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Article copyrighted © 2020. Plagiarism will be criminally prosecuted.
By Raymundo Larraín Nesbitt
Lawyer - Abogado
11th of September 2020
Although I’m guilty as anyone of reporting the negative impact of Covid-19 in the Spanish real estate market, the fact is that it has also opened up a slew of new opportunities well-worth looking into.
I had already reported at large in previous articles how the virus outbreak has created a number of singular buying opportunities for savvy investors with steep discounts (understatement).
Likewise, it has also created unique opportunities on renting out in Spain, specifically long term. In today’s blog I’m going to expand on how the pandemic has opened up new opportunities on renting out long term in Spain.
Before the epidemic hit Spain, long term lets were hard to come by and were largely overpriced. This is because landlords were focused instead on the hugely profitable holiday rental market. However, due to the ongoing pandemic, holidaymakers shunned Spain this summer mainly because of the pesky quarantine requirements back in their home countries. Now that the new reality has sunk in, landlords have swiftly shifted gears and are viewing long term rentals with renewed love & interest.
There is a huge untapped latent demand for long term rentals. Which goes on to explain why landlords have flipped over en masse to long term instead. This huge influx in supply of long term rentals has (greatly) impacted the market, dragging down prices significantly. As Spanish daily El Mundo reported this week, lets have dropped by 50% in Ibiza.
Shrewd tenants can now bag themselves a two-digit discounted rental in prime locations in Spain i.e. Marbella and Balearics. This is nothing to scoff about, as when you sign a long term lease - by law - you can remain up to five or seven years in a property (even eight or ten years, depending on whether the landlord is a physical or legal person and also if a silent renewal is triggered).
Securing a lease contract at a huge bargain price on a prime location for an extended period of time almost sounds too good to be true, but it’s happening right now. This is one of many untold positive consequences of the virus outbreak in our real estate market. I dare say it really is a once-in-a-lifetime opportunity.
The pandemic will be over in a year or two, confidence will return, and the market will rebound strongly, as it always does when it overreacts. The pent-up demand for rentals in Spain cannot be overstated enough.
And when all is said and done, and the dust has settled, your rental contract will continue to go on unfettered for many more years after the epidemic is over, at a huge discount; well-below its true market value.
This (unique) market opportunity is of particular interest to:
As the Chinese say, “Crisis is an opportunity.”
If this is not a great market opportunity, then frankly, I don’t know what is.
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Article originally published in Spanish Property Insight: Good news: Huge bargains available in long-term rentals in Spain
Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. VOV.
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