Cave Homes in Spain from €89,900

My senior researcher, Margaret Summerfield, has boots on the ground in Spain, where she’s scouting the country’s southeastern Mediterranean coast around Alicante…

Spain has been a firm fixture on my global real estate beat for close to two decades. During that time much of my focus has been on Spain’s southern coast and the Costa del Sol.

The Costa del Sol is one of the world’s most inherently desirable places…offering glorious beaches, ancient towns and cities, incredible food, world-class golf courses and marinas, and 320 days of sunshine a year.

The Costa del Sol is one of the original jet-set destinations, attracting Hollywood stars and European royalty since the 1950s.

In the 2010s, as the world rebounded from the global financial crisis, I predicted this region would hit a whole new level. And I’ve since brought members of my Real Estate Trend Alert group a host of incredible deals here. To give you a few brief examples…

• Gain of €155,000—I brought RETA members a deal to own sea-view homes in a community called Rock Bay. One RETA member bought here in 2018 for €230,000 and has since sold for €385,000.

• Uplift of €180,100—RETA members had a chance to own luxury homes in a golf community called Ibergolf. A RETA member who bought here in 2017 for €189,900 accepted an offer late last year for €370,000.

• €223,000 More—In 2020, RETA members had the chance to own luxury condos in a community called Casares Costa. A condo that a RETA member bought here for €327,000 was sold last year for €550,000.

Then there’s our most recent opportunity on the Costa del Sol…

Just last November, RETA members had the chance to own incredible luxury condos less than 30 minutes’ drive from the chic, cosmopolitan city of Malaga, the gateway to the Costa del Sol. I expect these three-bed, Mediterranean Sea-view condos that RETA members could own from just €359,700 to be worth €500,000 within three years of delivery—that’s €140,300 more. And that’s likely being conservative.

At RETA, we were ahead as the Costa del Sol exploded in popularity, and RETA members have benefited hugely as a result. But as more and more people have flocked to the Costa del Sol each year, incredible deals like these have become increasingly hard to find…even with the collective buying power of my RETA group.

So, I’m looking for the next places on Spain’s Mediterranean coast, which is why I’ve asked Margaret to scout the Costa Blanca…

Spanning 200 miles in eastern Spain’s Alicante province, the Costa Blanca boasts exceptional weather, rich history and culture, and a huge number of postcard-perfect beaches.

The region has long been a major tourist draw, but now new investment is coming. Exciting things are happening here. I’ve been in contact with a number of best-in-class developers who have big plans along this stretch of coast.

Things move fast in our world, so I’ve asked Margaret to check everything out. If it cuts muster, I’ll put boots on the ground personally when I return to Europe from Cabo next month.

So far, I’ve been excited by Margaret’s initial reports. I’ll share the full details on everything she’s found in the coming week.

But today, I wanted to highlight a quirky idea Margaret found while scouting this stunning corner of Spain…

It’s opportunity to own traditional Spanish cave homes from just €89,900…

Wishing you good real estate investing,

Ronan McMahon, Overseas Real Estate Expert

P.S. Ever visited the Costa Blanca? I’d love to hear your thoughts. Let me know by replying to this email.

 

Who Wants to Live in a Cave?

By Margaret Summerfield

I’m scouting in Spain this week, along the Costa Blanca and down into Murcia and Almeria. On one drive, I noticed some rather unusual homes.

We were passing through the town of Cuevas del Almanzora. Just outside, there are more than 200 cave homes. Some are little more than a hole in the rock. But as you drive around, you’ll see some that are lived in today. Many look like “ordinary” homes from the outside.

Cave homes might sound like a crazy idea. But they have their advantages. They stay cool in the summer and warm in the winter. The thick cave walls also help block noise. The biggest disadvantages are usually lack of light and ventilation in the back part of the home.

The typical cave home is built into a cave or the side of a hill. Dug out by hand, each is unique. I saw part-excavated ones and abandoned ones. (But bear in mind that even “abandoned” cave homes likely still have an owner.)

These homes were basic when they were built originally and often did not come with running water or electricity.  Some of the modernized ones come with every convenience.

I didn’t have time to view any properties. But I did search for local listings.

There’s a one-bedroom cave home in Cuevas del Almanzora listed at €89,900. A second bedroom could be added. It is spacious but could do with some updating. (Listing here.)

Close to Cuevas del Almanzora (around 25 minutes by car) is the town of San Juan de los Terreros. A cave home here is listed at €195,000. It’s three-bed, three-bath, and just steps to the beach. This one needs no updating. There’s a modern kitchen and a terrace off the living space. Lean out from the terrace, and you can see the sea, it’s so close.

Finally, back to Cuevas del Almanzora and a three-bed, two-bath cave home, with two living rooms. This one looks the most authentic. There’s a courtyard patio on the ground floor and a large terrace above.

It’s less than a 10-minute drive to the very nice beach at Vera and the town center. The interior is stylish, with high-end finishes. It’s listed at €249,000. (Note: we have not done due diligence on any of these properties or the listing agent.)

Cave homes do have a following, but I see them as a “lifestyle” buy rather than an investment. They’re not to everyone’s taste, so your market for resale is somewhat limited.

If you’re all in, and you want to buy a shell, get an expert in to help—this isn’t a standard renovation. And don’t get too carried away. Over-spend on a luxe renovation, and you may not get your money back when you sell.

A safer bet might be to stay in a cave home first, to see whether it’s really for you. There are listings on Airbnb, from a room in a cave home through to a full house.

Here’s a room in a cave home available for a very reasonable rate…

Here’s another listing I found that looks nice. For this one, you get the whole property…

Ronan says: I’m fascinated by these cave homes. They remind me of the Trulli homes—traditional white-washed houses made of limestone with conical roofs found in southern Italy. They look like this…

Like the Trulli homes, the cave homes Margaret highlights have an incredible charm.

That said, these are not homes I would personally buy, either as a lifestyle or investment play. From a lifestyle perspective, I want light…air…a sense of space. Things you don’t tend to get in a cave home. And as Margaret points out, this is a very niche market, which makes resales challenging.

That said, the cave home Airbnbs look very cool. I’ve love to spend a night or two in an Airbnb like the ones she spotlighted.

In fact, I’ve added it to my to-do list if Margaret’s reports on the Costa Blanca are positive and I end up scouting this part of Spain in the near future.