In just a few years, tourism has changed the rental market at global level as more and more landlords switch to holiday letting to make more money. However, a survey by Uniplaces, a student accommodation booking service, has found that the return made in the medium term by owners letting on their platform is comparable to holiday letting. It reports that “returns from renting accommodation to students in the medium and long term is around 7% a month, net of expenses”.
Adapted translation of an article published by El Mundo.
The company also reports that the average price for renting a room in Spain is €398 a month. This translates to €4,776 gross profit a year for the owner, excluding fees and property taxes. This amount exceeds, for example, the calculations made by Madrid City Council in their study Analysis of the Impact of Holiday Lets in the city centre. The study used data from Inside AirBnb, which indicates that the average annual income from a holiday let in the city in 2015 was €4,118.
Apart from the financial benefits, Uniplaces lists other advantages for medium to long-term rentals:
Reliable payments: Students are the best payers because, in most cases, it’s their parents who are paying. The default rate among student tenants is 0.01%, according to Uniplaces.
House maintenance: Given that students stay on average for more than four months in the property they rent, they tend to look after the furnishing and maintenance. This is an advantage over renting by the day since tourists who stay for a few days only in a property don’t usually bother taking much care.
No tourist taxes: Renting medium and long-term, as is the case with student rentals, is exempt from tourist tax.
Better control over availability: Student rental coincides with academic terms so a room is very likely to be let continually for ten months a year.
Better for neighbours: Student rentals avoid the problems with neighbours that arise with holiday lets. And students because they spend months in the property respect community regulations and keep the noise down.
Higher return: Although on paper holiday lets appear to offer more profit, in reality letting a room can be more profitable than letting the whole property.
Continual demand: Student mobility is continual and increases every year, making it relatively easy to let a room. Holiday lets, on the other hand, tend to be affected by seasonality and other external factors such as the rising or falling popularity of a tourist destination.