If you’re looking for a secure investment that is not cash simply sitting and wasting away in the bank, perhaps property rentals is more your cup of tea. Holiday homes make a great source of income for those willing to put the effort in, plus if you rent on a short term basis you may even have your own holiday home for the summer months when your 9-5 job gets a little too much and you need to rest your feet for a bit!
Purchasing a second home or a buy to let property anywhere can become a fantastic investment, if enough thought, research and work is put into that property. Unless you are willing to put the effort in, purchasing a property as a buy-to-let may be a wasted opportunity. It is important to consider all the risks and ramifications of becoming a homeowner in Spain before you take the plunge. However if you’ve weighed all the pros and cons and you still want to have a go at investing in Spanish property, have a look at these top tips to get you started!
Spain is notorious for its low cost, high aesthetics when it comes to available property. Spain has only recently begun to climb once more on tourism popularity, so property prices are still relatively low. If you want to make a well-assumed investment and don’t mind the amount of work that comes with the purchase of a rental property, it would be a good investment to make to purchase a property in Spain.
Choosing your Location
As the old saying goes ‘it is all about location, location, location’. Certain areas of Spain are far more popular for rental properties than others. While it is a beautiful country, like with any populated area, you’ll get your good area sand your bad areas.
With a wide range of villas and some stunning beaches, the Costa Del Sol, otherwise known as the South Coast of Spain is a fantastic choice. There are a number of properties to choose from, from quaint cottages to marvellous five bedroom mansions located just off the beaten path. Depending on your intended tenants, you may want to look at some of the towns and villages nearby, or if you’re looking for long-term tenants, you’ll want to look at the cities in more detail.
The Costa Blanca is also a great place to rent, as there are two highly populated cities; Alicante and Javea with a rich Spanish history that any tenant would love to become a part of. Plus many properties listed in the Costa Blanca are cheap and are gorgeously decorated among the natural jagged Costa Blanca mountain ranges.
Delegating the Renting of your Property
Are you planning on renting out the property long term or short term? For long term rentals you do not need a special licence to rent the accommodation but it will be liable to Spanish VAT laws. If you are planning on letting out your property to tourists on a short-term rental basis, you will need to ensure that the property has authorisation for tourism use and holiday rentals.
These licences need to be approved by the local authorities; otherwise you may be subject to heavy fines. If you feel you are not up to the task of running your rental property yourself, if is important to delegate to a Spanish estate agent, most of which will speak English and other European languages. They will be able to take care of showing the property to potential tenants and they will supervise the drawing up of the rental contract on your behalf, taking into account both your individual terms and Spanish law.
When it comes to investment, either long term or short term, Spain is certainly one of the best locations worldwide for property investment. With a rise in the levels of tourism, gorgeous weather, beautiful countryside and sights to see, Spain has everything potential holidaymakers could possibly want. By tapping into this potential and buying a holiday home at a low cost, then renovating it, you can easily maximise your investment by renting it out to families during the summer.
However it is also important to remember that property investment, in any form or on any scale, is a big responsibility. You will need to look into the insurance and letting laws in Spain and you will be subject to certain taxes and required to do a certain amount of upkeep on the property in question, unless you hire someone to handle these issues for you. It is all a matter of balance, combined with good money management, but if you do sufficient research, a rental or holiday home can be a fantastic investment.
The post was by Mike James of panorama, Marbella’s longest established real estate agency – celebrating 45 years of property success in 2015.