Owners of second homes in Spain often buy their properties as an investment and want to capitalise on the money-making potential of the property when they aren’t using it.
To do this, they turn to rentals and choose between renting their property out long-term or short-term to maximise their income.
In recent years, holiday rentals have become more difficult, as the properties now have to comply with certain regulations and have a certificate to allow them to be rented. Like hotels, holiday rental owners need to ensure their guests fill in a form, make copies of their passports and register them at their local police station. Although most property management professionals will do this for you, this has put off some people from continuing with their short-term rentals.
In addition, holiday rentals have been badly affected by the travel restrictions imposed due to COVID-19. The busiest time for holiday rentals, between Easter and during the summer holidays was almost wiped out in 2020 for everything except national tourism. As we know, travel restrictions are still in place, Easter celebrations won’t be taking place, as usual, this year in Spain and summer travel is in doubt, so owners are looking for other ways to make money.
According to Stewart Wild, owner of Marbella Lettings, the long-term rental market is still strong and so this offers a very attractive option for owners who won’t be travelling themselves this year.
He explains: “We class long-term rental like gold because people are always going to need a home and actually lockdown has made people think where they would rather be. Many people who have been locked down and are working from home, or can commute to jobs on the oil rigs, for example, are deciding that Spain offers a better quality of life for their family and are making the move, so the demand for long-term rentals is increasing.
What I'm saying to most clients is to switch to long-term rental as a security measure, to safeguard the income from their property in these uncertain times. I’m advising people to put someone in the property for the next year, to return to normal in 2022. However, I also think it’s important to stay positive and I'm aiming for the summer. I'm hoping that by May or June, when the vaccines kick in, we'll start getting back to some kind of semi-normal. That's my hope anyway, with the information we have to hand, but there’s no doubt that long-term rental is the more secure option.”
It’s great news for property owners, or prospective buyers, that there are still good options to rent out your property. Although you’ll have to wait to use it yourself for a while, and the returns aren’t as high per week, it’s an excellent source of steady income, with little work required. Stewart advises anyone who wants to rent long-term to get a good agent, make sure the marketing is strong and the price is right.
According to Stewart as long as you meet these criteria it will rent relatively easily. The property should be a blank canvas, clean, clear and with everything working and decent photography to show it off to its best.
As a rule of thumb, a property on long-term rental will attract approximately the same revenue per month as a property on short-term rental would attract per week. So, if your apartment fetches €1,000 per week in August as a holiday let, it is likely to also achieve a monthly rental figure of €1,000 if let on a long-term basis.
Long-term rental provides consistency and reliability of income levels throughout the whole year, there are no changeover/cleaning costs to pay to a management company after each guest leaves, and the tenant usually pays the utility bills. In these uncertain times, this could be just what you need to continue to make money from your property without the stress.