The phenomenon that is Airbnb is proving to be lucrative for those renting out their property in Torrevieja. It is estimated that around 3,153 properties are being rented through the online platform and that there is the potential availability of 250,000 places altogether.
In 21 months, from February 2016 to October 2017, there has been 20 million euros coming into the town according to professors from the University of Alicante. The information was shared at a conference held in Torrevieja’s Sociedad Casino, one of the oldest and most ornate buildings in the town. The experts explained that over the same period of time the direct income for those renting out their properties has been 11 million euros.
A revolution in tourism
Airbnb has revolutionised the way in which tourist accommodation is rented out. It has removed the middle person enabling those looking for a holiday to rent directly from the owners. Although the take off of Airbnb has caused concern in some quarters, the experts from Alicante point out that there was a similar reaction to Über when it was first launched.
This method of renting is particularly important for a town like Torrevieja due to the prevalence of rental accommodation rather than hotels. There are relatively few hotel rooms available in the town and surrounding areas with only around 1,600 hotel places available in comparison to the 250,000 in flats and houses for rent. Many visitors stay with relatives here, but others depend on the availability of these rental properties.
Not just tourists
The benefits ofrenting are also apparent for people coming to live in the town. Renting first before deciding where you want to buy is often recommended to those thinking of settling in Spain. In some cases people are actively choosing to rent long term in order to be able to maintain flexibility and variety. Rental options have also become more attractive to young people who often have difficulty in raising the deposit for a mortgage since the banks have tightened their loan requirements.
A good time to buy to rent
All in all, for those considering purchasing a property to rent, it is a good time to do so. Property prices are still low but demand for rental is high. With opportunities like Airbnb, more of the money is going directly to the home owner. There is also an increase in interest of renting property across the year and not just during the summer season. The promotion of sports and fishing tourism as well as the appeal of the natural lakes and their surroundings is growing and enticing people to Torrevieja during the autumn and winter months too.
Reminder about rental income taxes
One concern from the authorities’ point of view is that of ensuring that rental taxes are collected. Direct booking online can mean that owners feel they are able to miss paying their taxes and avoid detection. However, the Spanish Tax Authority is becoming more vigilant in ensuring that those advertising their properties are paying rental tax too.
It’s not worth the risk. With large fines and interest payable, those who do rent out their property should make sure that they declare their rental income quarterly. The dates include:
- 20th April
- 20th July
- 20th October
- 20th January
Allowances are made for some expenses and your tax adviser can outline what you can set against any income you do receive.
The indications are that letting property will continue to be a good way of making an income in the foreseeable future. It’s an investment that can make money for you whatever you decide to do.