Why is it better to rent your property for a short-term rather than renting it for long-term?
Are you an apartment owner in Barcelona, or considering to become one, and looking to maximize your investment, renting your apartment to vacationing tourists?
Of course, to do that, you need to make sure that your apartment has a valid license number. If you are not sure how to check the validity of a touristic license number, do not hesitate to get in touch with us. Renting its apartment to tourists in Barcelona is something a lot of owners desire to do because dedicating an apartment to short stays can be lucrative, much more than a traditional long-term contract.
To do that, you need to make sure that your apartment has a valid license number. If you are not sure how to check the validity of a touristic license number, do not hesitate to get in touch with us. The recent spike in demand for short-term apartments is said to have hit 33% in the last few years. This increase in demand drove the prices of touristic apartments up for a simple reason: since 2014, the number of touristic apartments in the city of Barcelona has not grown.
Which means that the 9,600 apartments that can be used for short stays in the city have to satisfy an ever-growing national and international demand. Hence, being more and more profitable for their owners.
This, coupled to the fact that the Town Hall of Barcelona is still very much fighting against frauds from apartment owners illegally renting their apartments to tourists, an infraction that can be fined of up to €60,000. Barcelona has indeed seen a high demand for short-term rentals by travelers coming to the city for business or/and pleasure.
During the Mobile World Congress last year, Airbnb stated that they predicted that 45,000 attendees, 40% of the 110,000 expected, would be booking an Airbnb and spending a whopping €5 million through the platform, for what is considered to be, one of the most expensive weeks of the year in Barcelona when it comes to the pricing of touristic accommodations.
So is dedicating an apartment to short-stays, when having a valid license, a no brainer? Let’s have a quick look of the pros & cons associated with the use of holiday rental:
- More flexibility: If you want to use your apartment to stay yourself or accommodate any friends or family, it is possible to just block the calendar when needed. As opposed to apartments rented on a traditional long-term basis that cannot be used by the owners before the end of several year-long contracts.
- Higher rental Income: As explained above, the demand in touristic apartments in Barcelona is high and are therefore generating a higher revenue than apartments without a licence. The possibility to fluctuate the prices depending on the seasonal demand is a big opportunity to make the most out of its apartment.
- More control over the property and avoiding big maintenance costs: Having new guests coming and leaving the apartment every week or so, gives the opportunity to maintain it very well. Having an in-depth monthly inspection and fixing minor issues at a small cost, rather than having a bad surprise when a tenant leaves the apartment after living there several years.
- Non-Guaranteed income: Income is not fixed and changes according to the seasonal demand which is directly affected by countless factors. When everything is going alright: fantastic! But negative events in the city can have a negative impact on the revenues.
NOTE: At Stay U-nique we also give the option to the owners to be paid a fixed rent, instead of having a rent that varies with the seasonality.
- Competition from surrounding properties: Barcelona is considered to be as one of the most touristic cities in the world. The holiday rental industry in Barcelona that was still very young 5 years ago, is getting more and more professional. It is therefore important to always keep improving its services to stay in the race and be able to get the best revenues.
- Management of maintenance: The short term rentals often includes smaller damages & can require maintenance work after the guests leave the apartment. Some of the small maintenance costs such as new light bulbs or unclogging drains are covered by the owner instead of the tenant if it was traditional rent. Those costs are usually low but have to be dealt with quickly in order to give the best possible experience for the guests.
- Headaches and 24/7 availability: this only qualifies for owners managing their apartment themselves. It is one of the legal requirements when dealing with a holiday rental, the manager has to be reachable 24/7 in case of emergencies. Property management companies are taking this burden off of the apartment’s owners.
Owning a touristic apartment in Barcelona is of course still a great opportunity to have a great source of revenues. But compared to a few years ago, property owners need to put more effort into their touristic apartment. This is mainly due to the fact that guests now expect a more professional service, even on Airbnb, and it is important to meet their expectations in order to get the best reviews. It is only by consistently receiving the best reviews that an apartment will be able to sell for more than the competition, and outperform in terms of revenue.
What about you? Are you sure that your apartment is generating as much as it should?
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