Making a profit from a short term rental income in Marbella can be achieved. Depending on how much rental income you want, will determine how you go about it.
There is no doubt that property prices on the Costa del Sol currently favour the buyers pocket, but with some many apartments out there, what is the likelihood that you will generate a rental income?
“I was told by the salesman that I can get a minimum 5% return on my Costa del Sol apartment. Is this true?”
We can all get caught up in the whirlwind of action when a property market is in recovery. You have a fistful of Euros to spend, and you want to invest in the right place.
Many investors who purchase properties on this coast line, expect not only to enjoy capital growth, but while the property is gaining in unseen value, they want to generate a regular windfall of cash by renting the property to a miniscule fraction of the ten million tourists who descend on the coast every year.
In reality, how easy is this to achieve?
The numbers being battered around by the realtors on the coast to customers day in and day out is “Yeah, 5% return shouldn’t be a problem. Not with a nice property like this one…everyone wants to rent here. It’s a nice spot innit!”.
Backed up with some quite impressive numbers from the tourist board about the number of visitors the coast gets annually, and a bit of toe wiggling in the sand with a cold beer and some tapas, the lovely warm sunshine and the scent of suntan lotion in the air, it is very easy to take the plunge and purchase an apartment without looking at the rental return in any great detail.
So, get on with it. How do I get profit?
Your success in the rental income business depends on three things.
The attractiveness of your property, the price of the rental AND the method you employ to rent it
Let’s face it. You’ve been shown dozens of properties, some small, some large, some with views, some without, some brand new, some, how shall we say it…rustic?, some close to bars and restaurants, some peaceful, and let’s face it, if all the salespeople on the Costa del Sol are to be believed, “..just a 10 minute stroll to the beach”
The Attractiveness of Your Property
There is a school of thought that there is a market for everything…all apartments can be rented: someone, somewhere will want to stay at your place and are quite happy paying for the privilege, and this is essentially true.
As long as your apartment abides by the rules of the local town hall, if you would like to stay there, then you can bet your last dollar so would others. Some agents insist that location is the number one deal clincher, others say that if you can’t SEE the Mediterranean from your lounge, then you won’t SEE the rentals (I just made this bit up but you get the point). It’s all poppycock!
Providing your apartment is clean, well maintained, furnished nicely and provides what you say it provides then you are good to go to market. Everything is rentable.
The Price of Your Rental
There is no need to undercut the opposition, and likewise it is best avoided to get greedy. Set a fair price for your apartment or villa. Search for others for rent in the same spot, with the same number of bedrooms and set the price accordingly.
After all, the most important of making money from your property is the dreaded world of marketing. You could have the best villa, for the lowest price, in the top location and with hot and cold running oranges but if people don’t know about it…it’s pointless!
Methods To Rent
Because I like things simple, you will be pleased to know that there are really only two ways to rent your property out.
DO IT YOURSELF or have SOMEONE ELSE DO IT FOR YOU
There are separate posts for each of these, but in essence there are pros and cons for both.
If you would like to read the Do It Yourself post you can see it here.
The Have Someone Else Do It post can be read here.
Do It Yourself
If you can handle a simple website, are not averse to dealing with those pesky customers and can find reliable people to keep an eye on your property then by far the most profitable.
Sure, it takes a commitment, but you retain full control over your apartment and you decide who stays and when, leaving you to enjoy your property should you wish.
Yes, it comes with headaches and needs time and effort but the financial rewards can make a huge difference.
Have Someone Else Do It
Usually in the hands of a Property Management Company, they will take the job of running your property and handle everything.
They will handle the marketing, the reservations, the ‘meet and greet’, security deposits, laundry, handle any emergencies that may happen, run regular checks on the well-being of your property and so on.
Sounds brilliant doesn’t it? Well it is, but it does have two downsides.
Firstly, they will charge for their services, and sometimes quite a lot, and as a result will eat into your profit like a fat bloke in an open buffet. Now this may not be all bad, but it can be quite disheartening if the same company proves to be bad at marketing and have trouble filling your property with paying guests.
You need to take care when choosing who to work with. It can make all the difference.
If you need any help or advice about any aspect of buying or selling property here on the Costa del Sol, simply drop us a line. We are a family run business who will care about your lifestyle here as much as we do of our own.