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Property Rental Agents On The Make In Spain

Property Rental Agents On The Make In Spain

The holiday home that pays for itself from tourist rentals sounds great in theory, which is why property sales types deploy the argument with such enthusiasm. Nothing could be easier, they would have you believe. But in reality you have to be careful about renting out a property in Spain. Dodgy rental agents, tourist squatters, and dismal returns are lying in wait for unsuspecting holiday home landlords.

One of the biggest problems you face as a holiday home landlord in Spain, apart from the oversupply of rental properties, is finding a rental agency you can trust to pass on your full share of the rental income.

“I was using a agent to rent out my apartment in Duquesa, on the Costa del Sol,” explains Trudie Day, 47, from Surrey, who now lives in Puerto Banus. “I did the cleaning after each client myself because I live close by, so I knew exactly when the apartment was rented. Even so they didn’t pay me all the rent they owed me, and told me to prove it when I challenged them. I live in Spain but still got conned.”

Agents that rent on the sly and pocket the money are a serious problem, especially for absentee landlords who don’t visit much. But this swindle is not the only problem absentee landlords face. They also run the risk of unauthorised use of their property.

Helen Dalton, 38, from London, used to rent out her flat near Marbella through a local agency. It was only after the rental agency closed down that she noticed that her property was being used without her knowledge.

“Little things like towels and sheets went missing,” says Dalton. “Eventually it became obvious that other people were using our penthouse when we weren’t there. We changed the locks, but they broke in and changed the locks too. I arrived one holiday to find I couldn’t get into my own home.”

Dalton’s property ticks all the right boxes, and rents well to tourists. But to avoid ‘tourist squatters’ Dalton now has a long-term tenant paying per month what she could get per week in high season. “I’ll never get involved in tourist rentals again,” says Dalton. “You just don’t know who has the keys to your property.”

Stories of absentee landlords being ripped off by rental agents abound. “I’ve heard of rental agency staff using client properties without permission for all sorts of things, including family holidays,” says a lawyer based in Marbella. “If you don’t live locally it’s hard to know what is going on in your property. But that is a problem for absentee landlords everywhere, not just Spain. “

Nowadays, thanks to the internet, you can get round the problem of dodgy rental agents by doing it yourself. Holiday rental websites allow you to advertise your property to a wide audience, take bookings, and publish availability, all for a fixed monthly fee. “You save the 20% or more that rental agents take, and you know exactly who is in your property,” explains Ross McGowan, sales director of holiday-rentals.co.uk. “If you treat it like a business, and dedicate time to it, it can be very rewarding.”

Rental self-management won’t suit everyone because of the effort it requires, so a trustworthy rental agent is still the preferred option for many holiday home landlords. The challenge is identifying the good agents.

“Ask for client recommendations,” advises the lawyer. “Check rental agreements very carefully, making sure that the rental agent’s responsibilities are described in detail. Keep an eye on your utility bills so you know when the property is occupied, and check them against bookings.”

Hay, still seething from her experience, stresses the importance of getting written confirmation for each booking. “Without written confirmation you can’t prove anything,” she says. To avoid similar problems landlords need a rental agency with clear procedures and documentation for keeping clients informed of bookings.

Some owners choose to let out their properties on a long-term basis, thus avoiding the problems of tourist rentals altogether.

Unfortunately, rental laws in Spain favour tenants over landlords, so this option has its own risks. The eviction process is torturous, and it can take years to evict non-payers, especially if they have children. Landlords can lose thousands of Euros in legal fees, and lost rental income, if they come across a tenant who knows how to work the system.

Vince Barnes, 42, a professional musician from Newcastle, now living in Valencia, knows all about troublesome tenants as a landlord with a rental property near Gandia, to the south of Valencia City. “I’ve had enough of being a landlord in Spain,” grumbles Barnes. “Short term rentals are a pain in the neck, and when I switched to long-term lets the tenants only paid 4 months out of 9, did 2,000 Euros worth of damage, and left me 3,000 Euros out of pocket, not to mention all the time and aggro.”

Many rental agencies recommend using an 11-month rental contract to avoid the long-term contracts (12 months or more) that give tenants so much protection. But the reality is that 11-month contracts do not help landlords, who still have to follow the normal eviction process if tenants don’t pay the rent. Landlords should resist the temptation to change the locks or disconnect the utilities on troublesome tenants; this is against the law, and lays landlords open to legal action from their non-paying tenants.

Word of the cushy deal tenants get from Spain’s rental laws must have reached the UK. A growing number of Brits are taking advantage of the law to live rent-free in Spain, some of them in luxury apartments in glitzy hot spots like Puerto Banus. The Spanish press recently reported that some 26% of delinquent tenants in Spain are foreigners, many of them British, living rent-free in popular tourist areas. Now even the squatters are moving to Spain.

This article was written by Mark Stucklin, owner of Spanish Property Insight. Mark writes for the Times on Sunday as The Spanish Property Doctor.

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