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Hi all,
Can anyone tell me how the rental market is going? . I would be interested to know if it is still good.
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Quite right, Justin, unfortunately . It may vary a bit by area and those areas which have not had a massive surge in development recently may not be as badly affected.
Talking to friends with properties and local agents it seems that the reasons are not hard to find: massive oversupply of new properties, many bought on mortgage which the buyers had been expecting to cover with rental income, weakness of the pound, Spanish credit situation (if anything worse than the UK) cutting the number of weeks the Spanish are taking on holiday.
Those who need to cover the mortgage are increasingly looking at long terms lets until things improve, which means not having the use of their property for holidays, but as more properties are completed even this is becoming difficult as the potential renter has such a huge choice, meaning that rents are not very high.
For those sticking with holiday lets, the properties which are easiest to let are those in the most desirable locations which in our area means no more than 200 metres from the sea, well-equipped, aircon, satellite tv etc. People are becoming much more demanding  and generally prefer to pay a bit more for 2 bathrooms for 4 people than have to share one bathroom. Genuine rural properties for a different type of holiday altogether are also in demand and there are far fewer of them.
If you really need to fill your propertay with holiday lets you will almost certainly need to market it yourself rather than (or in addition to ) using an agent because on their books you will be one of many...
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www.fincalaserenidad.com
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Thanks for the replies guys.
I kinda thought that was the situation. Luckily I don't have to rent out as I had realised the market would turn so didn't buy to rely on the rental to pay the mortgage, although would be nice to get an extra bit of income. We have all been saying for about the last 18 months on the forum when people have asked for advice in that area that they should NOT buy for sole investment purposes and not rely on the rental income to pay the mortgage. Unfortunately there are, I know a lot of people who have been sold properties on the premise of them being able to cover their mortgages with rental income. I rented to family and friends, which was always the plan anyway, luckily, but I think another reason that the rental market has gone down just to add to your comments Jane (you said it in a nutshell) is that I have seen the hike in prices for flights, especially in school holidays, so with that, then rent, food etc. people are getting more for their money with package holidays full board.
So, thank you for the info, just interested to hear from others if they have been able to rent out easily this year.
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On the other side of the coin, as someone who is about to embark on an 11 month rental to get to know the area while looking to buy, I would suggest our experience shows a genuine indication of the rentals market.
We were looking for a 2 bed apartment, furnished, anywhere from Estepona westwards, with a budget of upto £750 a month. Now, to my mind, that area (Manilva, Sabinillas, Duquesa) is seeing a lot of new builds and we had anticipated this would have a positive effect on prices (from our point of view). Supply outstripping demand and all that. However, we didn't realise just how much the other issues mentioned herein would help us.
After speaking with a Spanish rentals agent (a friend of a friend), he advised us as a matter of course, to offer upto £200 a month less than the asking price, as in the current climate, owners were grateful just to get some money coming in.
As a result, we've found ourselves with a much better rental property than we expected to be able to afford. As of a week on Monday, we're all set to move into a furnished, well-appointed, 3 bed/2 bath/2 terrace apartment with garage and store room. For £650 a month. And that was just one of several such properties.
Subsequently, after agreeing on this apartment, we have been told that some people are so desperate for any rental income that they are offering free rental months on long-term contracts - 11 months for the price of 9, etc - having satellite tv/broadband installed as part of the price.
So, while it may not seem like the most sympathetic attitude considering how happy we are with the apartment, I'm almost wishing we'd have played a little harder to get. Who knows what deal we might have got...
Mark.
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I would think (after careful consideration and deek knowledge of acttitudes and ways of thinking and behaving of spaniards) that for a couple of years, people will be much willing to rent out their properties at good prices such as HybridAnglo´s experience tells: 600-800 € a month as a good average, that would help owners to fully or semi-fully pay their mortgages and have space to think what to do with their investment in the medium term basis.
A purchase with an option to purchase within a couple of years could be a perfect deal in my opinion.
Arbitration agreements and insurance to secure the rentals will help a lot.
Maria
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Maria L. de Castro, JD, MA
Lawyer
Director www.costaluzlawyers.es
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Mark, personally I think you had quite a high budget for a 2 bed apartment west of Estepona and I can understand someone telling you to offer less. You are talking Sterling, aren't you and not Euros?
Long term rentals always lease for less than short term rentals and I'm not sure that being furnished or unfurnished really makes too much difference to the prices these days - only that maybe some tenants prefer to rent unfurnished as they have their own stuff!
You'll find loads of two bed apartments on this site for less than 600 Euros a month (not Pounds), long term rental. So what you have for 650 Pounds is probably about right in this market. I'm no expert but seems that way when you search.
Is your contract in Euros or Sterling? That may make a difference down the line somewhere!
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Jan,
My mistake. Replace the £ signs in my post for €.
I blame a split focus. Trying to concentrate on typing, watching rugby and not spilling my Guinness.
Oops!
Mark.
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Sorry, Mark, in my home (when my husband isn't around) only Formula 1 will allow you an excuse!!!! Guinness is allowed!!
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We have dithered about trying to decide whether to rent or not as luckily we bought a resale last year at a good price, affordable mortgage etc. but suprisingly we now have two weeks rented out in June, all of July and nearly all of August to friends who are not paying top prices but what they are paying will cover the laundry, cleaning and the mortgage payments for all three months and almost September as well. I'm glad for it not to be sitting empty. Someone told us not to ask for too much and it seems to have worked.
When we were out in February we came across three different couples (well into their late 60's early 70's) who were renting for the whole of Jan/Feb/March - now that's the rental I would like. Unfortunately we weren't pushy enough to ask any of them where/how they found the properties. Silly us!
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