# Profit on renting



## Tad (Mar 21, 2018)

Hi guys
We are 65 years old.thinking of buying apartment in estopona to rent out as wont be able to work.does anyone have a rough idea how much profit we would be left with after renting for €400a week.we will be living in spain too
Many thanks


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## kaipa (Aug 3, 2013)

Well can't really answer that. 400 a week suggests short holiday let's. How many weeks will you be able to rent? Who knows? Add in costs of cleaning etc. Remember you have to register pay tax and submit accounts every 3 months. So the answer will depend on a Lot of different factors. Take heed though it will not be a cash cow as many think. Spain , has rightly? tried to get something for itself out of foreigners buying Spanish property.


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## Overandout (Nov 10, 2012)

This is far too general a question to be able to provide an answer.

It depends on many many factors including; if you have any financing costs, how much the community charges are, how much the property tax is, if there are outstanding repair costs added to the community charge, if you joint or individually own the property, if you pay an agent for lettings, your own contingency for repairs / upgrades, the services to the property, your other incomes etc...

You really need to prepare a detailed business case.


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## Tad (Mar 21, 2018)

Thanks for all.clearly ive been to hasty.i only just had the idea and ive put my house on market.Whoops need to have a rethink


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## xabiaxica (Jun 23, 2009)

kaipa said:


> Well can't really answer that. 400 a week suggests short holiday let's. How many weeks will you be able to rent? Who knows? Add in costs of cleaning etc. Remember you have to register pay tax and submit accounts every 3 months. So the answer will depend on a Lot of different factors. Take heed though it will not be a cash cow as many think. *Spain , has rightly? tried to get something for itself out of foreigners buying Spanish property*.


Not just foreigners.

All of that applies to Spanish nationals renting out property too!


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## kaipa (Aug 3, 2013)

Guess I mean non residents who aren't paying tax in Spain but using Spanish properties to generate income back in UK. Don't think the Brexit crew would be too happy with Spaniards buying UK properties and renting them to Spaniards. Anyways the system is better here now as everyone has to register and declare their incomes so not A bad thing


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## Pesky Wesky (May 10, 2009)

xabiachica said:


> Not just foreigners.
> 
> All of that applies to Spanish nationals renting out property too!


Yes, of course.
Also people planning to do this should be aware that some local authorities are facing problems from a surge in rental properties. These can be worried hotel owners facing lower numbers of bookings, discontent neighbours who are not happy with holiday makers behaviour, safety issues, the licensing problems... 
In Madrid and Barcelona whole areas of the city have been transformed by phenomena like AirB&B where residents have been forced out and prices have risen drastically. As a result Some local governments are looking at ways of cracking down on holiday rentals.



> Around one in five homes in Madrid’s tourist Sol neighborhood are listed on Airbnb, according to research from EL PAÍS using data from the platform Inside Airbnb, Madrid Town Hall and registry office. Across the center, the figure is close to one in 10 homes. These figures indicate the scale of a phenomena that is rapidly changing the heart of Madrid, as it has already done to other cities. But the problem is not only having an effect on locals in the city center. Those who have decided to leave the center – either because of the prices or because the neighborhoods have become hostile – are moving to areas outside the center, which has pushed up the rent in these suburbs and accelerated the spectacular spike in the rental market, due, among other factors to the lack of offer and economic recovery.


https://elpais.com/elpais/2018/02/26/inenglish/1519648621_095942.html


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## Overandout (Nov 10, 2012)

Pesky Wesky said:


> Yes, of course.
> Also people planning to do this should be aware that some local authorities are facing problems from a surge in rental properties. These can be worried hotel owners facing lower numbers of bookings, discontent neighbours who are not happy with holiday makers behaviour, safety issues, the licensing problems...
> In Madrid and Barcelona whole areas of the city have been transformed by phenomena like AirB&B where residents have been forced out and prices have risen drastically. As a result Some local governments are looking at ways of cracking down on holiday rentals.
> 
> ...


Sorry, but this article is bordering on scare-mongering.

My appartment is in a suburb, approx 5 metro stops from Plaza de España, and although I have been able to put the rent up beyond the rate of the CPI inflation, it is still an area in which a family with two working adults can easily afford to rent (not just my apartment, the other comparable ones also) and still work in the center with only a 20 minute commute.

As I have stated in another thread, the rent I can and do charge is still significantly lower than my own mortgage payments, so to suggest that renting is becoming prohibitively expensive across all of the capital is misleading, although probably true in the real town centre.

OK, so I feel sorry for a resident who has to leave Sol or Malasaña to go to San Chinaro or Moratalaz, but it really isn't as bad as some media are making out. Yet.


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## Pesky Wesky (May 10, 2009)

Overandout said:


> Sorry, but this article is bordering on scare-mongering.
> 
> My appartment is in a suburb, approx 5 metro stops from Plaza de España, and although I have been able to put the rent up beyond the rate of the CPI inflation, it is still an area in which a family with two working adults can easily afford to rent (not just my apartment, the other comparable ones also) and still work in the center with only a 20 minute commute.
> 
> ...


Don't say sorry!

The people I know living in central Madrid (Malasaña, Opera, Salamanca...) all complain about the AirB&B (etc) effect on their life - higher rental prices, effect of living in a major tourist area, breakup of residential areas...

More info on the situation in Madrid, San Seb and Barcelona
http://www.eleconomista.es/empresas...n-frenaran-Airbnb-en-el-centro-historico.html


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## Overandout (Nov 10, 2012)

Pesky Wesky said:


> Don't say sorry!
> 
> The people I know living in central Madrid (Malasaña, Opera, Salamanca...) all complain about the AirB&B (etc) effect on their life - higher rental prices, effect of living in a major tourist area, breakup of residential areas...


Yes, I agree.

I too know people who are genuinely affected by this in the center of town, but from this to suggest that the suburban areas outside the center have experienced a "spectacular spike in the rental market" is using a bit more than journalistic licence.

In fact a cynic might say that the media are part of a scare mongering campaign aimed at instigating an effect by reporting it before it has actually happened.... I wonder if the major press agencies and the major property owners may be linked at business level ....


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## kaipa (Aug 3, 2013)

Where I live neighbours are very suspicious of foreigners buying apartments in their buildings. It took a while for mine to believe me that I wasn't intending to use Air b mbps. They really are ruining places. Where I work some Finns are renovating two apartments in the same building to use as short term rentals. Whilst they may not have any ill intent their failure to recognise things like the siesta hour etc is really annoying. It seems highly likely the ayuntamientos will soon ban these businesses as this is what they are. I didn't buy an apartment inside a hotel and that is what it feels like


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## Pesky Wesky (May 10, 2009)

Overandout said:


> Yes, I agree.
> 
> I too know people who are genuinely affected by this in the center of town, but from this to suggest that the suburban areas outside the center have experienced a "spectacular spike in the rental market" is using a bit more than journalistic licence.
> 
> In fact a cynic might say that the media are part of a scare mongering campaign aimed at instigating an effect by reporting it before it has actually happened.... I wonder if the major press agencies and the major property owners may be linked at business level ....


Yes, I don't know anything about outside the city, I was just concentrating on Madrid itself. It's incredible how these "new" factors can change "life as we know it" so quickly. I'm not necessarily against them, nor for them come to that, but I think it's essential to be aware that life is changing at incredible speed. Uber taxi's, Air B&B, Amazon are all in great demand, this is what people want, but there is fall out, damage is done along with the progress


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## Overandout (Nov 10, 2012)

Pesky Wesky said:


> Yes, I don't know anything about outside the city, I was just concentrating on Madrid itself. It's incredible how these "new" factors can change "life as we know it" so quickly. I'm not necessarily against them, nor for them come to that, but I think it's essential to be aware that life is changing at incredible speed. Uber taxi's, Air B&B, Amazon are all in great demand, this is what people want, but there is fall out, damage is done along with the progress


Indeed. Sadly I know some Spanish people who are up in arms about the Air bnb take over in their city, but then rent out their own Madrid apartment in summer when they go on holiday...

According to them their case is "different" because they just do it to offset the cost of their summer holiday because Spanish wages are so low....


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## Horlics (Sep 27, 2011)

I'm thinking of buying an apartment in Xabia to rent out. I have a friend who bought one about 18 months ago so I went to have a chat with him to see how it was doing. We calculated his yield at 9% after all expenses. That's better than many a BTLer in the UK would be targeting. As he keeps it longer and gets repeat customers he expects that to improve. This fits with the experience of another friend who owns and rents out, but she never keeps figures so couldn't put an exact number on the return.

So, in places like Xabia which are practically sold out during the holiday season and at times like Easter, there is a good return to be made.

But, with all the construction going on, the market might not hold up when capacity is increased.

And, anybody buying in Xabia expects there to be many apartments around them that are let it. It's just accepted.


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## angkag (Oct 29, 2013)

I know little about property investment, but a buddy here makes his living off it. He buys property and rents out in places where the economics work. The one place he hasn't bought property is where he lives - Spain.


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