Most people thinking about buying a property in Spain, or those who already own a Spanish property, want to generate a rental income from their property.
Until recently many buyers and owners thought in terms of short term holiday rentals but the market is changing and if you don't want your property to be standing empty for months at a time you may need to rethink. Demand for long term rentals in Spain is extremely high – and this can be a good way to make your property work for you.
Although, proportionally, income from long term rental in Spain is much lower than holiday rent, this is offset by the fact that a regular income is sustained over the yearly period and utility bills are paid by the tenant.
Spain is still the number one holiday destination but with low cost airlines now flying to many new 'holiday hot spots', the success owners have enjoyed with holiday bookings over the past years may now begin to decrease - we have already seen a fall in the number of bookings this year, although those with larger properties which can accommodate two families, are still filling those all important high season weeks.
There are many reasons why more and more people are looking for long term rentals in Spain: maybe to escape the dreary weather in their home country for six months; sometimes to spend a year or so testing the waters before deciding whether to buy and make a life here; or possibly to look for work in order to relocate permanently.
At popular villa rental companies a steady increase in the number of enquiries about long term rental in Spain over the past eighteen months has been seen – so much so that demand now far outstrips supply.
Many owners are still holding out for the higher incomes they can receive in the summer, wanting only to rent for a longer period between the months of October and March. As the number of holiday properties increase, however, the likelihood of each owner taking enough bookings to cover the entire high season period decreases. Clearly this depends on the quality of the property, but in general this is what we are seeing - especially for two bedroom apartments.
Until now, it has been mainly Spanish owners who prefer long term rentals - guaranteeing themselves a year round income - while British owners, who generally like to use the property themselves, prefer short term holiday lets. Trends are starting to change however, and we are now seeing an increase in foreigners renting out their properties on a long term basis – though, crucially, not enough owners are doing this yet to meet demand.
Property owners are now being encouraged to look at long term rentals as opposed to holiday rentals. Spain is as popular as ever as a holiday destination and is still a good investment if you are thinking of buying to let – but the sheer volume of properties available now for short term holiday lets means that owners may find it difficult to rent out their property for more than six weeks a year. If you have a mortgage to pay, a long term let of your property can give you peace of mind knowing that you have a steady income for a long period.
In addition, if you are struggling to sell your property during these difficult economic times, why not try offering your property for long term rental; accepting an 11 month tenancy will take the pressure off, generate a regular income and give market conditions a chance to stabilise.
Geoff Little is Director of Platinum Villa Rentals