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Demand for holiday rental in Playa Flemenca?

Posted: Fri Aug 7, 2020 11:57pm
2 replies259 views4 members subscribed
Keeks

Posts: 56

4 helpful points

Location: Playa Flamenca

Joined: 11 Jul 2020

Hi all

I'm trying to ascertain if there is enough demand for holiday lets in Playa Flamenca to make buying a 2 or 3 bed house a viable option for rental income. I'm looking around Calles Niagara, Guapeles, Pavo Real area. It would be next year when hopefully, CV-19 will be under control. I am aware of the licencing and tax requirements. Any views? Thanks in advance.

Busotbound

Posted: Sat Aug 8, 2020 2:37pm

Posts: 16

19 helpful points

Location: Castalla

Joined: 29 Jun 2020

Posted: Sat Aug 8, 2020 2:37pm

Generally speaking in my opinion, and it is only my opinion, not based on any facts, I'd suggest if the purchase is dependant on an income from rentals it's a purchase that is best avoided. If this is purely an investment I'd suggest there are much better/safer places to put your money than Spanish property. I don't see that changing for a number of years.

Going back to your original question, I'd suggest any potential income will depend on the type of house and it's facilities. Smaller properties with limited facilities at the lower end of the market in areas that are predominantly British will be hard to rent. This is soon to become an extremely competitive saturated market. Larger properties with their own pool in these areas will I think become quite rentable, as many will soon be looking for holiday accommodation with a private pool. But I suspect rental values will drop significantly from post lockdown. So while there might be plenty of renters you won't be able to charge much.

Larger properties with pools in traditional Spanish resorts will soon become the money makers, being in high demand from Spaniards who will be "staycationing". But you will pay a lot more for these like for like that some of the typical British locations.

I have been looking for a property for a while now, I'd originally planned to use the money I've saved up plus a small mortgage to buy it. I'd planned to rent it to cover the mortgage. That plan has now completely changed. I'm now looking to only use my savings and not be reliant on any rental income. Eventually, I will still rent it out, but I won't need to income to pay for it. Any income generated will be purely the icing on the cake.

Ironically, as prices are now dropping significantly and look like continuing to do some for some time yet it's most likely I will still be able to buy the type of house I originally wanted, just without the need to borrow anything. So it's swings and roundabouts.

Either way, whatever you decide to do, take your time. The longterm effects of what we are presently going through haven't really even begun to impact things yet, when they do, in my opinion, it'll make the financial crash in 2008 seem like child play. I had planned to buy this Summer but I've postponed this for at least a year now, more likely two.

Davebev1

Posted: Sat Aug 8, 2020 10:00pm

Davebev1

Legendary helpful member

Posts: 1560

2200 helpful points

Location: Playa Flamenca

Joined: 7 Nov 2017

Posted: Sat Aug 8, 2020 10:00pm

The basic answer to your question is yes, but what you buy will obviously reflect the potential earnings, and what you can buy is determined by your budget. Hi demand for the right sort of property. Best to do as much of the marketing as possible yourself and use websites that allow you to screen guests before accepting the booking.

To back up what Ray D said, it is getting the Certificate of Compatibility from the Town Hall that is the biggest problem. Even if you buy a property that fits all the regulations it could take a couple of years to get the Certificate from Orihuela Costa Town Hall - no Certificate then no way you can apply for the license. In that couple of years, the community you are on may decide that won't allow any additional new licenses on that community so the Certificate is blocked.

IF, and it is a big if, you can find a property for sale that already has a Tourist License then the License is transferable to the new owners very simply and quickly. However finding a property that is in budget, in the right location, has good rental potential and with a License is a needle in a haystack job.

The other consideration is as a direct result of Brexit, the tax from January goes up to 24% on your gross rentals, which is a serious chunk of your income.

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