Renting too cheaply! Is it worth it?

Buenos dias,

I am hoping this thread will provoke discussion as to why rental properties in 'Porto Fino' I have viewed on various sites appear to have been sold short of their potential rental value.

I am well aware of the need to recoup some of the costs involved in the purchase and running of our apartments- all of the costs with a bit of profit would be nice but highly unlikely eh!- and I know every ones circumstances are different but in my opinion the cheap rents available seriously undermine the true value of an apartment block that is situated in the heart of Almerimar, THE prime position for golf, the beach and the marina.

When we put the deposit down on our apartment we were told the same spiel that everyone else was given and we wanted to believe it, it hasn't happened yet and will be a very long time before we do see the prosperity promised, but above all of this we realised that an apartment 2 minutes from the beach and marina, both the heart and soul of Almerimar, would be more desirable to renters, and obviously ourselves, than somewhere that's 25 minutes walk to the beach, and that renters would be prepared to pay for that convenience.

After some consideration, mainly due to the low prices available to renters, we have decided not to rent our apartment.  This doesn't mean we can afford 'not to rent' rather that we 'can't afford to rent' as the money recovered from rentals wouldn't warrant all that's involved in this process. 

Having spent a considerable amount of time in our apartment I am aware that in the month of January last year it cost 50 euro/WEEK to frugally heat the apartment had I thrown caution to the wind, or a renter abused the usage, it would have been double this, of course it would also cost the same for air conditioning in the summer!  This tied with an average of 70 Euros for cleaning and laundry, 30 Euros for a key delivery and welcome show around then an inventory check to ensure everything is at it should be on leaving you're looking at 150/200 euro costs, this doesn't leave much if the rent is on average only 400 euros!

By my reckoning 400-200x (10 weeks rentals)= 2000 Euros, and that’s if you're lucky enough to get 10 weeks bookings which from what I've seen on websites is unlikely!  Hardly seems worth the aggravation of re-decoration, furniture replacement, property management costs and incidental repairs and general running costs.

The point of this thread for me is to highlight the reality of involved costs that appear to have been overlooked by many judging by the prices available, I do wonder how these rental prices have been arrived at, I know the market place is tough in all aspects but it would cost more to rent a caravan on a farm for the weekend than a practically new fully equipped apartment in Almerimar, unbelievable!? On top of this I cannot understand how or why a rental in 'Porto Fino' is the same as that in 'Laguna Beach'(45 mins. to marina) for example, considering where it is situated.  I believe their price band reflects their true value given these hard times, I just hope that owners in 'Porto Fino' realise the true value of our properties considering their prime "location, location, location". If you judge the value of rental of your apartment against those already on websites you're selling yourself short!

We would like to be able to rent our property, but as we've realised with property rentals available at such low costs there is little point and we think it futile to compete with them, 2000 Euros/annum less the incidentals, no thanks!

What do you think, is there anyone else on the same wavelength, answers on a postcard please, preferably from Almerimar and not a campsite in Cornwall, it would be too soggy.

Adios Steve

hi steve

 fact is all over spian 40% drop in rent income too many apartments. in uk  rent is good as

a lack off housing.be at least 3 years before anything will sell

so you have to hang on as i still think it has still to go down 20%;

yours al.

Hola Al,

Thanks for your input.  The composition of this thread is guided solely towards holiday rentals rather than renting in general, I understand that a glut of of apartments and villas etc. gives renters greater choice and an upper hand when bargaining for a long term rental and this obviously trickles down into the holiday market also but when people go on holiday they will pay a premium to secure an apartment in a particular area or one they have enjoyed before or on top of the beach etc., a myriad of reasons and this is my point really, why would any owner sell themselves short and practically pay for someones holiday?

It is ultimately the rates asked for by the owners that govern an overal bench mark figure that is way below par  and I can only assume that the figures of such low rent have been arrived at by checking out what everyone else is charging, self perpetuating, or poor advice by the doom and gloom mongering local estate agents.

The ability to rent an apartment in 'Porto Fino' for the figures witnessed does not reflect the cost to the owner which is 40-50% of income at the rates being asked for , 25% costs should be more like it, I wonder whether anyone has rented at all and yet to find this out, gawd help 'em .

I met some people, now friends who were based 45 mins. walk away from our apartment, not saying where, who came and and looked at our place to compare, they were bowled over and said they would happily pay 50% more than they paid (which was £300 for the last week of September) for where they were staying purely for the convenience of our location.  Note to owners,say no more.

Gracias Steve

I'm afraid Steve it's all about supply and demand. The supply fars exceeds the demand so that drives the rental prices down. We have been renting our apartment now for the third year and in our experience there is very little demand from British/Irish. Therefore we have marketed to other Europeans especially Spanish who are not prepared to pay as much.

The Estate Agent said we could get 700 euros per week for a 2 bed apartment at Porto Fino during peak periods but at the moment that's just wishful thinking. It may happen eventually but in the meantime you can only get what the market is prepared to pay (whether you think it is worth more or not).

It is hard work renting the apartment to holiday makers but if you do rent it successfully you start building testimonials and repeat business/recommendations which should pay dividends when things pick up.

Trevor

Hi Trevor,

Thanks for your input.

So it's the Brits not holidaying in Spain that are the cause of our woes allowing our European cousins the chance to have a cheap holiday eh!  I do understand from people I've spoken to here that the exchange rate is putting them off going to Spain, and taking their holidays in Britain with our pot luck weather or long haul flights are their preference to guaranteed sunshine a 2.5 hour flight away, I personally don't get it.  Only yesterday I was explaining to a friend that for 3 euros I could get an ice encrusted pint of beer and free tapas or have a BBQ with some very tasty pork or fish and salad for a fraction of the cost in the UK which in comparison to a pub lunch in Devon sheltering from the rain wins hands down every time and he agreed (he also said that no matter how tough things are he will always make sure his family have a holiday in the sun, which I think is a very British attitude, there has to be a market still for Spain?).

I understand that a flooded market place allows for bargain deals, my question is at what point does it become futile renting at low prices considering wear and tear to the furniture and bedding, re-decoration etc. and the incurred expenses for meet and greet, inventory checks, laundry and cleaning (these services costing on average 90-100 euros).  I know from personal use of our apartment that from frugal use of the air conditioning costs 50 euros/week, if abused this has got to at least double to 100 euros/week (my very first post details this).

Your prepare now for the future point may cause me to review my decisions, but I can't get my head around the expense of it all unless convinced otherwise, is their a way? 

Regards Steve