Property Q&A
With Caroline Frohwein Ricano of Tiempo Rural (http://www.tiemporural.net)
Question:
“I’m considering renting out my town house in La Alpujarra while I’m in England to
earn some useful income. However, I’ve heard horror stories from friends about their
houses being left filthy at the end of rentals, animals being introduced without
permission, subletting occurring, items being damaged or stolen and electricity and
phone bills being run up in the owner’s, rather than the tenant’s, name. What can
I do to safeguard against these problems as I won’t be there to keep an eye on my
property? Are short-
Caroline’s answer:
“Renting out your property will always be a risk and you should weigh up the pros and cons carefully before embarking on such a venture, especially in La Alpujarra.
“If you own two properties in the area -
“If your second property is a townhouse, there’s very little demand for this type of property as holiday rentals, so your best option is to rent it for a short to long term period, ideally on a contract of between three to 11 months. In Spain, it’s important never to offer a contract of more than 11 months if you wish to retrieve your property within the following five years.
“If you do want to rent your house in this way, vet the potential tenants as best you can. Spend time talking to them and assessing what type of people they are. You could ask for references, although, in my experience, this makes very little difference, as they could be made up by friends on their behalf. However, if they’ve previously lived and rented locally, you could try to contact their previous landlord.
“When showing your property to prospective tenants, make sure it’s extra neat, clean and tidy. That way, they’re slightly more likely to take care of it. If the place looks untidy or scruffy, they’ll assume that you won’t care if they keep it that way.
“If you’re going away, ideally you should place an experienced and trusted agent
in charge of the property. You’ll obviously have to pay for this service. Most
agencies in Spain charge one month’s rent as their fee regardless of the contract
term. Some, such as http://www.tiemporural.net , charge less and the fee depends
on the term of the contract -
“It’s important to have a correct legal Spanish contract. Within this contract, you should stipulate the date the rent should be paid, the term of the contract, the fact that subletting is prohibited, that pets are prohibited if you don’t want them, that three monthly inspections on the property can be made giving 24 hours written notice, and be clear on which bills you’ll be covering and which the tenant will be paying. Always take a month’s rent in advance and ask for a month’s rent as a deposit.
“When the tenants leave the property at the termination of the contract, it’s important that you or your agent check carefully for damages and read the electric meter. If there’s damage or the property is left in a filthy state, you must point this out at the time and discuss the amount that will be withheld from the deposit for cleaning, replacing damaged goods or paying for bills. If this isn’t made clear at the time, it’s too late to claim from the tenant.
“In my experience of renting properties in the UK and in Spain for about eight years,
I would say that 90% of tenants leave a property in an acceptable condition. If,
however, you’re one of the landlords who ends up with the 10% who leave it in a poor
condition it’s unfortunate and, in Spain, you have very little legal assistance.
The law in Spain totally favours the tenant and it’s a slow and costly process to
embark on anything legally here. Another factor to take into account in La Alpujarra
is that monthly rental income is extremely low. A reasonable-
“If you decide to go ahead and rent, you should remove anything you consider to be of value and, of course, all personal items. It’s also advisable to remove the telephone so that bills can’t be incurred.”
Question:
“I’m putting my Spanish property on the market but I want to rent it at the same time. Is this a bad idea where the sale is concerned?”
Caroline’s answer:
My overall opinion is that if you’re attempting to sell your property, it isn’t really advisable to have it tenanted at the same time because a tenant is unlikely to keep the property to the same high standard that you, its owner, would maintain for viewings. They don’t have the financial motivation that you do!
However, if you really need the rental income and decide to sell your property while renting it out, this should be made clear to the tenants and they should be in agreement. They should then permit viewings and agree to keep the property clean and tidy for viewings. You will be obliged to give the tenants 24 hours notice if a viewing is going to occur.
A few years ago when attempting to sell my property, I had tenants in at the time. They were good tenants, always paid the rent when it was due and were clean and reasonably tidy. I invited estate agents to view the property and most of them suggested a selling price of 145,000€. A month later, when my tenants’ contract expired, I chose not to renew it. I cleaned and tidied the house, placed a few refreshing incense sticks strategically, bought a bunch of flowers, set the lighting pleasantly, put on a pot of coffee and invited the estate agents round again. Hey presto, now my house was worth 165,00€.”
So, in many cases, you could lose considerably more Euros than the rent you gain by having tenants in situ while you’re property is on the market.
