Renting out your property

Renting out your property in Spain can be a great way to generate additional income, but it is important to understand the legal requirements and regulations that apply.

One of the first things you will need to do is register your property with the local authorities, this will involve paying the corresponding taxes and obtaining a tourist licence, this process can take some time and it is recommendable to hire a lawyer or a property management company to assist you.

Additionally, you will need to ensure that the property meets all necessary safety and health standards, such as smoke alarms, fire extinguishers, and emergency lighting. It is also essential to have a good quality inventory of the property, including all furniture and appliances, and to keep it updated.

When it comes to advertising your property and finding tenants, there are several options available, such as online platforms like Airbnb, Booking.com, and HomeAway, or using a local property management company. It is important to set a competitive price for your property and to have good quality photos and descriptions to attract potential tenants.

It is also important to have a good rental contract, which outlines the terms and conditions of the rental, including the rental period, the deposit, and the responsibilities of the tenant and landlord. It is also advisable to have a damage deposit, which will be returned to the tenant at the end of the rental period, providing that the property is left in good condition.

It is also important to keep in mind that as a landlord, you will be responsible for paying taxes on the rental income, and for ensuring that the property is in compliance with local regulations. It is recommended to consult with a tax expert or a lawyer for more information about taxes and regulations when renting out a property in Spain.

In summary, renting out your property in Spain can be a good way to generate additional income, but it is important to understand the legal requirements and regulations, to register your property with the local authorities, ensure that the property meets safety and health standards and have a good rental contract. It is also important to pay taxes on the rental income and comply with local regulations.

 

Declare the income

When renting out your property in Spain, it is important to declare the income to the Spanish tax authorities. This is done through the submission of an annual income tax return (Modelo 100/111) for non-resident landlords, or a regular tax return (Modelo 130) for resident landlords.

In the tax return, landlords must declare the rental income received, as well as any expenses incurred in relation to the property, such as management fees, repairs, and maintenance. The Spanish tax authorities will then calculate the tax due based on the declared income and expenses.

It is important to note that landlords are required to issue a receipt (Modelo 347) to the tenants for each rental payment, and to keep records of all rental income and expenses for a period of four years.

It is also important to note that as of 2019, the Spanish tax authorities have implemented a new electronic system for the declaration of rental income, which requires landlords to submit the declaration of rental income online and to report the rental income on a quarterly basis.

Additionally, in some autonomous communities such as Cataluña, Madrid and Andalusia, landlords are required to register their rental properties with the local authorities.

It is recommended to consult with a tax expert or a lawyer to ensure that you are compliant with all the regulations and tax obligations when renting out a property in Spain.

In summary, when renting out your property in Spain, it is important to declare the rental income to the Spanish tax authorities by submitting an annual income tax return and also keep records of all rental income and expenses for a period of four years. Additionally, in some autonomous communities landlords are required to register their rental properties with the local authorities and comply with the new electronic system for the declaration of rental income.

In order to legally rent out a property in the Costa del Sol region of Spain, the property must have a Tourist License. This license is issued by the local government and is required to ensure that the property meets certain safety and sanitation standards. The following requirements must be met in order to obtain a Tourist License:

• – The property must be registered with the local government as a vacation rental.
• – The property must meet certain safety and sanitation standards, including fire safety regulations and the provision of basic amenities such as bed linens and towels.
• – The property must be inspected by the local government to ensure that it meets these standards.
• – The owner of the property must provide proof of liability insurance.
• – The owner of the property must also register the property with the local tourist board and pay any necessary taxes.
• – The owner of the property must provide a detailed inventory of the property and its contents.
• – The owner of the property should have a contract with the tourists.
• – The owner of the property should have a 24 hours emergency contact number.
• – The owner of the property should have a procedure for check-in and check-out with the tourists.

Once all of these requirements are met, the property will be issued with a Tourist License, which must be renewed on an annual basis.

Things to consider

It may be a good idea to hire a reliable cleaning company that can help with cleaning after and before each tenant. It may also be good if you have a caretaker or a company that can look after your home occasionally or in case of emergency. You should also think through the key management. Either if a third party helps with it or if you use a key box with a code or if you have a door that does not have a key lock but opens via a code. You also need to have a booking calendar. Most advertising portals offer these services. You can also find cheap alternatives if you want to have one on your own website. There are also cheap payment solutions where the customer can pay online via card or OCR number on a paper invoice or bank transfer, etc.

Which property?

When choosing a property to rent out, it is important to choose the right house or apartment. It is also important to choose a property that is located in the right area. In some areas of Spain, it can be difficult to get high occupancy or good occupancy at all, regardless of whether it is a popular place. But if you find the right property in the right area and with the right marketing, you can make a very good housing investment. How well the apartment or house functions on the rental market often determines its value in the long run. You do not need to look at how much it is valued in connection with the loan of the property, as the bank usually values the property lower than the market value, or price per square meter, as the curves look like EKG over relatively short periods of time. The most important aspect of how the property develops in price over time is predictable income that the property generates. Also look at factors such as how long it takes to sell similar properties in the area, how much in the area is completed, what target group you mainly rent to, the stability of the rental company, etc. affects the value increase. It is also important to remember that even if you have a brand new apartment in newly built neighborhoods that are by the water, it is not sure that you will get it rented out because there is a lack of life, movement and history. Building in an unproven area without a plan to attract tourists creates ghost towns where no one will rent because no one knows the area. Also remember that before you buy a property for rent, you should have a lawyer who helps you with all things.

Factors that are popular

It is a big plus if the property has a sea view, but it is not a must. It is also desirable that there is a terrace or balcony, especially if you are targeting Scandinavian tourists. The most popular is that there are 1-3 bedrooms. Among the most popular types of accommodation when international tourists get to choose, the villa is number 1, the apartment is number 2, the townhouse is number 3, the penthouse is number 4, the country house is number 5, the studio is number 6. The type of accommodation that brings in the most income is the right villa in the right area. Also look at whether the area is well-maintained and that it is within walking distance to the beach. Many also look at that it should be less than an hour’s drive to the nearest airport. The further away from the airport, the less interest in renting the property. Many who rent also look at whether there is good communication with well-developed bus network and if you can get around the town without a car. Many also look at whether there are entertainment, restaurants, etc. within easy walking distance. It is also important that there is not a large highway or main road right next to the property. The five most important things in the property that tourists demand are a washing machine, terrace or balcony, access to a pool, A/C, and sea view. Then also cable TV, parking, dishwasher, jacuzzi, heating, that it is allowed to have pets, and that the property is adapted for the disabled. The most important of all is always LOCATION.

Tips to increase your rental

It is extremely important that you take good and clear pictures. The pictures should be both of the interior and exterior as well as details such as sea views from the terrace or garden. Also pictures of the kitchen, kitchen equipment, bathroom, bedrooms, living room, etc. Avoid taking pictures where the sheets are wrinkled, paintings are crooked or the lights are dimmed. It is good if the photos have high resolution but adapted for the web so that it does not slow down the loading time. Just as important as it is with photos, it is with headlines and descriptions. Make them as inviting as possible and focus on what makes your property unique. Think about location, price, etc. It is also important to include as much as possible in the description such as maximum number of guests, sqm, kitchen equipment, number of bedrooms, pool available, distance to the beach, etc. When you then get questions, it is important to answer quickly. It can also be good to have a phone number that you can call, it is 10% of customers who prefer to call than to use email and those who call usually book directly. In connection with the booking, it is important to send the rules that apply to the property and the area as well as cancellation rules. It is also good to save copies of what you have communicated about. You can collect your customers in an email list such as the free service mailchimp and then inform about discounts or similar. It is important to keep your booking calendar updated. It is also important to be flexible and able to change prices, add equipment, renovate a bit, etc. to get more interest.

Think about the details

Remember to buy fresh furniture, cutlery and glasses. Also make sure to have some nice interior details such as paintings, vases, cushions, blankets, etc. The most important thing is to invest in good quality bed linens. Egyptian cotton with the designation ECO or real linen sheets is something that makes customers feel comfortable. Luxury hotels invest in 100% fine combed Egyptian cotton with 300-400 thread density and always white sets. This signals luxury and comfort and is a good tip to adopt. It is also good to offer a nice set of towels and bath towels. These small details are highly appreciated by guests and make them want to return and you will have built up a customer base that also stays when times are harder.