Have you always dreamt of owning your own Spanish holiday home? Perhaps you’re attracted to the idea of a buy-to-let property that you can visit for your own holidays, and then let to other holiday makers for the rest of the year? Or perhaps you’re simply interested in turning your love of Spain into a lucrative business opportunity? No matter what stage of your journey you’re at, here’s everything you need to know about the current buy-to-let market in Spain, and whether it’s the right choice for you:
The Benefits of Choosing a Buy-to-Let Property
One of the main benefits of choosing to invest in a buy-to-let property is that the rental income potential is considerable. Thanks to platforms such as Air BnB and other popular property letting platforms, more people than ever are choosing to stay in holiday lets rather than hotels.
According to one buyer’s agent, buy to let investors in Spain are currently earning a 6 percent return on letting out their properties for short-term lets.
Top Tips for Investing in Buy-To Let Property
If you choose to, or are thinking about, investing in buy-to-let property then you should consider the following tips to help you make an investment that will be lucrative and work for you in the long term:
- Know What You Want to Achieve
Investing in a buy-to-let property isn’t something that you should undertake on a whim. You should have a plan, and an endgame, in mind: how many short-term tenants would you like to have in your property each year? And what practicalities will that require you look for in the property? The move bedrooms, for example, the more potential rental income but if you invest in a larger property then you will need to ensure you have enough bathroom capacity and that the bathrooms can withstand the intensive use of a large number of visitors: looking at the quality of the boiler, and the sturdiness of the fixtures and fittings, should be a key consideration therefore.
- Can You Refurbish a Property?
The best value properties are those that need a little refurbishment: this is the best way to get a slightly larger property than you might usually be able to afford, at a good price. When you are apartment shopping, look for the “fixer-upper.” This not only will enable you to get a larger apartment at a better price, but you can refurbish it to optimize its long-term rental performance. The way the property looks will play a huge role in the amount of rental interest you will gain. As a general rule, hard-wearing neutral interiors work best in rental properties, but you should also add some high-class ‘statement pieces’ and interesting art work that will make your property stand out when potential holiday letters are searching for property online. Think about your property from the point of view of a holidaymaker: what makes it different? What makes it a great place to stay? Would you want to stay here?
- Understand the Paperwork You’ll Need
You can’t just buy a property and start letting it out without informing the authorities in Spain, but the type and amount of paperwork you will need will vary considerably depending on where in Spain your new property is based. Before you purchase a property with the intention of letting it, you should check the rental laws for your region: you should also remember that these are subject to change. In Barcelona, for example, you can no longer receive an AirBnB license, whilst in Madrid you can, provided you fill out and submit forms called Documento Propiedades Turísticas and Cédula de habitabilidad. Your local town hall will be able to inform you of the paperwork you will need, and you should research this before you invest in a buy-to-let property. If you don’t feel confident in navigating this paperwork yourself, you should seek professional advice to support you throughout the process.
- Will You Use a Property Manager?
Finally, if you’re not living in Spain then managing a rental property in the country from afar could feel like a monumental task. Although a professional property manager will cost you money (anywhere between 10 and 20 percent of your rental income) it could also help to make you money; the right property manager will be able to turn around your property quickly, helping you to maximise the rentals you can take. They can also respond to any queries on home sharing platforms on your behalf, ensuring your responses are always timely. Perhaps most importantly, they can ensure your property is clean, well-maintained and that the satisfaction of your tenants is high, which will lead to good reviews and ultimately repeat business and new renters too.
There are two options when you invest in a buy-to-let property: short term lets or long term lets. A properly managed short term let property will lead to higher rental yields, but the management of this kind of property is much more intensive. You also have to consider the wear and tear that a high-traffic property will receive. There is the potential to earn big whichever option you choose, provided you prepare properly and choose the right property.
Are you looking for a buy-to-let property in Spain? Our locally based property experts can help. We’re perfectly placed to help you find the right home for you, and turn your dreams into a reality.