Buying a Property To Rent in Valencia in the Airbnb Economy

We get a lot of enquiries regarding buying an apartment in Valencia to rent on Airbnb (or other portals) For the longest time we have been advising people that first floor apartments are the best from what we understood of the proposed law (proposed a couple of years ago) Well now it looks like finally the new law will be in place very soon and we were right. First floor apartments will still be possible to get a licence for as long as the other owners in the building are in agreement at a community meeting (Can you foresee any problems with this? We can) To know more about the proposed law take a look at this excellent piece by Louise Brace from last year. Medium term rentals in Valencia
Medium term rentals in Valencia
Most everyone wants to buy a place to rent out on Airbnb to short term rentals, effectively tourist rentals. However you should be aware that other types of rentals are possible and you can do a favour to people looking to rent whilst also getting a good return on your investment by being competitive in the market and supplying an excellent quality product. Today we are going to look at what types of rental are possible when you buy a property in Valencia City. There are three types of rentals and each will give you a different return and you will have different requirements. There is short term rental, long term rental and what we shall call medium term rental. Let's start with the short term rental market in Valencia. This is the most popular currently as it has been unregulated for the last few years. Currently, as I write this, you can still get a licence for most apartments in the city. As described in Louise's article you just follow the steps. However, most short term rentals are unlicensed and Airbnb has already been fined for allowing flats without a licence to advertise on their portal. The reason they are mostly unlicensed is because tax avoidance is a national sport in Spain and a lot of people don't pay any tax on their tenants' payments. This is the real issue for regional and national governments that they are trying to sort out with the legal framework for renting to tourists. What type of property should you buy to rent in Valencia? Well it goes against the grain perhaps but the lower the price property the better return you will get in the airbnb economy when expressed as a percentage. As long as the photos are impressive, everything in the property "works" when the client gets there and it is situated well, then airbnb clients tend to be happy. Location is often key but locations don't have to be ultra central in a smallish city like Valencia. Oftentimes being on a quiet street so the client can sleep, having excellent local cafes and restaurants, having lots of light and providing the greatest amount of information in the apartment for your clients trumps pure location considerations. Returns on renting to tourists can be very high (talking as a percentage) depending on the advertising, the photos, the owner's network of contacts and other criteria. However maintenance of the property, doing the changeovers and keeping on top of meeting and greeting clients can be annoying for many owners and they soon tire of this type of rental unless they employ a company to do the work, which will cost them anything up to 30% of their income from the property. (We know of one company in Valencia that was renting out a property for an owner supposedly but never informed the owner of any tenants being there meaning the owner got no income and they eventually realised the flat was being used when receiving electricity bills with lots of usage.) The long term rental market in Valencia has gone mad in the last year. Prices have risen for the very few properties that are available. The effects of Airbnb and the preference of the majority of people for this type of rental has meant that the quality and quantity of properties on the market has dropped dramatically. If you buy a property in Valencia to rent it is almost certain that you will rent it out almost immediately giving you an immediate return on your investment. However you need to decide on a couple of things. Firstly, are you going to rent it furnished or unfurnished? Secondly, what price range and what type of tenant do you want to attract? If you are looking to get foreign tenants in; teachers, people looking to buy but wanting to rent meantime etc... then it must be furnished usually. Unfurnished is more for local families who will bring their furniture with them. You will normally need to supply white goods even to families wanting unfurnished. In our experience furnished gives you a greater number of potential tenants as it includes both the local and foreign market. We only deal with foreign tenants as that is our core market but local agents we work with can supply reliable tenants and also you can get an insurance policy to cover the tenant potentially stopping paying quite inexpensively. The insurance companies will not supply this for foreign clients which is a bit stupid but it helps with those who play the system (Currently it still takes too long to get a non paying tenant out, the insurance you pay will mean the insurance company takes on that responsibility too). brighten up your life by moving to Valencia
Brighten up your life by moving to Valencia
The Medium Term Rental Market in Valencia is our preferred option for our clients who buy to rent in the city. We like this because we have a constant throughput of potential clients looking for 3-6 month rentals while they settle into the city, or they are on contract work or they are looking to purchase and want to rent somewhere as a base to start with. You also don't need to get a licence for this type of rental. This type of tenant is usually very respectful of the property as it is their home rather than somewhere to lay their head for a few days as tends to be the case with Airbnb. They look after the property and also keep it clean and tidy. Oftentimes, they extend their original contract term period too if they haven't found the right place yet. In terms of rental returns this type of rental pays roughly 20-30% above long term rental prices because there is so little availability and often utilities are also included in the price although limits on electricity usage at the basic price are often applied. One thing to mention is that to do this type of rental, or short term rentals, then a high speed internet connection is essential these days and you include it in the price. For long term rentals in Valencia it is less necessary of course because the tenant will get their own contract but it can help to get a tenant in quickly. We cannot recommend a company for the best internet connection as it depends on the best current offer from the four or five companies offering the service. If you are looking to buy a property to rent in Valencia then contact us and make sure to let us know what your thoughts are regarding the type of rental you want; short, medium or long term rentals. We can recommend the type of property and the area where you would be most likely to rent it out as we are experts on all areas of the city, inside and out. We look forward to welcoming you to Valencia. Be Inspired in Valencia
Be Inspired in Valencia
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