Over the last 10 years the Costa del Sol has earned a reputation as one of the most lucrative year-round rental accommodation markets in Europe. More and more people are looking to rent their properties due to the slowdown in the property market, and this is a good option to maximise your return on investment while the property market is weak.
Renting out a property in Spain can be complicated even for experienced owners and agencies, let alone the uninitiated. So, based on Homecare on the Web's inside knowledge, we're going to let you in on a few secrets and some invaluable tips to guide you successfully through the whole process.
Potential pitfalls of renting your property
There is money to be made from renting your property. You can earn you between 500 and 800 Euros per week for a 2 bed property as a holiday rental or 700 and 900 Euros per month as a long term rental and there is still a demand for rental properties. However, you need to be aware of the problems as well as the advantages before you start.
You need to be sure that you are able to manage the following situations, or can find someone who can:
- Marketing your property
- Checking prospective tenant's references
- Organising legally binding rental contracts in English and Spanish
- Coordinating cleaning, providing new bedding and ensuring the property is in good condition
- Dealing with emergencies e.g. tenants losing keys, water leaks, broken appliances etc. as and when they happen
- Collecting the rent and dealing with any late or unpaid rent
- Dealing with tenants who have accidents or injuries whilst staying in your property
Make sure you are ready to handle situations that arise when you have tenants - happy tenants will keep coming back! Get help on the ground that you can rely on no matter what, for stress free rentals.
Short term or long term rentals?
If you are ready to rent out your property, then you need to choose between short-term rentals to holidaymakers, or to longer term tenants.
Remember that you still have to pay tax on income from your property, so speak to a financial adviser to clarify your personal tax situation before you rent your Spanish property.
There are clear benefits to both forms of rental. Here's the low down on both so you can weigh up the options
Long-term Rentals
If you're only using your holiday home one or two weeks a year, or perhaps not at all, we would suggest renting out long-term.
Renting out long-term means contracting a tenant to live in your home for a fixed period of time. That time period can vary, but in Spain it's typically between six months to two years. The tenant will pay you a fixed rent each month and pay all the utility bills during their tenancy. This offers you the security of having rent coming in throughout the year without the hassle of constantly changing tenants.
It's certainly the right time to rent out your property long-term. With the continuing drop in property prices, more people want to 'try before they buy', and will rent long-term until they find the right property to purchase at the right price. This means that despite the slowdown for sales, the long-term rentals market is buoyant, with a steady year-round demand for quality long-term accommodation.
Renting to holidaymakers
If you want to use your second home during certain times of the year and earn rental income the rest of the time when it's empty, then short term rentals would be best for you. This works for many home owners in Andalucía where you do not need a license to rent out your property.
One thing you should bear in mind before renting out your property to holidaymakers is the Costa del Sol rental market is highly competitive therefore it is a challenge to achieve the bookings you are hoping for.
The good news is that there are some steps you can take to improve your chances of attracting holidaymakers to rent your home, and more often.
Effective and Affordable Marketing
If you are using a rentals agency they should do most of the work for you, so check what marketing they will undertake for your property. They should be marketing the property locally and online and also via travel agents and tour operators to maximise the amount of weeks a year you are able to it rent out.
If you want to avoid the agents' commissions you can take marketing your property into your own hands. Good sources of holiday rental bookings can be friends, family, work colleagues and neighbours so spread the word that you have a property for rent. Send round a good email including photos of your property, full details and the rates to everyone in your address book and ask your friends to pass it on to their friends and colleagues. This is a no-cost way to reach hundreds of people quickly. Advertising around your area in newspapers, property magazines or sticking up a notice in a local shop window can also be an effective way to generate holiday rentals.
Another tip is to advertise your own property on one of the many Spanish homeowners' holiday rental websites. This approach has been successful for many of our owners, who've greatly increased their holiday rental bookings as a result.
Here are some websites we recommend:
. Owners Direct
. Holiday Rentals
. Stay Marbella
. Independent Owners
. Holiday Villas
Keep guests coming back for more
When it comes to renting out property successfully, it's not just about attracting holidaymakers to your property in the first place that really counts - it's what happens during their stay. Happy clients recommend you to their friends, family and work colleagues; and there is nothing more powerful than word-of-mouth marketing. Our experience is that many rental clients return year on year to the same place - but only if they've had a happy time there before. Make sure everything is in place to delight them and be sure that someone is available to deal with any problems.
Remove the stress from renting your property
If you won't be in the country to manage your second home, try to find someone who will be and is willing to take responsibility for the property whilst you're away. We'd suggest you find a dedicated, professional rentals management company with a property management team, who can provide you with complete peace of mind, by freeing you from all the hassle associated with renting out your property.