Long term rentals – a solution to the dilema

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This topic contains 12 replies, has 4 voices, and was last updated by Profile photo of Anonymous Anonymous 9 years, 10 months ago.

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  • #52606
    Profile photo of Anonymous
    Anonymous
    Participant

    As many of you are aware rentals in Spain are fraught with frustration. A tenant who stays for 12 mnths has the right to styay for five years. The problem comes when they dont pay the ent – it can take upto 2 years t evist them, by which time they could have done untold damage. So short of not renting it, renting for 11 months (which in actual fact is no solution because the tenant could insist anyway and the courts would probably u`hold their right)

    So there is nothing that can be done if you want to rent long term – you have to take the risk.

    Or do you?

    Having spent the past 3 weeks looking for a long term rental in Valencia (I actually wanted a 6 month let before I buy) I have cme across something which would protect the landlord. It is called an aval Bamcario – basically a bank guaantee. How it works is the bank will guaantee the payment of the rent for the term of the contract. If the period is 12 months with the option o extend foir five years as is the nrm in Valencia, then the bank must guarantee these payments for the ful term of the contract. As you can imagine, even at 500 per month the bank could stand to lose up to 30,000 – something they will not do. Therefore in rder to get such a guarantee the bank p`rocesses it as if it was a personal loan.

    Therefore you know two things

    Firstly a tenant who has an aval bancaio is credit worthy and secondly the bank will pay for the term of the contract ewven if the tenant doesnt. And you can rest assued that if the bank has to pay they will take the action themselves against the tenant.

    So thee yu go – a possible solution to those that are looking for a long term rental for your property but dont trust the Spanish rental law.

    Good luck

    Vince

  • #68947
    Profile photo of katy
    katy
    Spectator

    The solution is that you will have tenants with full rights to stay forever and rental increases will be controled.

  • #68948
    Profile photo of Inez
    Inez
    Participant

    And assuming the tenant is legal in which case the bank will underwrite it! Also assuming there are tenants around and from what I am finding personally any that are cannot pay rent as they themselves are not pbeing paid by the companies they work for, or are self employed in which case they are by definition not doing well.

    I have had to turf one tenant out today due to part payments dragging on and on – now owing 4 months rent.

    Other than that there are no takers, tenants are fussy and can view hundreds of properties before making their minds up!

  • #68960
    Profile photo of Anonymous
    Anonymous
    Participant

    From my understanding Katy the tenants have the right to stay for up to five years – after that YOU have your rights to take back the property. I did say that it is really only for those who are looking for long term rentals.

    As for not being any tenants about welll clearly Valencia is cmpletely different to the CDS. At the moment i have been looking for 4 weeks, have seen probably 40 properties (mostly way over price) have given a verbal agreement to go ahead on five only to be told (in one case five minutes later) that someone came in and put down a reservation dpeosit (which I dont personally have a problem with but just would like a solicitorto look over the enatal agreement first) and in one instance there were 3 people looking for the same thing.

    Also I have had many situations where I have called and made an arangement for the next day, to call and confirm only to be told that it is rented.

    I even went s far as to consider renting a room (it beats getting up at 7 in the morning and travelling for 2 hours each way every day) but it is the same situation there.

    So it looks as though everyone has deserted everywhere else and is looking to get into every apartment I see befre I do.

    However today it looks as thugh my patience has paid off as I have found exacty what I want in the location I want at the price I want to pay (well I dont want to pay anythng but I guess I have to) So things happen for a reason.

    However the point is that in Valencia City (and I am sure it is the same as any major City in Spain) there is in fact a lot of tenants about and finding the right property (or in fact any property) is a pain.

    As for lng term rentals – it may not be ideal but it at least gives you the security of knowing you will get paid your mney on time. And perhaps a guaranteed tenant for five years is better than trying to find a tenant every year.

    Good luck on your rentals

    Vince

  • #68969
    Profile photo of katy
    katy
    Spectator

    Just another honest post from one of our resident agents. When we rented never gave more than 6 month contracts (Lawyers advice).

  • #68971
    Profile photo of Inez
    Inez
    Participant

    11 months is the norm here with the notice to quit clause already given.

    Nice to hear other areas are busy with rentals, unfortunately here in CDS most tenants work in the areas of service industry that are suffering and therefore they cannot pay their rents.

  • #68976
    Profile photo of Anonymous
    Anonymous
    Participant

    From my understanding Katy the tenants have the right to stay for up to five years – after that YOU have your rights to take back the property.
    And if they choose not to leave you go through the ever so speedy Spanish court system ❓

  • #68977
    Profile photo of Anonymous
    Anonymous
    Participant

    From my understanding Katy the tenants have the right to stay for up to five years – after that YOU have your rights to take back the property.
    And if they choose not to leave you go through the ever so speedy Spanish court system ❓

  • #68989
    Profile photo of katy
    katy
    Spectator

    The law is very complex (no suprise there) but short term rentals ie. 6 months, some say 11 months, tenants do not have any rights. We do not own any spanish property now except the one we live in so things could have become more difficult. As I understood if someone goes over the 11 month term they have the five year rights. We had problems with one who only paid for a few months (a Brit) and then we found out they had sub-let the apartment which enabled us to get them out fairly quickly another we had to enlist the help of a questiionable, but well known organisation in marbella. Would never go into the rental market here again its such a hassle.

  • #69010
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi Katy

    I may be an estate agent but never touch rentals. However I have rented my own prperty out and had my fingers burnt by the Spanish Law. I am not in the least bit suggesting that people buy to let in Spain (in fact if you read any of my posts you will see I advise strongly against it.)

    My point was from a personal point of view. I HAVE had a nightmare trying to find something in Valencia. I started four weeks ago expecting to be in by the end of the week becauise in Oliva that is what it is like and providing you have a pulse the owners seldomg ask anything except whether you can pay. As for buying to let in Valencia – unless you bouhgt years ago you would never get the returns n rentals. Yu would be hard pushed to beat a bank interest rate after taking out taxes etc and if you have a mortgage you would be losing money.

    HOWEVER. I am sure there are many people out there who for whatever reason have bought a property in the past and find they cannot sell it (familiar story for most on here) nor can they find short term renters and find themselves in a position of having to support a mortgage on a property they dont particularly wish to hold onto.

    Long term rentals as you and I both know are fraught with problems. However there are people out there who would happily take on a long term renter for five years providing they would get the rent. And an aval bancario gives this peace of mind.

    As for 11 month rentals I think you may well find that the tenant also has the right to continue this. The courts will view this as a long term ental.

    Also 6 month rentals if they continue give exactly the same rights as a 12 month contract.

    The other thing you could do is rent a part of the house (ie you keep the right to have one room and come in any time you want) This means that you can access the property whenever you want and the tenants have no rights whatsoever.

    It is unfotunate Katy that you think all advice from estate agents is unworthy of anyone listening to because in this case (and I believe in almost every other case) I am merely trying to impart knowledge in the hope that people can get on with their lives and do whatever it is they came hee to do – not spend years in courts fighting developers, or trying to get tenants out. It is also a shame you see fit to deride estate agents on this forum many of whom are only trying to do the same and do offer sound advice because they are dealing with property every day and do have valuabvle knowledge to impart. They may colour their advice with a bit of risaew tinted spectacles – but hwta sales person doesnt. But that doesnt make their advice any less valuable than yours or anyones elses.

    Best wishes

    Vince

  • #69016
    Profile photo of katy
    katy
    Spectator

    Well I admit to be a little sceptical when agents post about (their) up-coming area as we all know there aren’t any now (the only things that are rising are buildings!) All the stuff about the Americas Cup is tosh, they were saying the same when it was held in Almería. I am not in the rental/property game in Spain (thank God) but 5 year rentals counteracts ALL the advice given about renting in Spain.

  • #69017
    Profile photo of Inez
    Inez
    Participant

    Oh come come now Katy – surely you have heard Disney is coming to Spain and will miraculously regenerate the Duquesa/Manilva area?

    (they have been supposedly building for over 10 years now to my knowledge!)

    So any owner wnating to sell their property down that end will not drop the price cos the rentals from Disney will be astronimic!!! 😆

  • #69021
    Profile photo of Anonymous
    Anonymous
    Participant

    Thats strange – I heard Disney was going to Valencia, Barcelona or Murcia, or was that Oliva its so difficult to decide.

    Well anyone who is enting their property out I wish yu good luck. It is not all bad news. I have a brilliant tnenant (mind you he is a very good friend of mine) has been in for a year and a half and have never had problems with him.

    Would I do it again though. Absolutely not. I would only invest in property to develop or renovate which is what I should have stuck to in the first place.

    The art of selling at a profit is ALWAYS in the price you buy at.

    Vince

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