All About Investing in Short-Term Rental Properties in Spain

It is possible to gain remarkable profits from your property investment by renting it. Spain showcases amazing opportunities to turn a real estate investment into a great source of income. Let’s talk numbers.

Spain’s tourism industry hit a record revenue of 159 billion euros in 2022. The same year, Spain welcomed over 70 million tourists by leaving countries like the United States, Greece, and Italy behind. Thanks to the high touristic demand of the country and perfectly margined market, it is a promising chance to earn a living while buying an immovable asset.

The main attractions that draw millions of tourists each year are the country’s laidback lifestyle, colorful cultural habitat, and breathtaking coasts stretching for hundreds of kilometers. Plus, the sunny climate allows people to enjoy the Mediterranean dream in Spain all year long, even in the winter.

These key advantages make Spain not only a perfect place for a summer vacation but an all-year-round destination. Some holidaymakers may even choose the off-peak season especially, just to be able to pleasantly indulge in less crowded activities.

As the second most attractive touristic destination in the world, tourism significantly impacts the Spanish economy, accounting for 12% of the country’s GDP. With millions of tourists visiting Spain every year, quality accommodation is always needed. And this brings us to short-term rentals, which present a remarkable income potential throughout the year.

At this point, property owners are blessed with two exceptional investment opportunities. The first one is to buy a home in Spain to spend winters in a warm Mediterranean country and rent their home in summer. Renting a holiday home in the high season will maximize earnings.

The second one is to spend their summers in Spain and enjoy living their best lives and rent their holiday homes while they’re away. This is a great way to turn a situation into an opportunity and make money out of an empty space.

What a charming idea, isn’t it? In this article, we’ve gathered everything you need to know about renting your property in Spain.

Is It Legal to Rent Your Property in Spain?

Yes, you can legally let your property for both the short and long term. Most short-term rentals are mostly operated by lease management systems like Airbnb, or other local platforms.

In some countries, certain short-term rental platforms are not allowed. This brings the “Are Airbnbs legal in Spain?” question to mind. The answer is also yes, Airbnb rentals are completely legal in Spain.

When it comes to short-term rentals, it is essential to know the answer to the question “What is considered a short-term rental in Spain?”. In short-term rentals, the occupation must be less than 3 months. Also, property owners must register with the Tourism Registry of the region and meet certain criteria determined by the local authorities. The Airbnb regulations in Spain may differ from one autonomous community to another.

Where to Buy a Rental Property in Spain?

The most advantageous places to buy a home in Spain and rent it are the seaside coastal regions, stretching along the Mediterranean shore.

When it comes to renting your property for the short-term, demand plays a major role in the future of your investment. Demand is deeply linked to the location, which brings us to the Spanish costas.

Spain’s seaside settlements are the highly preferred vacation destinations of the country, especially by foreign tourists. Each dwelling nestled along the coastline appeals to different kinds of interests. Most people who look for a comfy, cozy holiday experience choose Spain’s coastal cities.

Metropolitan cities like Madrid or Barcelona are also at their peak among tourists. However, they can be an overwhelming choice to own a property because of the price-quality ratio. These mainstream cities may be a bit overpriced and crowded for people who look for a laid-back vacation.

Instead, less-crowded seaside cities like Alicante or Málaga stand out more as joyous holiday spots and draw more attention in recent years. Spain’s tourist profile in general tends to spend their summers in relatively smaller seaside resorts on Costa del Sol, Costa Blanca, or Costa Calida.

So when analyzed by considering the price-quality ratio and demand potential, Spain’s coastal regions are the best options to buy a holiday home in Spain and rent it. There is also a wide range of property options since the construction market has channelized its focus to the coastal regions. Because of the competitive prices on the property market, it is quite easier to find a quality home on a budget in a Spanish Costa.

However, the best choice would be to consult a professional who is familiar with the local market. A local expert would have full knowledge of the best deals at the moment and highly demanded areas of recent years, which would have a significant impact on your investment.

How Can I Rent My Property in Spain?

Property owners in Spain can easily rent their property after handling a few legal formalities. The main condition is to get a license to rent your property by registering with the Spanish Tourism Registry Office.

Registration might be an intricate process if you don’t speak Spanish. Having a consultant, or someone who is familiar with the Spanish legal system, may come in handy at this point.

Some autonomous communities such as Andalusian Community accept online registration, and some require application in person. It would be better to get in contact with the local authorities where your property is located beforehand.

The license may be granted within a few months. In some cases, it can take up to a year to be finalized. The property will get a license number to operate with it legally. If it is detected that the property is rented without a registration number, the property owner might pay heavy fines of up to € 150.000.

For registration, authorities may require a report, specially prepared by the professionals. This report determines whether the property is fully compatible with certain necessities of tenants during their stay or not.

For every tenancy period, even for a single overnight stay, there should be a separate rental agreement that is identifying tenants. Contract samples are easily findable online. It is also possible to prepare a contract under the supervision of a legal consultant.

How to Manage an Airbnb Property in Spain?

Property management for Airbnb in Spain requires time, budget, and strong management skills. It has various aspects to focus on, from organizing the calendar to handling guest communication and check-in services for Airbnb in Spain. It is a full-time occupation that needs a lot of attention to detail.

A lot of property owners prefer working with an Airbnb management company in Spain. There are lots of benefits of hiring a property management company for your Airbnb in Spain. If you buy a holiday home in Spain and plan to rent it while you’re abroad, it would be best to work with an expert rental management company.

These companies provide extensive property management services in exchange for a certain amount of commission. The commission rates vary depending on the property and the context of the service they provide. Most holiday rental management companies in Spain work with around 20% management fees.

A rental management company would handle all the property maintenance on the owner’s behalf. These professionals handle everything from A to Z. These include tenants’ urgent needs, or maintenance issues to professional cleaning services for Airbnb in Spain.

In this way, you can sleep with a clear conscience at night, knowing your property is looked after properly. You can make sure that your money is safe and your customer is happy.

Know Your Opportunities!

Are you planning to become a property owner in Spain? It might be good to know your rights, options, and opportunities that come within. Check out our blog page, and find out everything you need to know about being a homeowner in Spain!