The average rental cost in Madrid for a house of around 85m2 is 1,220€, which is the highest in Spain. This is maybe not surprising as Madrid is the capital of Spain. Following closely behind id y the Balearics, with an average price of 1,170€ for a similar property. The Basque County, comes in 3rd, where a similar abode will set you back 960€ a month.
Rising prices mean there are many benefits to buy a house with the intention of renting it in certain areas of Spain and, according to property market experts, the rental Spanish market will continue to increase in 2019.
The rising price of Spanish real estate makes the country and interesting prospect for both Spanish and foreign investors, especially when it comes to tourist rental.
The reason this market is emerging is the price of housing is rising much faster than the purchasing power of the average Spaniard. The increase in property prices in 2018 grew by more than 6% but the average wage only increased by 0.8%.
In an attempt to control rental costs, the Spanish government has introduced measures to support stability for long term tenants…
- The contract period for long term rental: The previous 3 years term is increased to 5 or 7 years, depending on if the property is owned by a company or individual. When the term is up, if neither party wishes to terminate the contract, a 3-year extension is granted, instead of the previous one year..
- Tourist Rentals: Neighbours can now have a say in granting tourist rentals if there is a vote of 3/5 against a property in the neighbourhood permitted to be rented for short term lets to tourists. This rule can not be applied retroactively so won’t affect current permits for tourist rental properties. With the agreement of the 3/5 of the owners community, it can be decided that the owner of the tourist property pays a surcharge on the annual community fees. The increase in cannot exceed 20% of what the other neighbours pay.