Part of your plan to have a home in Spain may include receiving some income from rentals. If receiving rental income is in your plans then careful consideration to the location and property type is essential if you are to stay ahead in the extremely competitive holiday rental market.
If you are buying a holiday home for mostly your own use
1. Always give priority to your own needs rather than what’s perceived to be the best option for rental yield. For example, that 2 bed 2 bath apartment on the golf course may be ideal for year round income, but if you and your family have no interest in golf, is it going to be the best choice for you?
2. Don’t get caught up in worrying about what the property will be worth in 15 or 20 years time. You’re going to get years of great times on holiday using it in the meantime.
3. Go with what feels best for you – don’t have your head turned by promises of emerging markets or areas that won’t have the facilities you need right now, but buy where you and your family actually would enjoy spending a great deal of time on holiday.
If you want to buy a property in Spain mainly for profit
1. You don’t always have to ignore your own feelings and tastes – advice from your agent is useful but what feels right for you is probably right for others too.
2. Do give more consideration to the capital growth prospects of the property over rental yield – capital growth will be massively more important to your overall profit.
3. Don’t forget, renting your home to holidaymakers may make you give you a good return, but it won’t necessarily be the important factor if you choose to sell the property.
If you are somewhere between the two above
1. Make sure you get the balance right between buying for profit and making the right choice for a holiday home for you
2 Never compromise on the location of the property in Spain. After all, it’s you that’s going to need those all important holidays.
3 Give some consideration to things like the length of season, ease of access from where you and target market live. These factors will have a big affect on your rental return.
