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Beach vacation rentals: How much can you earn renting a beachfront apartment in August?

The rental market on the coast, called either vacation homes or touristic homes, is flexing its strength recently, spurred by, above all, Internet portals.  According to a report from the consulting firm Ernst & Young, Spanish residences destined for this type of rental have the capacity for a total of 2.7 million rentals, with beach cities among the biggest epicenters.  This rising force has put forward an attractive touristic alternative to traditional ones, and is getting stronger all the time.

  • The average price for housing is around 595 euros per week for the month of August, 7% more than in 2014
  • This sampling offers a motley crew of prices (from 200 to 1,680 euros per week) and types
  • Rates tend to be established seasonally, so reservations ahead of time won’t necessarily be cheaper
  • ‘This alternative to traditional lodging in vacation season is not a fad, but a tendency’
  • Consult the tourism rental price map in the most expensive coastal municipalities of each province
Source: TecniTasa.  Prices for one week in August, beachfront, gathered May 2015.

The rental market on the coast, called either vacation homes or touristic homes, is flexing its strength recently, spurred by, above all, Internet portals.  According to a report from the consulting firm Ernst & Young, Spanish residences destined for this type of rental have the capacity for a total of 2.7 million rentals, with beach cities among the biggest epicenters.  This rising force has put forward an attractive touristic alternative to traditional ones, and is getting stronger all the time.

The savings in comparison with a hotel, the range of options for lodging (apartments, chalets, villas, etc.), and the comfort that a house provides (privacy, space, and flexibility) embody the background behind the home for rent, according to Carlos Fernandez, CEO of HomeAway for Southern Europe.  This firm, renowned in the sector, indicates that 30% of the Spanish have rented out a house for tourism purposes in the last 3 years—which jumps to 45% on the coast.
Fernandez points out that this type of rental “is gaining strength on the tourism scene,” as much on the side of demand as on the side of supply.  Fernandez notes that the number of national petitions grew by 25% in 2014.  “We have determined that vacation rentals are not a trend, but a tendency, and the biggest proof is that these rentals are continuing to increase in demand,” he declares.

 

The rise of renting homes for vacations is mainly reflected on the coast, and in the summer season that has just begun.  Thinking about this buoyant market that looks to the sea, TecniTasa has presented its annual report on the price of beachfront rentals in 2015.  In this study, the appraiser tackles, municipality by municipality, the evolution of the income from these properties, bringing to light the variety of the product.

The company has reported that the average price for a beachfront rental in the whole national territory will be 595 euros per week in August, 7% more expensive than in 2014 (552).  However, they note that “the availability of rentals in coastal locations is very heterogeneous, and, therefore, prices vary regarding aspects like type, area, provisions of the urbanization and details like if it has a garage or not.”

In this way, income on the cost moves between 200 (for an apartment of 60 square meters in the beach area of the Burela-Lugo locale) and 1,680 euros per week (an apartment of 70 square meters on Playa d’en Bossa-Ibiza).

 

“The most accessible destinations are the beaches of La Coruna, Lugo, Las Palmas, or Valencia, where you can rent an apartment without going over 290 euros per week,” TecniTasa says.  “Way above this price point and the national average,” they remark, “are the beaches of Ibiza, Sotogrande in Cadiz and Hondarribia in Guipuzcoa.”

These varied prices confirm another one of the strong points about beach rentals: something for every budget.  Fernandez praises houses for tourism, that the majority of families opt for, because they make longer stays possible than hotels do with their lower costs—seven days instead of three–.

The “star product” in this display is the two or three-bedroom apartment for two or more people with an area of 120 to 150 square meters, preferably in Andalusia—the community where the most homes are rented out for tourism in 2014 (21% of the total)–Fernandez states.  “The average budget for these rentals goes up to 540 euros per week,” he says.

 

‘If the home stays empty, it’s possible to see last-minutes sales’

Regarding how to get the cheapest prices, Fernandez says that this market has its own rhythm and rates tend to be fixed by season, independently of whether they are rented out a week or months ahead of time.  “The majority of owners fix their prices seasonally,” he says.  “Although,” he adds, “if the home stays empty, it’s possible to see last-minute sales.”

When talking about reservations at the buzzer, Fernandez distinguishes two realities.  On one hand, there are areas where you can negotiate a lower price with discounts of 20 to 40%.  And, on the other hand, he warns that in very requested areas, like Formentera, Ibiza, Figueras, Puerto de Santa Maria, Marbella, etc., the opposite happens.  “On these beaches, it’s most likely that rentals at the last minutes will be considerably higher than what you could have reserved three or four months beforehand,” he advises.

 

To finish up, Fernandez sustains that the offer of vacation rentals “is totally complementary to the hotel offers.”  “The differential factor,” he insists, “is that with renting, you get access to all of the installations in a house, and, being a more economical price, you can stay longer.”  “We are in a market where we all fit in,” he points out, demonstrating the collaborative regulation that the global evolution of tourism provides, and the vacation home is the answer.

Article translated and adapted from “El Mundo” national newspaper

 

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