Long term letting
 

Hello,

We have the opportunity to purchase the appartment next door to some UK friends who have a holiday home in Spain in Valencia province. We aren't in a position to reside in Spain just yet, or even to use it on a frequent basis, although we hope to in future.

Would it be possible to purchase and subsequently let on a long term lease, for perhaps 3 or 4 years? Would there be any downsides to this, such as ever getting the property back, or punative taxes as a non-resident landlord over the period.

I'm aware that Spain is becoming more socialist and, spurred on by political rhetoric, the authorities have an increasingly cavalier attitude to property rights.

kind regards

Re: Long term letting
 

Obviously it's doable but Spain and renting is not as easy as you may think. People not paying rent is very common as they have good legal protection. That and the fact that you will need someone to check up on things makes it risky. Plus if you rent you won't have access to it for years by which time it's a bit of a chain round your neck. There will be plenty of opportunities in the future so I would wait.

Re: Long term letting
 

Probably good advice thanks. Agreed it seems a lot less investable than it used to be whilst the political risks wash through over the next 2 years.

Hopefully (for some) that means lower prices in future, whilst retaining ones funds for growth in other assets over the interim. Currency risk being the one to watch.

Re: Long term letting
 

That is definitely good advice but I would say watch this space... The Sanchez coalition government is close to collapse and they can't pass any legislation. It's highly unlikely they will last another two years and it's highly unlikely Spain will elect another socialist/communist government into power. It's mostly the communists who are responsible for the dreadful property laws but PSOE are not much better. PP and Junts managed to get some legislation through this year which gives property owners more rights with squatters. I'm a bit hazy on that but I think it's still going through and that is the general direction of travel.

If the apartment is exactly what you are looking for and a unique opportunity ie next door to your friends, I would buy it now and ask your friends to keep an eye on it for you. You can use it for holidays in the meantime and offer it to trusted friends and family to use. Obviously this is only viable if you can afford it but it's worth considering.

Re: Long term letting
 

Long term Tennants have many, many rights nowadays and if you get good tenants who stick to the rules and pay rent, etc on time then it would be very difficult to force them to vacate the property. After all, it has become their home!!.....

Steve

Re: Long term letting
 

Squatting laws have been introduced to protect property owners from squatters, making it much quicker for the legal process to remove them, but there is now a new menace - Inquiokupación - This is where legal tenants just stop paying the rent and it then becomes a real problem to evict them. Stringent vetting is essential, credit and criminal checks and proof of income etc, but even this may not be enough. Its one of the main reasons that it has become so difficult to find a long term rental.

Re: Long term letting
 

There was a recent local example of exactly this situation. A property owner at wits end with tenants who were six months in arrears with rent, kept promising to pay next week but never happened, promised to meet landlord then cancelled at last minute. The tenants were the owners of one of the most popular restaurants in our area and on the face of it a very nice young family. Were subletting to their waiting staff and generally not looking after the place. It got very public and unpleasant - unsure of the outcome.

Re: Long term letting
 

I believe, well it was when we were renting in Spain that 'long term rentals' were only for 11 months as if you did have one for 12 months, then you were entitled to continue to rent and couldn't be evicted

Re: Long term letting
 

As your friends only use their place as a holiday home (as you say) they cannot keep a good eye out for you all the time ?
There have been a number of horror threads on here over the past few years re-letting out and others regarding squatters.
Why risk your capital on such an unsafe option when there is Gold & Coin that is a great deal safer. (You did mention about this concern)

Re: Long term letting
 

Hi
Just my ten penneth, i have a holiday home which I have had for years. Squatters have become a much bigger issue over the last ten years. I leave mine empty obviously for 6 months a year, and nowadays I do feel vulnerable. I have cameras but I am aware I am a target, which when people ask “would you buy in Spain now as a holiday home?” I usually say no I wouldn’t, the cost of the property, 6 months only, risk of squatters etc

read a famous post on here from a poor guy whose property was taken by the tenant it went on for years!

My nugget of info is my very good friend in Spain, lives in a 2 bed flat in my area, which is coastal. The rental prices have gone through the roof and demand is high, her rent is low and she knows it. In other words she knows it could be put up 25% to go to market rate at any point. When asked what would she do, the reply is not “move inland” it is Squat, she would buy herself years more in occupation.

What would I do if I was you? If you are intent on buying it, and your friends would watch over it, then rent on the QT to U.K. people you trust. Everyone will ask you when you buy it, if they can rent it. Ask them for cash. There are issues with this as new laws may prevent this (block permission etc) but as long as they are not noisy stag and hens etc you may get away with it!

best of luck

al

Re: Long term letting
 

Good idea about renting to family and friends and even friends of friends on the quiet. There's no law against letting friends and family use your apartment and you can take cash.

For the OP this is a bit of a one off opportunity in a place they obviously know and like. Hopefully there will be a change in government in Spain soon and the laws on evictions, squatting etc will change so that is something to consider.

As someone who splits their time between Spain and Portugal, I have to say I would think twice about buying in Spain if things don't change pretty soon. The property laws are ridiculous and Portugal has far fewer problems on that front so now I would probably recommend Portugal over Spain and I definitely would if Sanchez gets into power again.

Re: Long term letting
 

Re: Long term letting
 

If you can't even safety let friends and family stay in the apartment then it really is a communist police state.

My revised advice to the OP is don't do it unless you are happy to have the place empty for the the entire time you are not using it and you are happy to accept that you can never let family and friends stay there.

Re: Long term letting
 

If various different people use the place it would be assumed that the owner is gaining an income from the property. In the case of an apartment it may well be against the rules of the building to be sub-letting it out. There are many, many ways that allowing others to use the property can be fraught with problems. The OP will need to weigh up how cost effective owning a place is. Non-resident tax would also need to be factored in.

Nothing to do with "communist police state", every country has rules on owning, renting out, taxes etc and each group of apartments will have their own rules too so it is not a straightforward question that anyone can answer easily or with any certainty

Rosemary

Re: Long term letting
 

Might not be any law but taking cash and not declaring it amounts to Fraud,
The other consideration is the flat will have a community, has the OP checked if sub letting (short or even long term is actually allowed?)
In our community holiday lets are forbidden and anyone who wants to rent long term has to get permission from the community.
We had an owner apply and get a tourist licence until someone complained and the council revoked it (they should not have given it in the first place) but the owner of the flat is 'friends' with our current mayor.
Short term and holiday lets are not allowed in our buildings due to the insurances we have.

I thought it was also against forum rules to suggest unlawful practices.