Marlovians

Hello, we are moving from the UK to Javea/Moraira in October and are considering buying a couple of holiday apartments or a villa to let for income. Does anyone have any experience of this?
We are wondering about the yield we can realistically expect, as well as the length of the letting season, what type of property lets most reliably, and whether the market is flooded with holiday properties or whether it is likely we could expect a couple of well-maintained properties in a good location to let for most of the year - short lets in the summer and perhaps longer term lets in the winter.
Any advice and comments would be very welcome.
Thanks!

spainrico

I hear Airbnb and the like has dramatically boosted the holiday rental market in many areas to the detriment of the long-term rental market. So this type of investment can be very good news but you need to do local research you might closer to Alicante (and the airport) is a better prospect.

Rosemary

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missile

I would suggest you need to think this through carefully. Do you have any previous experience? From your questions it would appear you are new to BuyToLet?

BTL is not easy money and there are serious risks to catch the newbie investor which you may not have considered. If you are non resident in Spain, these risks will be compounded. The only person guaranteed to make a profit will be your agent. You might want to read previous threads on this forum and/or join one of the LandLord forums.

It might be safer for your first BTL to consider the UK?

Marlovians

Thanks for your replies.
We’ve got experience in having buy to lets in the UK for long term tenants, but not for holiday lets, nor in Spain hence our questions about letting holiday properties there. We’d considered continuing with BTLs in the UK but it seems potentially more practical to have our rental properties local to us in Spain. Thoughts?

MikeJ

Don't forget that you must have a licence now. It may be wise to find out the local licencing conditions and what is required for a rental property and add them to your buying parameters.

You do need to be aware that renters tend to have much less respect for your property and there have been horror stories about "squatters" or "non-payers and stay put" so you need to be very careful about choosing tenants. Airbnb sounds like a good bet as long as it is done correctly as both the renter and rentee are supposed to be vetted and Airbnb take care of communication and payment.

dougal03

For many years I rented out an apartment but it was long term & I was resident nearby.Don't be led by either your experience in UK or by what you see on TV programmes like"Life in the sun".It is now closely monitored & don't forget you will pay a good bit of the rental to the Spanish Govn.Perhaps you are looking for an income whereas I was only needing to cover any costs as my property was bought as an inheritance for a family member later.Even though I had tenants from various nationalities & had few problems there have been lots of landlords who could tell you horror stories.I am sure that that is true also in UK.

missile

I did not appreciate you had BTL experience. Short term rentals are a little more onerous, in that you will have more work to change beds etc. You might want to check properties currently available e.g. on Airbnb to give you some idea of rates charged and occupancy achieved by others.

Some can make a very good income, while others seem to struggle. A near neighbour I know started a B&B and had very little interest. Another friend makes a good living from his Property Management & Letting Company.

bob_bob

You'll get a higher yield from UK properties. Its a buyers market in Spain which in turn it means could take years to sell the bricks you bought.

missile

We have had some real idiots renting our UK properties.
++++
Students who broke the bed, painted the walls red and ceilings brown
We had to replace all the switches and fittings which had been painted over. You would not believe how many coats of magnolia and white emulsion it took to redecorate.
++++
Got a phone call in Spain from another tenant on a Friday night,
"the central heating is not working".
"please contact the letting agent"
"it's Easter weekend and they are closed until Tuesday"
I managed to get a tradesman on an emergency call out
Turned out the fukcwit had messed with timer and could not follow the instruction book I had provided to reset it.
Did tenant pay for the call out, ...... yeah right

SteveDW

I sold my last investment property a couple of years ago and put the money into a low cost index fund. I've had good returns since, no more f..kwit tenants, and can sleep at nights without worrying about the next phone call from the agent, or whether I have void periods. I'm a buy and hold investor rather than a trader, and I'm happy to get on with life and basically forget about my investments. With all the new regulations and tax implications, I just want the simple life and safe investments. (Yes, equities can go down, but in the long term they outperform most property markets).

Smithy73

Yes we do this further north from you. You ask a lot of questions, which can't be answered accurately here I would guess.

I would be interested in how close your rentals are to where you live - If you give the management and change overs out to someone else, this could cost you 30-40% of the rentals - So having something local and managing it yourself is key, even if you hire someone to clean etc

The Spanish holiday session is short - July and August, but Javea/Moraira are popular expat (northern european) holiday areas.. you probably want to include Denia and Altea as well. You should be able to do lets from May through to September and possibly April-October... But June/July/August will be your peak time. As for the rest of the year, it depends on your pricing and the competition. I am guessing that these areas have a fair amount of holiday lets on AirBnB and OwnersDirect etc.

As for yield, this isn't like a long term rental in the UK. I have friends in Sitges (near Barcelona) that make €25000 (short term holiday rentals only) a year on their 3 bedroom apartment with an investment of €430000 - This in Spanish terms is seen as very good. So all depends on what you buy and its location.

Apartments very close to the beach and in town centres are popular for obvious reasons.... I would stay clear of properties that are on urbanisations on the edge of town, neither particularly close to the beach or anywhere else in my opinion - they are fine to live in, but not for holiday rentals.

Villas can be very popular also - I would look for something special... surroundings within areas of natural beauty (not on built up urbanisations) an easy drive (10-15mins max) to the beach and with some amenities close enough by.

It is a completely different person that wants a villa to an apartment by the beach.

Hillside villas look lovely with stunning views, but being on the side of a hill they can be isolated with no amenities near by... With these kind of properties you don't get returning guests.

Back to an apartment in town, close to the beach (50 to 100metres) you have instant appeal and I would guess you can rent it out for a period much greater than just July and August.

Villas can be slow burners... You get families, who if they like the place will return year after year and you can build up business in this way.
I did a very quick search on AirBnB and Kyero and the most popular places for Villas in the Javea area for AirBnB are based near Montgó Nature Park.

The average 3 bedroom villa rents for €1400-1500 a week and you may get 10-12 weeks in the first year... Competition is clearly strong with a 160 Villas available to rent in the Javea area.

Marlovians

Thanks to everyone for your valuable advice and for sharing your very mixed experiences. Much appreciated. One of the challenges is to get the balance right so that the level of income feels like a reasonable - or good - recompense for the effort and uncertainty involved. Steve DW as you've pointed out, there are other ways of investing which are less hands-on which achieve good results. Lots to think about.

Eric S

One other idea: If you can find a place in an area attractive to tourists, but also near a university, you could potentially let it to students for Sept to June and then do short term holiday lets in July and August.

- Eric S.

Longlegpete

We have a villa in the Moraira area that we let out in the summer, well June, July, August and first half of September, we use an Agent which we trust and have been with for the last 8 years but we do lose 40% of our earnings but it's nearer 30% if you allow for tax .

The occupancy rate is very good, we normally end up with 2 or so weeks unoccupied and that's normally because no one wants a week on it's own, most are 3 week booking.

The return for the outlay is very good, we have property in the UK we rent and for the same outlay in capital the returns from the Spanish house is the same as the UK but that's a years rental in UK as opposed to 3 1/2 months in Spain which leaves us to use the house on and off for the rest of the time.

The regulations are getting tighter all the time so you now need to register with the local authorities and of course pay taxes etc, It's also looking like tax will be going up from 19% to 24% and a removal of any allowances as a result of Brexit, if this is the case it will make it less attractive for none residents like us