Written by Lesley McEwan Cadizcasa
Wednesday, 11 May 2011
When you buy a holiday property abroad there is always a mental plan and time span for that property. At Cadizcasa we have often heard “We will keep it until the kids are old enough to go on their own holidays then sell”, “We will keep it until we retire then sell” or “We will keep it until we have seen all we want of Spain and then sell”. At one time these were good plans but the world economic crisis has thrown a spanner in the works for many people who bought a holiday home and have reached the end of their 5 or 10 year plan for it. Selling is taking longer than it used to, prices are low and buyers are difficult to find.
The obvious option is to rent the place out and wait for the tide to turn and things to improve but I find a lot of people are really scared of renting long term or doing holiday lets. They tell me horror stories about people who have rented and had problems and how they have been warned by friends about the legal dangers of renting in Spain. Our advice is, If you are thinking of renting your property in the Costa de la Luz, don't listen to stories come and talk it through first with us at Cadizcasa Estate Agents.
The fact is that rental/holiday letting here is not any more difficult or dangerous than renting or letting in the UK providing you get your ducks in a row before you hand over the keys and you take some good professional advice. The majority of clients I meet who have fallen foul when renting or holiday letting have tried to go it alone in to the minefield and ended standing on something not very nice. There is a lot of misinformation about long term rental and holiday letting and while going it alone will save on the pennies it can lead to problems further down the line.
Lets deal with the legal aspect first. It is true that the law in Spain protects the renter and if you allow someone to stay in your property 9 months or more with an ordinary rental contract then they can stay for up to 5 years under certain circumstances but let’s look a bit more closely at the facts. Firstly, you should not be giving a contact of 9 months or more unless you make it a rent to buy contract, drawn up by a qualified solicitor who will have a legal and professional responsibility for the content of the contract. A rent to buy contract does not mean that people have to buy at the end of the contract but it is a mechanism which prevents them staying on in the house after the contract has ended. People say to me "but I don’t want to sell". Well the answer is to make the purchase price in the contract much higher than a normal purchase price for the property. We find that all renters are now aware of this type of contract and expect to be offered it so there should not be any problems in getting people to accept it.
Secondly, the tenant going in to your property is very important. It is the agent´s responsibility to provide a good tenant who they believe can afford to pay the rent every month and you should not be afraid to say what you want regards to tenants. If you want a couple rather than two singles tell the agent or if you would prefer to have older children only - make your feelings known. You also want an agent who will keep in touch with the renters and make the odd visit to the house to ensure that all is well and nothing untoward is taking place in your property. If something does happen then they should be straight on to it and issue a warning letter if necessary. It is a part of my job I do not like but the house owner must be protected and often a short sharp letter can have the desired effect and prevent any further problems.
If you still have plans to use the house yourselves then short term holiday lets might be more suitable. Holiday lets in Chiclana and all over the Costa de la Luz can be very lucrative especially during the months of July and August but the British rental market has declined over the past couple of years due to the poor exchange rate so you must consider holiday let clients from all over the globe. This does raise the problem of dealing with clients who do not speak English and holiday lets can be a very time consuming business as people have a lot of questions about the beaches, the local transport, restaurants etc and up to 35 emails can be exchanged before a client is happy to part with their deposit to book a property. You also have to consider who will clean and prepare the property, who will meet the clients at midnight on a Sunday to show them in to the property, what happens if there are problems like one of the clients having an accident or the water heater giving up the ghost in the middle of a booking? Then there are the more serious considerations such as gas certificates to confirm the safety of the gas installation and to confirm the level of carbon monoxide emissions and the subject of public liabilities insurance to protect you if a client has an accident in the holiday let property. There is a lot to think about and if you do not live in Spain then the best answer is probably to get a professional agent to do it all for you. Like us most good agents not only handle all of these aspects for you but also advertise your property free of charge on their website and affiliated websites plus in their advertising material giving you excellent free targeted marketing for your property.
Keeping your holiday home a few more years may not have been your plan but to sell in a weakened market may not be a good solution and if you can make some effortless money from it while you wait then all the better.
For help and advice on any aspect of renting your property as a holiday let or long term rental please feel free to contact us at Cadizcasa.
MD, Cadizcasa Estate Agents
Contact details for Lesley