If you are considering buying a property in Spain to rent, there are a number of things that you should be aware of before jumping straight in. Done correctly, renting a property either long-term or short-term can have some excellent financial benefits. However, if you rush into it then you could find your Spanish renting dream turning sour very soon.

Why Rent In Spain? There are various reasons why you might want to rent a property in Spain. Spain’s enormous tourist industry and year-round sunshine makes it the perfect destination for renting out a short-let holiday home to holidaymakers, as there is the potential to get tenants throughout the year and make the best of your investment. However, you may simply want to rent the property out to tourists during the summer months and live in it for the rest of the year. Whatever purpose you have for renting a property, make sure that you are fully prepared.

Long Term And Short Term If you are considering a long-term rent for your property then this is known as a vivienda. This lasts for a minimum of a year, and the rent will be cheaper as a result. Vivienda contracts can be renewed for up to five years, and you will not be able to increase the rent during this time by anything higher than the rate of inflation. Short-term rents are known as temporadas, and these are generally for holiday lets. However, a temporada can technically last up to 11 months.

Get The Location Right The most important thing for any property that you are planning to rent is the location. Of course, the requirements of the location will depend to an extent upon the market that you wish to rent the property to.

If you are renting to the short-term tourist market, you will want to find a property that is located near to all the major amenities that tourists would require access to, such as supermarkets, restaurants and bars. A place near a beach or a golf course is sure to prove the most popular, and although this will be more expensive you will be able to charge higher rents as a result.

Managing The Property Yourself If you plan to manage the property yourself, you will need to find your own tenants, and the best way to do this is to spread the word. Tell your friends in your home country about it and maybe offer them a reduced rate, then they will tell their friends to help you keep it occupied for as many weeks as possible. The added benefits are that you will know your tenants, meaning you won’t have to worry about the trustworthiness of the people living in your house.

In addition to spreading the word amongst your contacts, you can also advertise in local papers and on internet advertising sites, both in your home country and in Spain.

You will be responsible for answering their questions, fixing anything that breaks and making sure that they are happy, which can create a lot of work. It is therefore only really possible if you live nearby the property.

Letting The Estate Agent Do It For You Alternatively, you can take the hassle out of your investment and leave your property in the capable hands of a holiday management company. This will allow you to live in your own country and not worry too much about the day-to-day running of the property, including collecting rent and making minor repairs.

All that you will have to do is collect the rent in your account, and you won’t have to worry about finding tenants as the company will probably have a much higher likelihood of finding them for you.

Of course, the drawbacks of this will involve less money for you – a typical fee could be up to 40% of the rent plus maintenance costs – and the fact that you will not have much control over the tenants. You will also have to choose your management company carefully, so make sure you look around before making your choice.

Check The Contract Whether you are using the services of a company or you are managing the property yourself, make sure that you have a good contract in place for the tenancy agreement. It is a good idea to hire a property lawyer to write this up for you, which will be an added expense but will be well worth it should any problems arise. You should include a clause whereby a penalty must be paid if they leave within the first year, and you should also require a couple of months’ notice if they decide to leave after the initial contract period.

Deposits, References and Tax As you can never be entirely sure about the person living in your property, make sure that you get a deposit to cover any damages that may arise. It is also a good idea to ask for references and to even run a credit check, especially if they are going to be renting long-term.

Whether you are renting long-term or short-term, you will have to pay tax on your rental income. This is currently 25%, and in the case of long-term rents the responsibility for payment comes down to the tenant, who will take it out of the rent and pay you the rest. You should therefore get proof of payment from the tenant to avoid any problems.

Author: Robert Griggs
Article Source: EzineArticles.com
Provided by: Canada duty rate