Seasonal rentals, also known as short-term rentals, involve renting a furnished and equipped property for a short period.
Are you planning to invest in a property in Spain for seasonal rental? So… good or bad idea?
Before diving in, make sure to consider the pros and cons.
Prime Estate explains everything!
What are the advantages of seasonal rentals in Spain?
High occupancy rate throughout the year
One of the primary advantages, and not a minor one, is the climate! By choosing the right region, Spain is an attractive destination almost all year round, thanks to its sunshine but also due to its significant tourist activity and rich cultural and historical offerings. In 2023, Spain welcomed 85.1 million foreign tourists, 18.7% more than in 2022. A record! Tourism accounts for 12.8% of Spain’s GDP. This constant flow of tourists creates a significant and consistent demand for seasonal rentals.
A secondary residence that you occupy as you wish and that also earns you money
Seasonal rentals can cover all or part of your mortgage. An undeniable advantage! It can also become a source of additional income. The rental yield of a seasonal rental is high. Rates are two to three times higher than annual rentals. Additionally, you retain the enjoyment of your property. You can adjust the booking schedule as you please. In other words, you can use your residence as a pied-à-terre, according to your desires or needs.
Avoiding the risk of non-payment
The risk of non-payment is negligible for a simple reason: the tenant often pays the full amount before even arriving at the property.
Advantageous taxation
Seasonal rentals in Spain benefit from simplified and advantageous taxation. In Spain, income from renting properties for tourist purposes must be declared in your annual income tax return through the “Impuesto sobre la Renta de las Personas Físicas” (IRPF), the personal income tax. Before starting, it might be worthwhile to consult a “gestor” (financial advisor) who can provide you with good advice.
Simplified connection between owner and tenant
The number of sites connecting tenants and owners has significantly increased: Airbnb, Booking, PAP, Abritel, etc. These platforms offer increased visibility and facilitate connections. They allow you to centralize bookings, the calendar, create rental contracts, etc. Additionally, they enable effective promotion of your property.
Property degradation
Some say that a seasonal rental suffers less degradation than an annual rental. Indeed, tenants, who are on vacation, spend little time inside the property, often being out sightseeing. Regular cleaning helps keep the property in good condition. The deposit required from tenants guarantees a certain level of respect for the premises.
Others, on the contrary, say that a seasonal rental is subject to more traffic and therefore deteriorates faster.
In reality, the owner can “select” their tenant, in other words, avoid groups of young men coming to celebrate a bachelor party, thus preventing the property from being mistreated. Additionally, it might be beneficial to hire a cleaning company to perform end-of-stay cleaning, rather than leaving this task to the tenant, with the cost of the service potentially being absorbed by the rental price.
What are the disadvantages of seasonal rentals in Spain?
Administrative procedures
The first constraint of seasonal rentals is the need to register with local or regional authorities. In Spain, this registration process varies by region and involves providing information about the property and the owner. Once registered, you will receive an official registration number, the “número de registro” or “número de licencia,” which you must display in your rental ads on platforms. Additionally, before starting your activity, you must submit a “declaración responsable” (a responsible declaration) that certifies compliance with current regulations and legal requirements. Owners of seasonal rentals must also keep a traveler’s registry. This registry contains the personal data of all guests staying in the property. It must be kept for at least 3 years and can be requested at any time by tourism inspectors.
These administrative tasks may seem overwhelming, but once completed, you no longer have to worry about them.
Irregular rental income
Rental income from seasonal rentals is initially more attractive but can be more irregular over time, as it depends on factors beyond your control, such as weather conditions. This is why it is recommended to conduct a market study before investing in a property for seasonal rental. In Spain, for example, prefer the Costa Blanca and the Costa del Sol, which enjoy almost constant sunshine, or regions with strong tourist interest, which Spain has no shortage of!
Seasonal rentals take time
Managing a seasonal rental can quickly become a time-consuming activity. It requires much more availability than a traditional rental. You will need to manage your listings and reservation calendar, handle check-ins and check-outs, respond to various phone calls related to reservations, as well as answer clients’ questions.
If your schedule does not allow you to manage the rental of your property or if you simply don’t want to, there are solutions. You can turn to rental management agencies and concierge services. The idea is to leave your property in good hands. Concierge services take care of everything: cleaning, maintenance, check-ins and check-outs, emergencies, complaints, and sometimes even reservation management. You can also install a connected key box, which facilitates access to your accommodation via a remotely configurable PIN code.
Without a doubt, Spain is a top destination for investors looking to venture into the seasonal rental market: its climate, attractive prices, record occupancy in many beach resorts, cultural and historical offerings, gastronomy, etc.
But remember, before you start, it is important to conduct thorough research on your chosen region and understand national and local regulations regarding tourist rentals. So, if you are ready to take the plunge, Prime Estate is here to support you.
