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Rental income on Spanish holiday home

Rental income on Spanish holiday home

Old Sep 5th 2020, 11:14 pm
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Default Rental income on Spanish holiday home

Hi guys,
im now in a position where I can buy a holiday home in Spain After finishing a mortgage on a second property I rent out in the uk, it currently brings me in 6k a year
I’ve got a budget of around 150k and am looking around Andalucia for a 2/3 bed 2 Bathroom property close to all amenities and walking distance to the beach etc
ive been in touch with various estate agents and am getting told by some that I could possibly get a return of upto 25000 euros which seems to good to be true, can anybody tell me if they know anyone that gets that or is the figure a lot lower, as long as it can get me more than it gets me in the uk I will go ahead and maybe start living the dream,
thanks guys.
dave.
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Old Sep 5th 2020, 11:18 pm
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Default Re: Rental income on Spanish holiday home

In this Covid and recessionary world, any figure is just speculation. What I do know is that in a place like Nerja, popular with expats from UK and Scandinavia, the demand for holiday lets has gone down and many owners are converting them to long-term rentals, for around 500 to 650 euro/month for one to two-bedroom properties. This is a lot less than holiday lets, when in peak summer time you can get that much in a week.
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Old Sep 5th 2020, 11:43 pm
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Default Re: Rental income on Spanish holiday home

Originally Posted by Daveyboywill
Hi guys,
im now in a position where I can buy a holiday home in Spain After finishing a mortgage on a second property I rent out in the uk, it currently brings me in 6k a year
I’ve got a budget of around 150k and am looking around Andalucia for a 2/3 bed 2 Bathroom property close to all amenities and walking distance to the beach etc
ive been in touch with various estate agents and am getting told by some that I could possibly get a return of upto 25000 euros which seems to good to be true, can anybody tell me if they know anyone that gets that or is the figure a lot lower, as long as it can get me more than it gets me in the uk I will go ahead and maybe start living the dream,
thanks guys.
dave.
Given the uncertainty of just what is going to happen after Brexit, I would hold off. If Spain requires visitors to get a visa then they will not be so keen to just hop on a flight to get to Spain, same with other countries, and there may well be a lot more people selling up.
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Old Sep 6th 2020, 12:23 am
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Default Re: Rental income on Spanish holiday home

A 25000€ forecast equates to around 16% ROI. Way above all the published stats and they were pre-virus. Beyond optimistic IMO.

Suggest you also research the latest legal requirements involving licences etc. and your tax situation post brexit.

Buy hey nothing ventured...
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Old Sep 6th 2020, 1:07 am
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Default Re: Rental income on Spanish holiday home

That is a ridiculously ambitious ROI.

On a budget of 150K (minus purchase fees), your property might achieve 500+ euros per week for a holiday let in high season, zero chance in low season.

Who will manage this investment on your behalf? They will want paid before you make any profit. I would suggest you buy another UK property and use that income to fund living the dream.
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Old Sep 6th 2020, 1:47 am
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Default Re: Rental income on Spanish holiday home

Are you saying that someone is suggesting that you can buy a property for 150K ( well less if you are counting 10% costs) and get a return of 25,000? You would need to be renting practically all year at over 500 a week! Your estate agent will tell you anything for a sale but I think they mean you might get 500 a week SOME weeks in the summer but not ALL weeks of year.
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Old Sep 6th 2020, 1:55 am
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Default Re: Rental income on Spanish holiday home

Plus ( maybe your estate agent didn't tell you) but now in Spain you have to register any rental property and submit accounts quarterly which is then taxed in Spain. Not only that but someone needs to physically manage the property and they also charge. Finally many areas are bringing in new laws to prevent renting as it is so commonplace that there are no real properties left for workers.
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Old Sep 6th 2020, 2:44 am
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Default Re: Rental income on Spanish holiday home

Originally Posted by Chipmonk
Plus ( maybe your estate agent didn't tell you) but now in Spain you have to register any rental property and submit accounts quarterly which is then taxed in Spain. Not only that but someone needs to physically manage the property and they also charge. Finally many areas are bringing in new laws to prevent renting as it is so commonplace that there are no real properties left for workers.
Plus you need a tourist licence which requires quite an investment upfront.
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Old Sep 6th 2020, 4:43 am
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Default Re: Rental income on Spanish holiday home

Plus if you do a long term rental and the tenants don´t pay, it can take years to get them out.

I used to rent out my apartment in London......even tenants paying 1300 a month for a one bedroom property never took care of the place. Some people live like pigs and I had to have the whole place repainted after one year.

I would never rent out a place I own in Spain....especially in Barcelona where the notorious
Ada Colau as Mayor is on the side of renters who don´t pay. Indeed she was once one herself.
A friend of mine here had horrendous problems with a tenant. He stopped paying after the first month and it took 2 years to get him out....plus my friend had to pay for the water and electricity for the whole 2 years. It is illegal to get utility services cut-off if there is someone living in the place.
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Old Sep 6th 2020, 5:21 am
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Default Re: Rental income on Spanish holiday home

Originally Posted by Joppa
In this Covid and recessionary world, any figure is just speculation. What I do know is that in a place like Nerja, popular with expats from UK and Scandinavia, the demand for holiday lets has gone down and many owners are converting them to long-term rentals, for around 500 to 650 euro/month for one to two-bedroom properties. This is a lot less than holiday lets, when in peak summer time you can get that much in a week.
thank you for the reply
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Old Sep 6th 2020, 6:16 am
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Default Re: Rental income on Spanish holiday home

Ok,thank you
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