Do you have an empty house and you don’t know what to do with it? Do you only occupy your second home during the summer months? There are many reasons why many owners decide to put one of their properties for rent. This is a practice that is gaining popularity and assures you of a steady income, especially if the property is in a high-demand area. In this article, we explore the advantages of putting your house up for rent and why it’s a smart decision for that property that may otherwise give you some headache.
House for rent: All the advantages
Here are the main benefits of putting your house up for rent.
One of the most attractive reasons why homeowners decide to rent their homes is to generate additional income. If you calculate well the monthly payment that you need to ask for the rent, you will obtain enough benefits to cover the installments of your mortgage (in case it is still in force), the possible maintenance expenses that can arise and, in addition, to have a source of passive income. This will mean a financial stability that will give you peace of mind in times of economic uncertainty such as the current one.
In addition, if you rent your house on the Mediterranean coast, you are almost guaranteed to have it 100% occupied. The Spanish coast is very demanded by foreigners to spend their retirement or the winter months near the sea and with better climate than in their countries of origin.
In Spain, there are tax benefits for having a rental property that may also vary depending on the region where the activity is carried out. In state terms, the new Housing Law establishes that, as from 2024, whoever has a rental property will be able to benefit from a 50% reduction on the net yield (currently it is 60%). Thus, the remaining 50% of the yield will be taxed. According to the OCU, these changes will affect rental housing contracts signed after May 26, 2023. The 60% reduction will continue to be applied to previous contracts. Benefits will also be applied for lowering the amount of rent in ‘stressed’ markets.
We advise you to contact professionals so that they can advise you in the best possible way and get the best conditions when renting your house.
Increase in the value of the property
Real estate properties tend to gain value over time. So, if you put your house for rent instead of selling it, you will be able to benefit from this appreciation in the long term and, if in the future you decide to put it for sale, you will earn more than if you sell it today.
Let’s not forget, also, that keeping the property is a plus. If you are considering taking out a loan, for example, you will be able to obtain better financing conditions, since the property will act as a guarantee before the bank. And if you eventually want to use the property, you can do so as long as you respect the clauses of the contract.
Maintenance of the house
Having an empty house is usually synonymous with neglect. When it is not used, the equipment ends up in bad condition and it usually ends up in almost abandonment. However, renting a house makes us take care of it and maintain it as well as possible to make it more attractive to potential tenants. In addition, an agreement can be reached so that the tenant is responsible for certain repairs or maintenance while living in the house.
Adaptation to the market
Also looking at the long term, renting your home allows you to wait until the market conditions are the most convenient for you to sell. For example, in the context of a recession or crisis, you can rent your home to obtain a certain return and let time pass until the market stabilizes and prices rise again. This way, you can avoid rushing and gain time and perspective to make thoughtful and informed decisions.
Also, since rents are often tied to inflation, you can raise your rent in line with the CPI and your income will increase as the cost of living rises.
As you can see, putting your house up for rent has many advantages worth considering. If you have a property or want to buy to rent, at Sonneil Additional Services our real estate experts will advise you in depth so that you get the best conditions and maximize your benefits.