Renting out your property in the new regulatory environment
People have been successfully and lucratively renting out their holiday homes for many years now, but the latest set of regulations both help protect owners’ rights and make it more difficult to manage home rentals without the support of specialised professionals.
A number of factors have colluded to make the Spanish real estate market a challenging one – for locals. Many, especially younger people, are being priced out of a market where shortage of housing stock is a serious problem that restricts the choice of properties in many locations as well as driving both rental and purchase prices beyond the means of a large percentage of the population.
Many can’t get on to the property ladder and live with their parents well into their thirties. This shortage of homes is due to a number of factors:
- The scarcity of affordable housing built over the past 30 years
- The influx of immigrants (500.000 – 1.000.000 per year since the turn of the century)
- The presence of foreign buyers that account for up to 15% of all property purchases in Spain and whose greater economic power helps to push prices up
- The acquisition of a large number of properties by private individuals and funds for use as short term holiday rental accommodation
The lack of action on the part of authorities over the past two decades – for instance in the form of proper residential/rental zoning restrictions – has allowed the situation to get out of hand. Now rental prices have also risen to a level where local residents and foreign workers can no longer compete, and prices have risen to the point where apartments are shared between different individuals and sometimes even couples or families.
In an attempt to deal with this situation, as well as the occupation of homes by so-called ‘okupas’ in the wake of the financial crisis of 2008, the authorities both regional and national have enacted a series of laws and regulations that protect homeowners by streamlining and speeding up the process of evicting illegal occupants, while on the other hand making the management of holiday rental homes more complicated.
Besides having to request a tourist license that allows them to rent out their home to tourists for short stays, homeowners will also have to meet official requirements in terms of the equipping of the property, provide accounts and deal with the possibility that the community of owners votes against short stay guests and bans holiday rentals altogether.
All of this makes it increasingly difficult and labour intensive to rent out your property yourself, especially if you live abroad and can’t always stay up to date with Spanish and regional Andalusian regulations, and for this reason a growing number of homeowner are turning to professional companies that the know-how, resources and dedicated operational setup to navigate the process securely as well as offering safe vetting of guests, collecting and returning of deposits, effective channel marketing, cleaning, maintenance and concierge services, as well as property inspections, furniture replacements and much more, all aimed at providing a five-star service to guests and optimal returns combined with convenience for homeowners.