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Opinions on Long-Term Spanish Rental

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Opinions on Long-Term Spanish Rental

Post by admin »

As some will know, I've had an apartment in Murcia, Spain for the past 5 years and we use it quite a bit. The Banks are selling off the unsold apartments on the resort quite cheaply (looks like another price drop is being implemented) and I am considering buying one of their 2 bed apartments to rent out. I don't think that as a holiday apartment it will rent for much more than 6 weeks over the Summer (at say £250/week) due to the oversupply in Southern Spain so I'm trying to understand the likelihood of long-term rentals outside of the Summer i.e. attracting people from the UK to either 'winter' or move permanently out here. I know it's great here but what do those back in the UK, who are flexible on their location, think about such a move? Would appreciate any comments from that perspective. If this post also peaks someone's interest in renting then please do get in touch.

I reckon that a monthly rent of around £400 per month outside of July/August would provide enough of an income return on the capital outlay and ongoing costs but at that price I'd be looking for a minimum 3 month rental period for any tenant. The only thing the tenant would need to pay extra would be electric & water which probably adds around another £100 a month on top. There would be no 'council tax' or 'rates' or 'internet' or 'tv' costs to pay by the tenant as I would pay these via community fees and taxes as the property owner. So a 3 month stay would cost them around £1,500 and a 6 month stay £3,000 or year round £6,000 which to me sounds pretty cheap and a far better alternative for many than going through the costs and problems with buying for the first time out in Spain (and mean they don't have capital tied up in Spanish property which can be hard to liquidate).

Whilst I'd be very happy to rent it out for 12 months or more I doubt many from the UK would want to stay for more than 6 months otherwise they could become Spanish resident, so the market primarily I think would be those wanting winter sun for 3 to 6 months of the year. Unless of course I was lucky enough to attract someone wanting to live permanently in Spain and, if so, as professionals (my wife & I own and run a Chartered Accountancy firm) and being familiar with the Spanish systems we are well placed to help a tenant, that wants to live permanently in Spain, with all the related Spanish bureaucracy to make their move as hassle free as possible.

Whilst it would probably most suit recently-retired couples (who have an interest, say, in golf or walking), I've seen that some younger families are moving out permanently to take advantage of the cheap property, and better climate & food, even if it means the main worker flies back to the UK for their job although some work from their apartment via the internet. The resort is in a peaceful setting, has 24 hour security, facilities on site (e.g. supermarket and restaurants), is near beaches and has a decent number of permanent residents and living costs in Murcia are about one-third cheaper here than in the UK (e.g. diesel is £1/litre and food is fresher and cheaper as a lot grown locally). We'd be on hand for a lot of the time to sort out any issues, introduce them to the area and people and can help with the more complicated things for long-term stayers such as medical cover options or re-registering or buying a car etc.

Does fiso have an opinion on whether long-term renters would be attracted? Do you think those interested would just go to the main holiday rentals websites when looking for somewhere to rent for 3 to 6 months (unfortunately I can't just stick this on Rightmove)? Do you think those wanting to move out here permanently will want to buy a place rather than rent?

Obviously if anyone knows someone who would be interested then please pass my contact details on.

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Re: Opinions on Long-Term Spanish Rental

Post by Knulpuk »

My view is that if someone has the kind of portability of job which will allow them to operate anywhere in Europe (say) then I would have thought it would be a relatively well paid job and that therefore they would be looking at a bigger better located place.

I think your market would be the retired who had a desire to get some Winter sun but not the capital or desire to tie that capital up in an uncertain market.

Might be a niche market providing longer rents to people looking to re-locate - and will use as a base for finding that ideal property.

I think attracting a young family as optimistic (though I see the benefits).

Looking at the prices I am quite tempted. Or how about a FISO timeshare!

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Re: Opinions on Long-Term Spanish Rental

Post by murf »

Bit of a gamble buying with an unhealthy market. Prices could drop further and an unhealthy / non vibrant resort means low appeal for rentingm

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Re: Opinions on Long-Term Spanish Rental

Post by Mike_ »

Where abouts in Murcia is it ?

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Re: Opinions on Long-Term Spanish Rental

Post by Surprised »

One way to market it could be to people who are contemplating a permenent move but are hesitant. You could market it as trial run type thing. Offer 3-6 months rental to see how they like of with the option of you and your wife then helping with the hassle of any permanent move.
Basically acting as a relocation agent but with a trial run of living in Spain added in.

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Re: Opinions on Long-Term Spanish Rental

Post by admin »

Mike_ wrote:Where abouts in Murcia is it ?
PM sent.

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Re: Opinions on Long-Term Spanish Rental

Post by admin »

murf wrote:Bit of a gamble buying with an unhealthy market. Prices could drop further and an unhealthy / non vibrant resort means low appeal for rentingm
Maybe but bank prices now just under 30% of original price and the resort is one of the more healthy/vibrant ones in Murcia thanks to more people moving out (after taking advantage of low bank prices over the last couple of years on a different part of the resort) which in turn has lead to more restaurants and other commercial units opening on site. It's not perfect of course but better than most. There are similar low prices in a couple of other resorts but these would definitely fall into the non-vibrant category. So generally I'm happy that the property price is very probably at or very near the bottom and can see that there's a reasonable chance of capital appreciation in the medium/long term. Plus £/Euro is 25% stronger than it was 5 years ago

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Re: Opinions on Long-Term Spanish Rental

Post by admin »

Knulpuk wrote:I think your market would be the retired who had a desire to get some Winter sun but not the capital or desire to tie that capital up in an uncertain market.

Might be a niche market providing longer rents to people looking to re-locate - and will use as a base for finding that ideal property.

Looking at the prices I am quite tempted. Or how about a FISO timeshare!
Does look like the 'retired' is the main market partic those that enjoy golf.

Find 11 other fiso members to take a different month each for £400 then we're sorted!
Surprised wrote:One way to market it could be to people who are contemplating a permenent move but are hesitant. You could market it as trial run type thing. Offer 3-6 months rental to see how they like of with the option of you and your wife then helping with the hassle of any permanent move.
Basically acting as a relocation agent but with a trial run of living in Spain added in.
Thanks for the suggestion.

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