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Working the Buy-to-Rent Numbers in Barcelona

Working the Buy-to-Rent Numbers in Barcelona

Strong demand from tourists and lower house prices mean that you can easily cover your fixed costs of ownership if you buy a second home in the Catalan capital of Barcelona and rent it out to holidaymakers when you aren't using it.

Tourism in Barcelona is booming, with record numbers of tourists arriving from more countries, all in need a place to stay. The number of hotel beds has increased significantly in recent years, but not enough to keep pace with demand. The majority of tourists choose to stay in private rented accommodations, much to the chagrin of the hotel industry.

Given that maintaining a second home in the Catalan capital typically costs around 200 euros per month, or 2,400 euros per year, according to a new study by Alquiler Seguro, a letting agency specializing in landlord protection (based on their own figures), rental income from holiday lettings can normally be relied on to cover fixed costs.

"Rental income of 100 to 150 euros per night, net of agency fees, are achievable in the high season for a nice apartment in the city center," says Quintus Snapper of the rental bookings site www.waytostay.com. "Occupancy in the high season can be 90 percent, which means between 2,000 and 5,000 euros per month rental income, depending on quality and location."

That's more than enough to pay the fixed costs of owning a second-home in Barcelona. What are the fixed costs of owning an apartment in Barcelona?

Fixed costs vary by property size and municipality, and generally speaking, the bigger the property, the higher the fixed costs. Some municipalities charge higher rates than others, even within a city like Barcelona.

This is how the annual fixed costs for a typical flat of 80 square meters in Barcelona breaks down, according to Alquiler Seguro:

  • Community fees of €75/month
  • Local property rates / taxes around €500/year
  • Home insurance minimum €200/year, but tourist rental insurance is likely to be considerably higher, including civil responsibility.
  • Utility contracts around €500/year.
  • Property maintenance costs around €250/year for the average property, not including repairs to communal areas that come along from time to time.

Total: about 2,400 euro per year, which you might be able to cover in just one month's income from tourist rentals.

But be warned that tourist rental laws in Spain have just changed, and you now need to register with the local government to engage in tourist rentals in Catalonia. In some areas of the Gothic Quarter you can't even get a tourist rental license, so be sure to do your research before you buy.

Mark Stucklin writes about Spanish property in his blog and in publications such as the Sunday Times. His labor of love is www.spanishpropertyinsight.com, a resource for buyers, vendors, and investors in Spanish property.
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