# Best Way to start a company to rent out holiday lets



## oxfordlad (May 4, 2016)

I am currently thinking of moving to Spain and maybe starting a company to rent out holiday lets, does anyone do this with their own villas/apartments.

The main question being really what would the best way of doing this be, I currently run a UK Ltd company, would the best way to set up a Spanish one and do it through that or is it a complete minefield??


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## xabiaxica (Jun 23, 2009)

oxfordlad said:


> I am currently thinking of moving to Spain and maybe starting a company to rent out holiday lets, does anyone do this with their own villas/apartments.
> 
> The main question being really what would the best way of doing this be, I currently run a UK Ltd company, would the best way to set up a Spanish one and do it through that or is it a complete minefield??


:welcome:


cue snikpoh.....

he's a member & mod here on the forum & lets properties. I'm sure he'll have some advice for you


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## snikpoh (Nov 19, 2007)

oxfordlad said:


> I am currently thinking of moving to Spain and maybe starting a company to rent out holiday lets, does anyone do this with their own villas/apartments.
> 
> The main question being really what would the best way of doing this be, I currently run a UK Ltd company, would the best way to set up a Spanish one and do it through that or is it a complete minefield??


... and, on cue ...

My answer - "don't do it!".

I have both holiday lets and long-term lets and wished I didn't.

I tried to go autonomo (self-employed) here in Spain but was advised that this option wasn't allowed! Something along the lines of it not being a 'viable' business.


Why are you thinking of doing it as a business? 

Why not do what I do which is to do it anyway and then just declare the income for tax. There are no tax breaks for being a limited company (given all the expenses involved) anyway so I can't see it makes much of a difference.



Overall, I would say it's really not something I would recommend. Rents are low on long-term lets with the law being on the side of the tenant (mainly).

Holiday-lets are now being heavily regulated as the hotel lobby want them 'outlawed'.


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## AllHeart (Nov 22, 2013)

Here are the laws as of November regulating holiday lets throughout all the regions in Spain:

Region-by-region update on Spain’s holiday rental law - Spanish Property Insight


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## mrypg9 (Apr 26, 2008)

I see airb'n'b are advertising on Sky...


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## AllHeart (Nov 22, 2013)

mrypg9 said:


> I see airb'n'b are advertising on Sky...


Yes, here's their new ad:






The costs of airbnb are climbing - advertising drives up costs too. Now many renters charge cleaning fees, cancellation fees and deposit! With more laws regulating holiday rentals, the costs will keep climbing. It used to be the same with bed and breakfasts in Canada before they were regulated - they used to be cheap and under the table, but now they're expensive and highly regulated, like in the UK, Spain and other countries.


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## oxfordlad (May 4, 2016)

So from this is it not a viable option then to do rental apartments or villa's then?

Is it difficult as a UK company to operate in Spain (if that is an option)?


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## snikpoh (Nov 19, 2007)

oxfordlad said:


> So from this is it not a viable option then to do rental apartments or villa's then?
> 
> Is it difficult as a UK company to operate in Spain (if that is an option)?


I thought I answered that ;


> Overall, I would say it's really not something I would recommend. Rents are low on long-term lets with the law being on the side of the tenant (mainly).
> 
> Holiday-lets are now being heavily regulated as the hotel lobby want them 'outlawed'.


UK companies can't operate in Spain unless they have a Spanish office (ISTR)


What about the answer to my questions before we answer more of yours?


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## mrypg9 (Apr 26, 2008)

oxfordlad said:


> So from this is it not a viable option then to do rental apartments or villa's then?
> 
> Is it difficult as a UK company to operate in Spain (if that is an option)?


I've been a landlord in the UK and Canada. No way would I consider being a landlord in Spain.
Laws here are heavily stacked against the tenant. I've heard so many horror stories here of tenants trashing properties, not paying rent...People come and go here, leaving no trace.
My son and dil own a property here. In the past, friends have used it and have paid just enough to cover costs. They've decided to stop that now. New laws regulating rentals will apply even to those kinds of arrangements.
When we left the UK we sold our properties and rent here. We are very happy in our villa with pool where we've lived for seven years, good landlord, secure tenure, all repairs promptly done and paid for....
Listen to the wise words of snikpoh, he knows whereof he speaks


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## Isobella (Oct 16, 2014)

What happens in Spain if you have a long term tenant and want to sell? Or what if the Landlord dies and you inherit a tenanted property?


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## AllHeart (Nov 22, 2013)

oxfordlad said:


> So from this is it not a viable option then to do rental apartments or villa's then?


I'd say it is a viable option, because there are obviously so many people doing it that they have passed laws regulating it. But it's not easy money, like it used to be before the laws were passed. And they can always change the laws, so you're victim to that. It's always good to listen to the warnings of landlords, like the warnings you're getting here. 

I have a cousin who's been trying to sell his rental apartment here in Malaga for a year because he has had one horrible tenant after another. He's visiting from Brazil and is stuck here trying to sell. That's another thing you have to bear in mind: A bad market if you decide to sell.


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## snikpoh (Nov 19, 2007)

Isobella said:


> What happens in Spain if you have a long term tenant and want to sell? Or what if the Landlord dies and you inherit a tenanted property?


The tenant must be given first refusal to buy said property. If the landlord/owner needs the property back for their own personal use, then they have the right to give the tenant due notice.

If you inherit a tenanted property, I think the rights of that tenant remain (but I'm not sure).




AllHeart said:


> I'd say it is a viable option, because there are obviously so many people doing it that they have passed laws regulating it.


But you're missing the OP's point about doing it via an Ltd.

I agree that the concept is viable (possibly, in some areas for some property) but not as a Limited company or as a business.

The OP for some reason (that I have asked about) wants to run it as a limited company or SA/SL in Spain. I think this is very hard as I couldn't get hacienda to agree that it was a viable proposition!


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## Horlics (Sep 27, 2011)

Op,

Are you talking about running a company that handles rentals for other people, or are you going to buy properties which you will then rent out?


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## oxfordlad (May 4, 2016)

snikpoh said:


> ... and, on cue ...
> 
> 
> Why are you thinking of doing it as a business?
> ...


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## AllHeart (Nov 22, 2013)

oxfordlad said:


> I was just thinking of a way to make money out in Spain and thought of rentals, hence the question regarding what would be the best way of doing it that was all.
> 
> I'm currently a design engineer and am looking for a change in career and lifestyle, just thinking and sounding out options


So you don't necessarily want to do holiday lets as a registered business, right? You're just wondering how it's done?


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## Pesky Wesky (May 10, 2009)

AllHeart said:


> So you don't necessarily want to do holiday lets as a registered business, right? You're just wondering how it's done?


Well, he wants to make some money in Spain, and if you do that then it should be registered business, shouldn't it?
Snikpoh is saying it's not really worth it as I understand it. Others have said the same in the past.


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## oxfordlad (May 4, 2016)

Yes at this moment in time I am just sounding out idea's and also what would be the best way to go forward with different ideas. I have a lot of friends who play golf so one thought would be on the golf holiday type trips and buying a couple of apartments for that.
As we would want to move to be on or by the coast I doubt there would be many engineering jobs etc for me so other than flying back to UK every week I'm just looking at other options.


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## AllHeart (Nov 22, 2013)

Pesky Wesky said:


> Well, he wants to make some money in Spain, and if you do that then it should be registered business, shouldn't it?
> Snikpoh is saying it's not really worth it as I understand it. Others have said the same in the past.


As I understand it, Snikpoh is saying you can't do this as a registered business. You have to claim the income (of course a lot of people don't, and that's why they're coming out with the new laws), but it's not considered a business.


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## Pesky Wesky (May 10, 2009)

oxfordlad said:


> Yes at this moment in time I am just sounding out idea's and also what would be the best way to go forward with different ideas. I have a lot of friends who play golf so one thought would be on the golf holiday type trips and buying a couple of apartments for that.
> As we would want to move to be on or by the coast I doubt there would be many engineering jobs etc for me so other than flying back to UK every week I'm just looking at other options.


Probably a good way to go would be to try out the things you might be interested in starting up ie go on a golfing holiday, get mates to go to the same area, different deals, compare, see what you like, what's lacking...
Although of course don't think it hasn't been done before and you might find that the market in that particular area is saturated. Or soggy. 
You may need to look at wider issues.
With golfing for example the environmental damage that is done is huge. I don't expect that will stop developers though, but it might make real differences to the surrounding countryside (and that could impinge on a selling point of golfing businesses in the general location) and to local communities...


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## Pesky Wesky (May 10, 2009)

AllHeart said:


> As I understand it, Snikpoh is saying you can't do this as a registered business. You have to claim the income (of course a lot of people don't, and that's why they're coming out with the new laws), but it's not considered a business.


Yes, that's kind of what I meant


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## AllHeart (Nov 22, 2013)

Pesky Wesky said:


> Yes, that's kind of what I meant


OK. I think we're all on the same page now.


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