[bc1050]

Hi,

I am thinking about buying and managing some vacation rental apartments (2 to 4) in central Madrid as a means of creating income which will allow me to live in the city for the next 10 to 15 years into retirement.  I and from the UK and speak fluent Spanish.

I plan to find some good quality apartments and refurb to a high quality and then advertise on the internet via airbnb, etc and run the business as a company.  I understand I can have up to a 10% gross ROI per year before costs and any capital appreciation from my investment.

I would like to ask experienced people what are there thoughts on the feasibility of this plan?  What would be the main opportunities and risks?

 

[Mark Stücklin]

First thing to bear in mind is Madrid’s crazy short-term rental regs, which mean you can’t legally rent to anyone for less than five days. The average vacation rental is four days, so tourist-rentals are essentially illegal in Madrid. See more here:

http://www.spanishpropertyinsight.com/2015/11/10/region-by-region-update-on-spains-holiday-rental-law/

[bc1050]

Hi Mark,

Thank you for the reply and comments. I am looking into the regulations issues and did discuss this with a property company in Madrid. They mentioned that these regulations were being contested and as such have not been passed yet. Have you heard that?

Even if they were passed do you think they can be implemented? How would the government actually monitor this? Does anybody know what the punishment would be for infringing this?

I understand many locals depend on renting out rooms etc in their house for income to live on and in practical terms it would be difficult to stop this. I was also wondering whether there could be another route around this by setting up a company to manage these rentals rather than run by an individual. Any additional thoughts and comments are welcome

Thanks

[Larquia]

If you are thinking of investing in Madrid, why you want to do holiday rentals? If your plant is to rent the properties for the next 10 to 15 years, why not to rent to somebody who will stay for a long period of time avoiding by doing so potential credit checks, estate agent fees, repainting, etc? It is correct that the non-holiday rental agreements must be for 5 years but you can put a one year at the time break close.
Larquia is a buyer’s broker who specialises in properties in Madrid working with investors like you. Let me know if you wish to talk more in detail.

[Author]

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