large roof terrace and a view of the harbour came up for sale, they wanted to act quickly. Although sufficient wealth was available, the securities portfolio was to remain as untouched as possible.
Initial situation
Both buyers were in their late 50s and had high incomes as well as a portfolio built up over many years with broadly diversified investments. Performance had developed very positively, which is why they wanted to avoid larger sales.
Instead, the available equity was to be deployed in a targeted way, without unnecessarily liquidating long-term investments.
Financing overview
- Purchase price: 1.580.000 €
- Additional costs: 205.400 €
- Renovation (kitchen, air conditioning and terrace design): 95.000 €
- Total investment: 1.880.400 €
- Equity: 838.400 €
- Financing required: 1.042.000 €
The financing share corresponded to around 66 % of the purchase price.
The challenge
The buyers wanted to avoid selling larger parts of their securities assets. At the same time, the financing was to remain economically sensible and preserve sufficient liquidity for future investments.
The planned renovations were also to be carried out immediately after handover.
Analysis
Together, the entire asset structure was examined first. It quickly became clear that the size of the wealth was not decisive, but rather its sensible deployment.
Through the targeted use of equity, the acquisition costs could be covered entirely while sufficient reserves were retained. The planned renovation measures were fully calculated before the contract was signed.
Financing solution
The financing was built on around 66 % of the purchase price.
The available equity covered all additional costs as well as a considerable part of the purchase price. The renovation costs were integrated into the total investment from the outset.
As a result, no subsequent financing solutions had to be sought, and the securities assets could largely remain invested.
Outcome
After the renovation was completed, the penthouse fully matched the buyers' expectations. The generous roof terrace was redesigned, the kitchen modernised and the building services brought up to date.
At the same time, the long-term asset plan remained almost unchanged.
What other buyers can learn
Many property buyers have considerable assets that are invested for the long term. It is not always sensible to liquidate these entirely. A balanced combination of equity and financing is often the more sustainable solution economically.
Frequently asked questions
Should a securities portfolio be sold entirely for a property purchase?
Why were the renovation costs taken into account directly?
Does an equity ratio of over 30 % make sense?
Conclusion
The purchase of a penthouse in Portocolom shows that property financing should always be part of overall asset planning. Anyone who deploys equity deliberately, preserves long-term investments and realistically accounts for all investments from the outset creates the basis for durable financing and a relaxed start to life on Mallorca.
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Preserving wealth
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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