Investing in luxury real estate at popular travel destinations is a growing trend as real estate investors seek to diversify their portfolios beyond the traditional commercial and multifamily strategies. It’s possible to blend your love for travel while maximizing your return on investment in desirable real estate markets.
PALMA DE MALLORCA, SPAIN – MAY 25: Swimmers on a beach in Palm (Photo by Isaac Buj/Europa Press via … [+]
What’s the Future of Luxury Tourism?
Worldwide demand for luxury travel is not just growing, it’s booming. With a rise in global affluence and the younger generations prioritizing travel experiences, the demand for luxury travel is strengthening. Moreover, modern technology, competitive travel costs, and the expansion of remote work have made it easier to reach these exciting destinations, further fueling the growth of the luxury industry.
According to Grand View Research, these factors contribute to a forecasted 7.9% compound annual growth rate (CAGR) in the United States luxury travel market from 2024 to 2030. Additionally, the Asia-Pacific market has an 8.9% CAGR estimate over the same period.
Luxury tourism is also growing in Europe, which accounted for 34.50% of luxury tourism in 2023 alone. Adventure travel and birdwatching are two of the most sought-after European luxury travel trends. Both are favorite pastimes in Mallorca, a cornerstone of Spain’s Balearic Islands and one of the world’s best spots for luxury travel and real estate investors.
Paul Misar, for instance, has over 30 years of international real estate experience and over 12 years of investing experience in Mallorca, where he currently operates his main office in the well-preserved coastal city of Palma. He has invested in various real estate ventures across different countries and has extensive experience in the German and Austrian markets since 1992.
Paul Misar states that his current Mallorcan real estate strategy is to “buy villas, penthouses and … [+]
Right now, the international real estate investor is most optimistic about Mallorca’s luxury real estate market, which offers properties costing from three million to thirty million euros. He focuses on holiday rentals and luxury villas across the island in some of the best parts positioned for investment growth.
Investing in Mallorca Real Estate
Aspiring investors may pursue Paul Misar’s local expertise and scout for opportunities on this historic island. The international real estate investor favors Mallorca for several reasons.
“The island, with a great variety of landscape and coasts—including over 200 beaches and bays—with impressive cliffs and 330 annual sunny days is safe,” says Misar. “The island has the wonderful Serra de Tramuntana which is also a UNESCO World Heritage Site. People love (Mallorca) especially as United States tourists discover the island more and more since 2023.”
Further optimism cases for investing in this idyllic Spanish island include:
- Minimal entry barriers: Mallorca has less rigorous regulations and tax policies than other European real estate markets.
- Favorable real estate prices: Real estate investors can benefit from the economic tailwinds of appreciating property values.
- Celebrity popularity: Mallorca is one of Europe’s finest playgrounds for the rich and famous. Amazon founder Jeff Bezos, Meta CEO Mark Zuckerberg, and basketball legend Michael Jordan regularly visit by yacht. Other celebrities, such as Michael Douglas and Catherine Zeta-Jones, own private villas or fincas (restored medieval farmhouses).
- Billionaire investors: Some of the world’s wealthiest individuals have investment property exposure through luxury hotels. The list includes Bill Gates, Sir Richard Branson, Bernard Arnault (owner of luxury fashion LVMH Group), and the Quandt Family (principal owners of BMW).
- More direct flights: Airlines are adding more direct flights from the United States and other international departure points. Spanish airport operator Aena reports that Palma de Mallorca had the third-highest passenger volume in 2023, only lagging Madrid and Barcelona.
- Increased interest from international visitors: Award-winning journalist Larry Olmsted listed the island as one of the world’s top vacation destinations that are becoming less overlooked by international travelers. The island has been a long-time favorite among Europeans but was mainly just a hiking and biking destination for travelers coming from other parts of the world.
Misar says these positive travel trends help make this iconic Spanish island one of the world’s most attractive real estate markets.
Best Places to Buy in Mallorca
Adapting investment legend Warren Buffett’s strategy of buying wonderful companies at fair prices, Paul Misar states that his current Mallorcan real estate strategy is to “buy villas, penthouses and other kinds of real estate just in the best location at the best price we can get.”
With this mindset, Misar encourages investors to start looking for properties in a handful of on-island locations:
- Costa de Planes
- Port Andratx
- Puerto Portals
- Son Vida
Each community has different luxury and lifestyle perks that may appeal to your particular investment strategy or travel interests. For instance, Misar likens the inland Son Vida to being the “Beverly Hills of Palma de Mallorca” with hilltop views of the region while Puerto Portals offers marina access with routine celebrity sightings.
Real estate investing is notoriously expensive and exclusive to investors with deep financial pockets. Managing luxurious properties also requires experience. Thankfully, Paul Misar and his wife, Jana, are developing several initiatives to prepare the next generation of real estate investors.
Regarding Mallorca specifically, they are planning an investment fund for smaller budgets requiring as little as $200,000 U.S. dollars (USD) to gain exposure to the destination’s best neighborhoods, including those mentioned above.
Additionally, Paul and Jana’s personal mission is to teach financial education to everyone attending their academies. The investor couple is also launching a real estate agent franchising system that can make buying, selling, or renting properties easier and help individuals build wealth.
Along with author Brian Tracy, Paul is publishing Limitless Abundance: The Universal Laws of Building Wealth and Personal Freedom in over 50 countries this summer. This book consists of 12 chapters discussing 19 timeless money laws. Misar observes that achieving financial independence is easier than ever as “We live in the richest time in all of human history. We are surrounded by more wealth and influence than ever before.”
“Never before have so many millionaires and billionaires lived in human history,” Misar concludes. Therefore, Mallorca is one of the best luxury travel destinations to witness this financial boon firsthand. Now, it can be an excellent opportunity to earn a competitive return on investment as real estate values appear poised to increase from the percolating worldwide interest in the island among the famous and wealthy.
Summary
Mallorca is one of the best places to invest in real estate benefiting from the steady increase of luxury travel demand. While this island has always been a popular getaway, it’s becoming a popular destination for international travelers. Increased travel interest plus an investor-friendly real estate market can be a win-win for investing and accessing the island’s most exclusive locations.