You own a property in Mallorca? It comes as no surprise that the buy-to-let industry in Mallorca is very popular. The island receives millions of visitors every year looking for a retreat to paradise. Many tourists want to stay away from busy hotels and opt to rent property around the island instead. Current homeowners and potential property investors have a unique opportunity to enter the buy-to-let market. Maybe your property in Mallorca is your second home and you only spend a couple of months in it every year. Maybe you’re an island native but you love to travel, especially with looser travel restrictions in place. It’s possible that you don’t want your property simply sitting empty and collecting dust when you’re not enjoying it. So whether it’s your own personal property or an investment property in Mallorca, it could be worth it turning into a rental.
While this could be a worthwhile decision, it is still a bit of a process to take on. So if you’re considering going down the rental property route, here are some things to think about before you start.
Pros & Cons of Owning a Holiday Rental
- Passive income – Passive income is a way to make money with little to no “active” work, such as owning a rental property. To illustrate: your property in Mallorca sits without any use when you’re away for long periods of time. During this time, you are still paying for the property, bills, and upkeep. When you rent the property out, you are making money back. To take care of these costs while also making a return on your investment.
- Large amounts of tourism to the island . A big positive of renting out a property in Mallorca is that the island is heavily visited by tourists. In fact, 1 in 5 visitors to Spain chooses to come to the region. Because of high tourist numbers, there is a large and strong market of people seeking rental properties.
- You get to own a property in Mallorca in a beautiful location. Although your property may be on the rental market, it is still your property. You can decide when you want to rent it out or when you want to enjoy it for yourself. You’ll always have a home to return to in one of the most beautiful and beloved regions in the world.
- Allowing others to enjoy your beloved property in Mallorca – Many travelers mention their holiday rental as a large part in their positive vacation experience. Your home could potentially be a highlight of a visitor’s holiday. This could mean return visits, and even regular rentals from happy holidaymakers. Also, as they say, sharing is caring!
Cons of owning a property in Mallorca
- The upkeep – This is normal when owning a property in Mallorca, especially a second home. However, there is more upkeep than normal with guests rotating through. This includes regular maintenance of the lawn and amenities such as pools and spas. A holiday rentals requirement is that they must provide guests with towels and sheets, which must be regularly cleaned. Although homeowners can do the upkeep themselves, many hire property managers and services to take care of these things. This comes at an extra cost. These are small but important details to keep in mind.
- Unexpected costs – Accidents are bound to happen in a home. However, the chances can increase with different people filtering through your place. While the possibility is still slim, it is possible that damage can occur to the property when it’s being rented.
- Off-season in Mallorca – While the island is buzzing during the warm summer months, rental rates slow down during the winter. Generally, people still come to visit during these months for a winter holiday. However, it is quite a drop from the busy summer months. This is something to consider when planning to rent your property in Mallorca. You should also consider this when planning out rental rates to make sure the property is lucrative all year long.
- Taxes and fees – Turning your home into a rental property means dealing with the government. Consell de Mallorca has regulations in place regarding licensing as well as holiday rental-specific taxes. You can read more about them in the section below.
Holiday Rental Regulations in Mallorca
A home on the island is considered a tourist rental when the entire property is rented for extended periods of time. The maximum rental period is one month. In order to get your home on Mallorca’s holiday rental market, first, you must obtain a holiday rental license. This license is necessary for all property types – flats, terraced houses, townhouses, detached and semi-detached houses. There is a zoning plan throughout the island that regulates where and what type of certain tourist rentals can take place. If you are a current homeowner looking to rent out your property, it is really important to locate your zone. Likewise, those on the hunt for their own property must keep this chart in mind while choosing a location to buy.
On top of a holiday rental license, you must also get an Energy Efficiency Certificate for your property. This certificate must be available to tenants. And rental properties are not exempt from any additional taxes. The Spanish government requires all rental property owners to declare a tax for their property. This applies to both Spanish and non-Spanish residents alike. The rate is around 24-25% of the rental income.
Tips for Property in Mallorca
- If you haven’t yet purchased property but are interested in doing so, check out our recent blog posts that help guide you to buying property abroad and find your dream holiday home.
- Once your property is certified as a holiday rental, you can use booking channels such as the ever-popular Airbnb to list your home. These channels can help boost bookings. Find Airbnb tips and advice on our blog.
- It is good practice to hire a lawyer on the island. Mallorca has lots of attorneys who speak many languages and can help you navigate the legal process.
- It is very important to find a trusted real estate agency to help you with the process. Here at Soller Properties, we are more than happy to help! Contact us for more information.