For many investors, investing in tourist accommodation is a great way to diversify your portfolio and generate passive income. After all, tourism remains one of the leading industries, especially in Spain. This makes this type of business very attractive to a large number of people.
In fact, in recent years there has been an increase in the sector of tourist accommodation. However, you can only capitalize on this opportunity if you plan carefully, considering all influencing factors. For this reason, here is a detailed guide that will give you all the information you need. [SEG 8] What is a tourist accommodation property?
regional regulations for holiday rentals in Spain classify it as a property specifically designed to provide short-term lodging services. The
concept of tourist accommodation property refers to stays that are typically brief. Generally, they do not exceed one month and are intended for recreational or tourist use. Furthermore, they are fully furnished and equipped with the necessary services to ensure a comfortable and pleasant experience. Furthermore, if you want to invest in tourist accommodation in Spain, you should be aware of the
types of investments that exist. Here they are: Tourist Apartments
self-contained units located within a building or residential complex offered for rent to tourists. They are equipped and furnished, designed for short stays. They are usually managed by companies specializing in tourist rentals.
In contrast, these are private properties rented out in their entirety for short periods. Additionally, they can be of different types, such as apartments, houses, or villas. They must also be registered in the corresponding registry of each autonomous community.
Furthermore, these are properties owned by private individuals that are rented out occasionally and non-professionally. This is usually done through platforms such as Booking or AirBnB, so they are governed by a unique set of regulations.
You might be interested in: types of real estate investments.
Holiday rentals offer high profitability, especially during peak seasons, when nightly income tends to be higher. This provides great flexibility to adjust prices quickly according to market demand; always respecting the respective local regulations.
Another advantage is the constant tenant turnover. This reduces reliance on a single person for rent payment and minimizes the risk of non-payment, as rent is usually paid in advance. Furthermore, it facilitates better care of the property, thanks to frequent inspections due to short stays.
Additionally, this option allows for a more personalized experience when compared to traditional hotels. This is because, as an owner, you can add special touches or extra services that enhance your guests' stay.
You must follow certain key steps to invest in tourist accommodation if you want to ensure success. Below, we will share some of the most important ones:
Before you begin, it's essential to be clear about what you want to achieve with your investment. First, ask yourself how much you expect to earn and within what timeframe. Additionally, you should set a date for making the purchase and break down the process into small, achievable goals, as this will help you stay focused.
Remember that in Spain, regulations vary between regions and municipalities, so you must know the specific local and regional regulations. Especially because they change rapidly. Therefore, you must always stay updated to avoid legal issues.
You cannot make a decision without completing this step. Therefore, evaluate the demand, competition, and seasonality in the area. Ensure there is sufficient tourist interest and that the market is not oversaturated. Finally, consider the variation in demand according to the season.
There are many real estate platforms and agencies for properties, such as Idealista, Fotocasa, or Habitaclia, but don't forget word-of-mouth. After all, many of the best deals come from opportunities through personal contacts and not from onlinesearches.
Use hospitality industry metrics like KPIs to calculate the investment's viability. If everything looks good and the numbers add up, then it's time to make an offer and start the purchase process.
Vacation rentals can be more profitable during peak seasons when tourist demand is high; however, don't forget to consider that this factor varies by location and seasonality.
On the other hand, tourist-use homes, which allow for longer stays, typically offer more consistent income. This is because they are exclusively dedicated to this type of rental.
For this reason, they ensure the property has stable occupancy throughout the year, especially during high-demand periods.
Investing in tourist housing is more profitable than conventional housing. However, this depends on several factors, as we already mentioned. In fact, in areas with a high tourist presence, you can generate significant income during peak seasons.
You should take into account several key factors that need to be evaluated to make informed decisions. Here are the most important ones:
Areas with high demand, such as cities or coastal areas, can ensure high occupancy, even considering that tourist areas experience fluctuations. Additionally, properties located in tourist hotspots command higher rental rates and attract more inquiries.
You should not only consider the purchase price, but also additional expenses like taxes, commissions, and notary fees. After all, the costs of maintenance and repair play a crucial role in ensuring the property remains attractive and functional.
The property size influences its profitability. Don't forget that smaller apartments often generate higher income per square meter due to lower maintenance costs. Additionally, because they can be rented at higher prices, they increase the return on investment.
Properties that are well-maintained and offer additional amenities attract more tourists. Additionally, a proper visual presentation, such as professional photos, can increase demand and justify higher prices.
Legal restrictions and local regulations vary significantly between communities. It's crucial to understand the specific regulations for each area to avoid legal problems and ensure compliance with tourist rental requirements.
Good management, including customer service and constant maintenance, reduces additional costs. Furthermore, it improves long-term profitability.
Don't forget that evaluating these factors is essential for calculating the profitability of a vacation rental. This way, you'll have a better chance of maximizing income and ensuring a profitable investment.
If the only decision you still need to make is the area in Spain where you want to invest in a vacation rental, here's a list for you. This way, making a specific decision will be easier:
This area has seen an increase in tourism since the pandemic, even reaching 14 million visitors in 2023; so much so that the government has even opened direct flights from New York. In addition to its beaches, it offers cultural attractions and activities almost all year round.
Sitges is another promising destination for investment, known for its beaches and the mountainous landscapes of Garraf Park. Although its vacation rental market has grown more slowly, it remains a highly visited area, especially by foreign tourists. It's ideal for combining beach relaxation and an active nightlife.
Seville proves that you don't need a beach to be an attractive destination. Its historic center, with monuments like the Alcázar, the Cathedral, and the Giralda, attracts both local and international tourists. Furthermore, visitors prefer vacation rentals over hotels, which benefits investors.
A popular destination that combines beach, culture, and gastronomy. Its climate allows visitors to enjoy the beach for most of the year, while its rich history and monuments like the City of Arts and Sciences make it even more attractive.
The Balearic Islands are a very popular destination, making them a great place to invest. Additionally, they boast a prime location with beautiful beaches and unique landscapes, as well as rich history and architecture. The city maintains a high number of visitors throughout the year thanks to its sunny days.
Barcelona is one of the most prominent destinations in Spain and Europe. The city is famous for its culture and architecture, featuring works like the Sagrada Familia; additionally, its gastronomy, nightlife, cultural events, and beaches make it a global attraction.
Another ideal destination for both tourism and investing in vacation rental properties; one of the first places tourists visit. Madrid stands out for its rich cultural offerings, which include museums, art galleries, theaters, and historical monuments.
Despite differences in demand and prices, all these destinations have the potential to generate steady income. You just need to find the place that best suits your needs.
Domoblock has various projects for real estate investment in Madrid, real estate investment in Alicante, real estate investment in Zaragoza and Real estate investment Valencia. Check it out!
Before investing in vacation rentals definitively, you should review these questions to help clarify common doubts:
When you rent out your vacation apartment, guests can only stay for a period not exceeding 31 days.
When paying taxes to the Treasury for a vacation rental, both rental periods and availability periods, known as imputed real estate income, must be considered.
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In this case, you could receive a fine ranging from 50% to 150% of the undeclared amount.
If you don't obtain your license, you could be fined and your property might be temporarily or permanently closed.
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Investing in tourist housing in Spain can present many challenges, especially if you don't know how to do it. However, you just need to be properly informed and do it with the help of a team of experts to ensure your success.
Convento San Francesc, 5
Funded
100%
€676,972.00
Target
€676,972.00
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