If you are thinking of renting out your property in Spain, you wil need to equip your property accordingly and consider carefully how you will obtain and manage bookings.
Get advice on the current Spanish tax implications and those of your country of residence. Tax is payable on income generated and the authorities are looking more closely now at homes owned by non-residents, but you will be able to offset certain costs.
The following advice is in the form of hints and tips for Spanish Property Owners, which we hope will help you avoid some of the pitfalls of renting out your property and enable you to maximise your rental income.
The first decision you need to make is whether you wish to rent out your property on a long term basis or as weekly holiday lets. There are advantages and dis-advantages to both options, which we have highlighted below:
The major advantage of holiday lets is that you have total flexibility to use the property for yourself, family and friends, when you want and to rent out the other weeks to help offset your costs.
The potential rental income for holiday lets is much higher, but there are also significant extra costs and you should not underestimate the difficulties in getting regular bookings.
You will initially need to fully furnish and equip the villa or apartment suitably for the maximum number of guests and you will also need to pay for maintenance work, gardening, key holding services, cleaning and the utility bills ( gas, water & electricity )
If you do not intend to use the property yourself for a long period of time, then a long term rental could be the best solution.
You can choose to rent the property furnished or unfurnished and whether to charge inclusive of bills or not.
The monthly income is significantly less than that which can be charged for holiday lets, but you eliminate most of the ongoing charges associated with weekly lets, and you have a guaranteed regular income
You should seek legal advice and draw up a contract with the tenants, for a mutually acceptable fixed period, with options to review the rent or terminate the contract at the end of this period or alternatively extend the contract for another fixed period.
If you let your property through an Agency consult a solicitor before signing any contract to ensure that you have the same protection as in a private contract.
Typically those who rent properties on a long term rental basis are looking for a regular monthly income, which will meet their mortgage costs and have bought the property either as a long-term capital investment ( looking to achieve an increase in the propery value over a number of years ) or have bought the property as a planned retirement home for the future.
Once you have completed on your property you will have the opportunity to furnish it to your hearts desire and if you are moving to Spain, you will want to spend time looking in various stores and choosing furniture, light fittings and furnishings, etc. and there is no shortage of furniture suppliers in Spain ( Muebles ).
If, however, you have bought your property as an investment to rent out, you will struggle to find both the time and inclination on your visits to Spain.
Choosing the furniture, arranging for delvery and installation can be very stressful, time consuming and expensive especially when you start paying for alternative accommodation, car hire, taking time off work and of course the hassle of buying tools etc.
There is an easier way - If you are equpping your property for rental then the most cost effective solution and convenient way is to use a furniture package company.
We recommend villapac due to their quality furniture, reasonable pricing, you can pick and choose a package (they are not fixed), excellent customer service, supply to all areas of Spain and Portugal and best of all... They have 2 showrooms in the UK!
One in Bolton and the other in Milton Keynes No more hunting around furniture shops in your precious holiday time in Spain. villapac gives you the option of choosing the furniture for your Spanish property on a rainy Saturday back home, or any day of the week. Choose it in UK and leave it up to them to kit your property out so that it's all ready for when you next arrive in Spain.
villapac also has showrooms in Fuengirola, Spain and Vilamoura, Portugal.
villapac provides furniture packages containing everything you are going to need for your new home, from the chopping board to the bed linen to all the furniture and they also deliver and install everything for you, so you don't have to lift a finger - what a way to enjoy your new home and all at unbeatable prices! Prices range from £4499 for a standard package right through to a 3 bedroom deluxe package for under £10,000.
Each package is available in a number of distinctive finishes and can be arranged in a variety of different settings. We give you a detailed floor plan so you can visualise the layout of your new home before you move in.
To find out more about villapac Funiture Packages and obtain a free quotation on a furniture package please click on the link below below and one of villapacs' helpful staff will contact you
The Spanish tax system is based on self assessment, which means that you are required to:
* Obtain the right tax form
* Calculate the tax due
* Complete the form
* Submit to the Spanish tax office
* Pay the tax!
Many non-resident property owners remain completely ignorant of their tax obligations - until they come to sell their properties. This then prompts the authorities into action, which can lead to some nasty surprises!
Although there are accountants, lawyers and gestors in Spain, and a number of overseas specialist tax consultancies in London, Numerological is the only UK based company providing a specialist tax service for non-residents with properties in Spain.
If you would like a Free Spanish Tax Guide and to receive details of how Numerological can help you meet your Spanish Tax obligations, just click on the link below:
It is important to ensure that your holiday home and contents are properly insured.
Checking the small print is difficult at the best of times and almost impossible, when your policy is written in Spanish and making a claim is more difficult, when staff on the help desk do not speak or understand English.
Many policies are also unsuitable for rental properties as they may not cover buildings, which are left empty for periods of time or have strict rules for regular inspections if unoccupied.
For complete peace of mind and comprehensive cover at competitive prices we recommend that you insure your property with Intasure
Key Benefits of Intasure policies
* Your cover is uderwritten by one of the world's leading insurers - LLoyd's of London
* Fully comprehensive cover
* Your property is covered whether occupied or unoccupied
* Your property is covered if let short term or long term
* Competitive rates
* No claims discounts
* Excess from just £50
* All policy documents are in English and if you have an enquiry or claim you talk to a UK based, English speaking support team
* We cover the cost of emergency travel and accommodation, and temporary accommodation following a claim
* Policy covers swimming pool as well as buildings
* Policy covers public liability of £5 million in regard to buildings and contents(traditionally, most policies provide minimal public liability cover)
* Covers loss of rent following a claim
* Wider cover than most standard buildings and contents policies
* Protects your valuable contents - New for old
As an owner of a property in Spain make sure you get the right insurance cover, designed specifically for you and apply online now to Intasure.
If you are not living in Spain, it is important to leave a set of keys with someone you trust or a reputable property management company.
Be aware of the risks associated with this and keep a close eye on the situation to ensure that your trust is not abused
If you are renting your home out to holidaymakers, you will need to ensure that the property is cleaned between rentals and that linen is changed and washed.
Whilst there are plenty of companies providing this service, the quality is very variable and they can often be overstetched in season. It is often better to entrust this to a neighbour who may be grateful for the extra cash.
Remember that you are looking for your guests to return and also to recommend you to other holidaymakers and first impressions are the most important.
Plants and weeds flourish in the Mediterranean climate and hedges can become overgrown in a matter of a few weeks. So it is important to have a low maintenance garden if you are planning to let your property out or be prepared to pay for someone to regularly cut back untidy shrubs and hedges.
If you have a large garden, it is also worth considering automatic sprinklers or irrigation systems.
Villas with private pools attract premium rental rates, but you will need to make arrangements for regular pool maintenance during the season and ensure that pools and terraces are clean and safe.
Most areas of Spain do not have mains gas supply and rely on bottled gas, which can be delivered or purchased from garages, etc.
If your property uses bottled gas for heating or cooking, you will need to make arrangements for bottles to be checked and replaced where necessary.
Inevitably minor repairs and maintenance will be required from time to time and you will need to arrange for this to be carried out and paid for.
Try and locate a local handyman, before these situations arise, who can replace bulbs, fuses, fix leaks, touch up paintwork and carry out minor repairs, etc. and organise professional tradesmen, on your behalf, to carry out other work where necessary. Property management companies can do this for you, but the costs are high.
If you have bought a new property remedial works may be necessary and you will need someone you trust to let the builders in, supervise the work and ensure that the property is locked up after they have left. With older properties you may need someone to source local tradesman for plumbing or electrical works etc.
Do not underestimate the work involved in obtaining regular bookings for your holiday home and when you do get bookings ensure that you do everything you can to make your guests holiday enjoyable. You need guests to come back, recommend your accomodation to others and leave favourable comments in any internet based Guest Books.
* CostaDreams offers Free advertising to private owners
* Relatives, friends and work colleagues - This is probably one of the easiest sources of bookings, but friends and family will expect a discount. We suggest that you set an advertised rate that you charge through booking agencies and that you then offer a generous discount on this rate. If colleagues feel that they are getting a bargain word will quickly spread.
* Referrals from other holiday home owners - Get to know owners with similar properties and get a mutual agreement to pass on enquiries, for weeks where your property is not available.
* Advertising - Unless your property is unique, then advertising generally generates very few enquiries. We recommend that you only use free advertising and we have outlined a number of Advertising methods below.
* Booking agencies - Booking agencies can provide a valuable source of bookings and can fill those weeks that you are struggling to fill with private bookings See our tips on Booking Agencies below.
Most adverts, whether they are in a newspaper, glossy magazine or on the internet, generate very few enquiries and we recommend, therefore, that you take advantage of all opportunities for free advertising, e.g.
* Noticeboards at work
* Staff websites
* Forums & Blogs
* Customer Notice Boards at your local supermarket and shops
Do not pay for advertising, except on a "payment on results" basis - be prepared to pay a commission for bookings received.
Booking Agencies can provide valuable extra income, but do not rely exclusively on their services and do not enter into any exclsive arrangements. You need to be free to accept bookings from any and all sources.
Do make sure that you keep your booking agencies informed of changes in availability and wherever, possible, use only one Availability Calendar which is accessible to all.
For maximum exposure of your property we recommend that you also use the services of RentalSystems.com, who operate the VillaRenters.com site.
Rental Systems provide sophisticated software to manage the booking process, free of charge, and you can continue to accept private bookings. A commission is charged only on the additional bookings you receive through their website.
A major benefit to both you and your customers, which will set you apart from other property owners, is the ability to accept credit card payments. Why not JOIN NOW , you have nothing to lose and everything to gain !!