How To Earn A Living With
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Rental properties can basically be divided into three categories:
- holiday lets (click on the ad. above)
- short-term rentals of less than a year
- long-term rentals of one to five years.
If on the other hand you’re not a full-time resident or simply haven’t the time, you may want to hand over your rental property to a property management company. Here on the coast you can quite easily find a good, professional agent specializing in holiday lets. Their rates are reasonable and on average they charge around 15% of the rental price.
They will provide all the usual services plus some extra touches, if requested, such as fresh flowers, toiletries, and a welcome pack of groceries. They can even prebook tee-off times at the local golf course as well as paying the rental money into your bank account. A professional agent will even prepare your yearly tax declaration should you wish.
There is also a huge demand for short-term rental properties for mainly two types of client. First, new residents to Malaga who are looking to make their home here but who need somewhere to hang their hat before starting their property search .
The other big pool of clients is the thousands of retired northern Europeans who come here year after year to escape the icy winters of their home country to enjoy a few months in the mild, spring-like temperatures of the Costa del Sol.
These are excellent customers, who, if attended well will come back faithfully again and again. This type of client allows the rental property to be vacant in July to September when summer visitors are willing to pay much higher prices for accommodation and of course, you can take advantage here and give your rental income a nice boost.
But, if you’re looking for a no-brainer and want a rental that you can just forget about then a long-term rental will bring in a reasonable income without much effort on your part.
The secret is to prequalify your clients well. Ask for personal and bank references and then have your lawyer (see our page on property professionals )draw up the appropriate rental property contract.
For rental properties of less than a year you’ll need a short-term contract (contrato de arrendamiento de temporada) and a rental of between one and five years requires a long-term contract (contrato de arrendamiento de vivienda).
The inventory should be attached to the contract and should be accurate with regards to contents and the state of the contents of the property. The home owner will ask for a deposit of one or two month’s rent to guarantee the property will be returned in good condition.
Nine times out of ten all goes well and home owner and tenant are happy with the rental property. But, very occasionally it happens that the tenant stops paying rent for whatever reason and the landlord has to start eviction proceedings. This process could take some time and the home owner may end up out-of-pocket.
To avoid any loss of income there is insurance that you can take out to cover property damage and loss of rental income. This costs about 2.5% of the annual rental and seems a very small price to pay for peace of mind.
So, to sum up … once again in case you want to earn a living with rental properties… for holiday lets, search out a competent management company … and for longer lets, qualify your people well, have your lawyer draw up the appropriate contract and take out proper insurance.
Once that’s all done, then you can relax, sit back... and watch the money roll in!
Read more about property professionals you may need for rental properties
