Spain has for many years topped the poll of places for European nationals to buy a property. The weather and the stress free way of life are large contributing factors, but with such a great demand for holiday rentals in Spain new homeowners are also seeing an investment opportunity when buying a second home in Spain. Due to the Spanish house prices having dropped considerably in the last years, now is the time to seriously start considering buying a property to rent out in Spain.
Costa del Sol has a large demand for both short term holiday rentals and long term rentals, and the demand is increasing each year. 70% of foreign holiday homeowners in Spain choose to rent out their property when not using it themselves. Out of that percentage more than half rent out on a serious basis, having bought the property as an investment to start a rental business creating an additional income and covering yearly property costs.
A recent study done by TripAdvisor states that a total of 68% of their users have used a holiday home and preferred to do so as they preferred the freedom offered by a home and that it offers the possibility to save money by cooking at home. A Rightmove report states that Spain is the choice of country for Brits when buying a property abroad for investments and holidays.
There are a few important points to take into consideration when thinking of investing in a property in Spain to then rent out. After all, the point is to secure bookings when you are not using the property yourself. So how to go about it?
Target Group – Which target groups will you rent out to?
There are many different types of holidaymakers, and by determining your specific audience you will achieve the best results for your rental business. When you have a target group of tenants both furnishing your property and deciding on the location is to be taken into consideration. Different target groups can be: families with children, groups without children, groups with children, young or old couples with no children, small families, golfers.
Location – Location is the key factor for holidaymakers when deciding on specific rental
When looking to buy to a holiday home the most important aspect is to find the dream location that you wish to spend your holidays at. However if you are seriously considering renting out – and getting bookings – then there are certain aspects that should be taken into account about the location of your property.
Beach – Most visitors to the Costa del Sol come to enjoy the beautiful weather and the lovely beaches along the coast. For this reason a holiday home located within short distance to the beach will always be in great demand for any group of holidaymakers. This doesn’t necessarily mean that the property needs to be located beachfront, but that visitors can walk to the beach without having to rely on a car at all times.
Amenities – Depending on your target group of tenants, close proximity to amenities might be high on their list. Families with children and young/older couples tend to prefer to be close to amenities such as supermarkets, restaurants, pharmacies, and cafes. Being close to amenities will be a bonus for your holiday rental success.
Airport – Distance to the airport and transportation possibilities to/from the airport should also be reconsidered. Costa del Sol is easily accessible from Malaga airport (AGP) and there is also the option to fly to Gibraltar airport (GIB), however if you are looking to buy in other parts of Spain keep in mind the airport closest to you with international arrivals and also the distance to your property from the airport.
Remember that not all holidaymakers choose to rent a car on their holiday.
Furnishing your property for your target group
If you would like to run a serious rental business and achieve happy repeat customers it is important that your property is furnished up to standards.
Valuable tips when furnishing your property:
- If you are targeting families with children, make sure your property is child friendly and offers extra features such as baby bassinets, high chairs, DVD player, games, fenced/covered pool
- Furnish your property in neutral colors that gives an inviting clean and clutter free appearance.
- Do not over furnish – the basics furniture is all that is needed
- Take away personal objects
- Equip the property for the advertised number of renters. If your property accommodates 5 people, there should be seating (inside and outside), cups, plates, cutlery, towels etc for 5 people. May seem obvious, but often it’s not done!
- Internet connection – nowadays the majority of clients will only rent if there is Wi-Fi
- AC – in the peak summer seasons it is very difficult to rent out a property without Air conditioning so make sure your AC is up and running!
- Leave a Welcome note and an area guide for your clients – it’s the small things that make a difference!
Rental prices vary depending on the location and type of property and the facilities that you offer. Contact us for more information on current rental prices for different areas/properties.
So the property is bought and furnished. How to proceed?
Some homeowners choose to take care of the bookings themselves even though they are not living in Spain. To achieve good results this requires time and dedication. One of the most important aspects is the marketing side, making sure possible holidaymakers find your property. Nowadays the most common marketing strategy is to advertise your property on an online holiday rental portal for a yearly fee. Some popular sites are: HomeAway and HolidayLettings.
If you decide to manage your holiday rental while living in another country it is important to remember that you need to organize cleaning, hand over and collection of keys, and have somebody in the area that can be contacted in case of emergency (clients looses the keys, problems with air conditioning etc).
For some homeowners it can be a great inconvenience to manage all above aspects of bookings and therefore choose a local property management team to deal with all the aspects of the rentals for a yearly fee.
Hacienda Estates has a specialized property management team that has been working on the Costa del Sol for the past 15 years focusing on holiday apartment rentals, holiday villa rentals, short term property rentals and long term property rentals in the surrounding Marbella area. Our property management team will take charge of the whole rental process. Key areas that we focus on are: marketing, booking contracts, cleaning, check-in/check-out, handling of deposits, managing inventories, dealing with the utility companies, community charges and authorities when homeowner is not Spain. For more information about our property management services please contact us.
So if you are considering buying a property to rent out on the Costa del Sol, then we at Hacienda Estates will happily advise you on some of the best buys available right now on the Spanish market. Our mission is to find you the perfect investment on the Costa del Sol taking your preferences and necessities into account. Please contact us on firstname.lastname@example.org if you have any questions or doubts about buying to rent out on the Costa del Sol.