Throughout its 2,000 years of history, Barcelona has become one of the most attractive and cosmopolitan cities of Europe. Its combination of fantastic culture, ideal climate and picturesque coastline has resulted in an abundance of tourists choosing the city as their next holiday- or working destination.
This, in turn, has led to an increase of people seeking to rent an apartment in Barcelona, which has allowed property owners a generous rise on their investments. No less than 19.1 million tourists spent their 2017 holidays in Catalonia – a 5.5% increase compared to 2016’s statistics. Americans visiting Spain increased by 27.9%, followed by 22.7% more Russians and 7.3% more Dutch. This resulted in the country receiving 19 billion euros from visitors, 9.1% more compared to the previous year.
It is well known that rental properties in Barcelona contribute greatly to the country’s capital, yet the latest statistics firmly reinforce this fact.
But what are the different options for those wishing to rent an apartment in Barcelona? And how does it affect the property owner?
Property rentals in Barcelona can be grouped into three categories: short-, middle-, and long-term.
Regardless of whether the tenant is renting an apartment, loft or house, if their rental stay is for fewer than 31 nights, it is classified as a short-term rental. With Barcelona being a popular holiday destination, many short-term rentals are geared toward the tourism market, and may work out more costly for those wishing to remain longer.
If the property owner is a Spanish resident and their stay in the country exceeds 183 days a year, they are required to register “Autónomo” or “self-employed” and pay Social Security contributions. All holiday rentals are subject to 10% VAT (IVA). This is frequently added to the rental tariff, and must be reflected on all invoices and accounts.
It should be noted that short-term rentals are only possible for tourist licence accredited properties. This document, known as the HUT licence (Habitatges d’ús touristic), was originally implemented in 2012 as a response to the increasing numbers of international visitors to the city. Due to recent restrictions – PEUAT (Plan Especial Urbanístico de Alojamiento Turístico), the Barcelona City Council is no longer granting further licences within the central and touristic areas of the city, such as Hostafrancs, Vila de Gràcia, Eixample, Sant Antoni, Poble Sec, Ciutat Vella, Vila Olimpica and Poblenou.
This leaves the property owner who wishes to establish a short-term rental business in the city centre with the option to purchase a property which has already been awarded a licence.
Those wishing to rent an apartment in Barcelona for longer than a month (such as students and people with short-term work contracts) can opt for a mid-term rental. Any mid-term rental has a period between 32 days to 11 months. Utility costs are usually included in the rental price (however, the owner may be expected to cover the fee of a cleaning service after the renters have vacated).
Mid-term rentals offer various advantages for the property owner:
- They can be prone to higher rent than long-term options (20-30% more)
- Since the tenants are usually foreigners wishing to stay for less than a year, the risks of possible trouble and/or eviction are minimised
- As the full security deposit is kept by the owner, the possibility of property damages not being covered is minimised.
However, due to the high turnover of tenants, there exists the possibility of the apartment being vacant for periods of time, as well as an increased chance of the property being worn out over time.
It is no secret that long-term rentals are the most popular choice, considering how it provides a stable income for the property owner. A standard long-term lease is for one year, and the tenant automatically has the right to renew each year for up to five more years.
Long-term rentals provide plenty of pros for the property owner:
- They cost less to advertise, bear no changeover fees, and are less likely to be damaged by occupants.
- Tenants who want to leave partway during the first year are obliged to pay until the end of the 12-month period.
- No specific licence (i.e. HUT) is required for long-term rentals.
- Tenants are responsible for utility costs such as water, electricity and gas.
- Property negotiations are becoming less frequent, meaning more power for the owner/landlord.
- Tenants are liable for the agreement costs between the owner and letting agencies (usually 10% of the annual rent).
The disadvantages of long-term rentals include:
- Lower profitability than mid-term rentals
- Possible troubles for evictions (tenants can only be given notice in rare and specific circumstances).
A one-to-two month deposit is required for all rentals, as well as general documents (such as bank statements) proving the tenant’s capability to cover the rent.
Property management companies are in abundance in Barcelona and are quite capable of handling short- and mid-term rental contracts; yet, should the owner have adequate time on their hands, this can be managed themselves. For long-term rentals, a real estate agent is sufficient for all the paperwork. And although there is no fee involved, certain agents may request an exclusive agreement with the property owner for their free services.
Considering the various advantages of living in the city, long-term tenants seeking to rent an apartment in Barcelona are spoiled for choice. The right property in the right location can definitely become a profitable investment for those wishing to enhance their monthly income.
For additional information on property rentals, see: The Investors´ guide: Renting out your Barcelona property.