Renting a parcela for commercial use in the summer - what rent?

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30 Oct 2011 00:00 by ElSordo Star rating. 8 posts Send private message

G'day all,

It's been a while since I've been on this forum, but I hope you won't mind me picking your collective brains... :-)

I'm wondering what sort of notional rent would be reasonable for our beachfront parcela in El Palmar, near Vejer de la Frontera. It's an empty plot, but right across the road from one of the nicest (and busiest) parts of the beach. Lots of bars and restaurants around in the summer, but most everything shuts down in the winter. An acquaintance who's lived in the area for years would like to use it to set up a crêperie/café/surfboard rental shop during the summer months and has managed to negotiate his way through considerable red tape in order to get permission to open this last summer, albeit very hastily and in a fairly rough-and-ready way. He put a fair bit of money, time and effort into doing all that and getting the site usable and has probably taken a loss on this first outing, but the potential is there for a decent profit going forward. He'd like us to enter into a contract for the next five years, in order to allow him to make a decent run of the venture, and my idea is that instead of charging him rent we could have him invest in improvements to the site - walls, gates, planting of trees, etc. The site is just open ground at the moment, although a well and a septic tank are there there's no mains electricity or water for the time being, so for the moment he'll be doing a deal with the bar next door to share theirs, I guess.

Anyway, my problem is what to "charge" him, i.e. what to set against the monies he spends now on enhancements that will improve the value of the site, and which he won't take away with him at the end of the five years.

I know that this is a bit of a "how long is a piece of string" question, but I'd be very grateful if anyone has experience of this kind of thing and could throw a few words of advice my way. Thanks in advance!

 

 



This message was last edited by ElSordo on 30/10/2011.



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