Buying a rental property in Lanzarote
Popular areas:- Puerto del Carmen, Playa Blanca and Costa Teguise.
Great year round climate
Notary system
Long term property rental – Less income and less effort
Holiday rental property – More effort, more out goings, keep guests happy
Learn the system and be informed of all costs
Buying a house for holiday rental or long term renting in Lanzarote
The decision to buy a property in Lanzarote for holiday rental and long term rent is a tough one. There are lots of factors that come into play that will directly affect your decision as to how best retain an income from your property in Lanzarote.
Below is an in depth and informative article on all the aspect to consider when making your decision.
In summary a holiday rental property on Lanzarote will give higher income but for more effort. Long term rental properties will return lower income but with the right tenants, for less effort.
If you do not live on Lanzarote a holiday rental property will need a holiday rental agency. Holiday rental property agencies take the stress out of renting your property but also cost money reducing your income.
Read over the following article and make an informed decision on how to best proceed.
Where buy a rental property in Lanzarote
The best place to buy a rental property in Lanzarote will greatly depend on your budget and requirements.
Lanzarote has a full year round tourist season due to its amazing and dependable climate.
Rental income from both long term and holiday lets are both viable options.
The self regulating weather patterns make for comfortable and warm temperatures twelve months a year. The reliable warm weather and low rainfall bring tourists to the Canary island of Lanzarote all year. Holiday makers visiting throughout the year carries over to holiday accommodation being in demand far more than any other European destination.
The best places to buy are the areas that you like yourself. Most demand is in a main tourist resort but there is also more competition. The main tourist resorts of Lanzarote are Puerto del Carmen, Playa Blanca and Costa Teguise.
The amazing year round climate of Lanzarote
The Lanzarote year round month to month average temperatures only drop to a comfortable 17 degrees centigrade in January and up to 24 degrees centigrade in August and September. Rainfall averages just one a two days a month in winter and zero days of rain throughout summer.
Best place to buy a holiday rental property in Lanzarote
The best place for you to buy a property that can earn you a holiday rental income in Lanzarote will depend on the type of tourist you target. If you wish to use the property for your own holidays try out some different areas of the island and see which you prefer. Buying a house in an area you personally like will also attract guests with similar tastes to your own.
Best places to stay in Lanzarote
The most common places for mainstream tourists to holiday in Lanzarote are the three main tourist resorts of Puerto del Carmen, Playa Blanca and Costa Teguise. Properties in these areas have higher average prices but demand is greater. Demand is greater but so is competition from other rental houses in these three main Lanzarote tourist resorts.
To help with your income logistics get an idea of the average rental incomes of different sized properties from the famous online holiday rental web sites. You can not only get an idea of the sort of nightly rates to expect but by looking at the availability calendars you can see anual occupation figures.
Setting the daily holiday rental price of your property
Figuring out how much to charge per night for your holiday rental accommodation is critical. Charging too much will reduce the amount of night the house is rented for. Asking for too little per night for your holiday home will also reduce your income.
Periods of time with no tenants and no rental income are very hard to recoup. Holiday rental website display properties in price order. If you house is way down the list you will not be seen and lose income. Setting the nightly rate a few euros less may keep you ahead of the competition and give far better results.
For example if you are charging 100 euros per night thus full occupancy gives you 700 euros per week but the competition also charges the same.
To have 2 nights per week empty will give you 200 euros per week less income. To regain the 200 euros loss of income will take a long time to recoup.
You then set your nightly rate at 95 euros per night and get ranked ahead of the competition asking for 100 per night. You lose 35 euros per week instead of 200.
Other advantages are you then get more rentals and hopefully better reviews and then rank higher.
The above is especially true for those starting out into the holiday rental market.
Using a holiday rental property company or agency
If you do not live on Lanzarote, or have contacts that do live on the island and are happy to help, you will need to services of a Lanzarote property rental company. A property rental agency will take car of rentals, tenants problems, house repairs and leave you free to enjoy the income the house produces. The downside is that the services of a professional holiday rental agency come at a cost.
If you wish to use the house for parts of the year and make your own bookings for the house remember to discuss this with the rental agency beforehand. There are many good and professional holiday rental companies on the island that will specialise in the area you are looking to buy.
Importance of holiday rental property reviews
Getting good reviews for your property will make or break your income. Bad reviews will cost you thousands in lost income. Holiday makers check a properties reviews and star ratings religously. Five star rated holiday rental properties get far more business than four star or lower rated properties.
Keep the house in top condition. Answer any tenant questions as soon as possible.
Keep the holiday rental app on your phone to get instant updates and make faster replies. The holiday rental website rates you on speed of answer and ranks your house accordingly.
Remember the client is always right. Never be combative towards your tenants, they are in a strange country and depend on you for assistance and support. Flex to your tenants needs and they will probably give you a good review.
Popular rental property locations outside the main tourist resorts
If you are looking to buy a Lanzarote holiday rental property, long term rental property or permanent residence outside the tourist resorts here is a list and summary of other popular locations:-
Arrieta – originally a fishing village with nice beach.
Punta Mujeres – quaint old fishing village with rock swimming pools.
Orzola – Northern tip of Lanzarote. Fishing harbour with ferries to La Graciosa and nice beach.
Haria – Historic inland town. Green and fertile with good walking.
Maguez – Neighbouring town to Haria. Secluded and quiet. Good walking.
Famara – Relaxed fishing village turned into a surf town. Amazing beach backed by dramatic cliffs.
La Santa – Fishing village and surf destination for experienced surfers.
Tinajo – Historic farming area, still very authentic and relaxed.
Uga – Quiet town to the south.
Yaiza – Historic town with some good bars and restaurants.
Las Brenas – Quiet town with good views to coast.
There are also many other locations to chose from to buy a property, just get a hire car and explore the island.
Best place to buy an investment property in Lanzarote
The property market in Lanzarote is strong and stable at the moment. Since the end of the COVID era property in Lanzarote has gone from strength to strength. Many people are now prioritising quality of life and looking to spend more time in good weather on holiday.
There are many up and coming property locations in Lanzarote that are worth checking out.
The most popular locations to buy an investment property in Lanzarote are topped by Puerto del Carmen, Playa Blanca and Costa Teguise.
Famara has grown very quickly for beach lovers and surfers. The capital of Arrecife is very affordable with some good locations.
Lanzarote has become a popular destination so good property investments are available in many locations across the island. A good strategy is to go online and get an idea of the going prices for the sort of property you are interested in. New properties and property developments that suit your needs can appear on the market at any time. Contact some estate agents with details of what you are looking for and they can let you know as soon as something of interest comes up for sale.
Long term property rental in Lanzarote
Long term property rentals in Lanzarote definitely have some advantages over holiday renting your property.
The areas you can buy a long term rental property are more varied as you will be renting to Lanzarote residents.
The cost of a long term rental property can be less.
Tenants living in a long term rental property will be far less demanding than a holiday rental tenant.
Holiday rental tenants demand instant actions twenty four hours a day for any issues. Water leaks, electrical issues, key loss, accidents all have you on 24 hour call out to make an instant resolution. Being constantly on call for your tenants needs can be stressful and tiring adding a hidden cost to holiday renting a property.
Holiday renting over long term renting has lots of hidden costs. The property has to be kept in top condition. Decoration, furniture and amenities have to be perfect less you get a bad review and a drop in future reservations.
Long term rental occupants will often resolve any issues themselves subtracting any costs from rent owed. Long term tenants often take care and pride on the house keeping it decorated, clean and tidy.
Electric and water bills are less with long term tenants who are not going out every night or returning from the beach, using more water and electric.
Holiday renting a property requires a lot more paperwork and accounting costs than a long term rented house.
It’s important to weigh up the pros and cons of long term renting versus holiday renting to then make an informed decision on which option suits you the best.
Property investment strategy for maximum return in investment
The key to making a good investment in the Lanzarote property market is preparation and information.
Have a good idea of the going prices of different property types in the areas of Lanzarote you wish to make your property investment.
Research the type of rental incomes you can expect to make. If you want to do holiday rentals find out the average daily rental incomes and the level of occupancy.
Find the right property that suits your needs.
How the Lanzarote property buying process works
The property buying process in Spain is different to that of the UK. Buying houses in Spain and Lanzarote goes through a Notary system. A Notary is an independent entity where every property purchase takes place. You and the property seller will go to the Notary as the final stage of a property purchase. The Notary will then check over all the documentation and witness that the purchase is made correctly.
This does not mean you do not need a lawyer to check all the official documentation before hand but it does mean purchases can be made without one.
Summary as to whether to buy a holiday rental property in Lanzarote or a long term rental house
The best way to find the most suitable property for you starts with your needs and tastes. What is your budget and where do you and your family like to holiday.
Learn the Lanzarote property market. The more informed you are the better things will go. Learn how much properties are worth and how to recognise an over or under valued house. Discover the areas of Lanzarote where you want to buy, what best fits you and your families needs.
Decide if short term or long term property rentals are most suitable for your needs and circumstances.
If in any doubt seek reliable and professional advice. Money invested at the pre purchase stage can save thousands in the long run.
Make sure all the property paperwork is in order and know all the costs involved in completing the property purchase.
Learn about all the ownership and tax costs. A house on a complex with have community fees. Yearly taxes need to be paid on all properties.
Be informed and make a firm plan on how you will proceed with all the costs and potential incomes understood.
Owing a rental property in Lanzarote works well for many people and can give a nice passive income and be a place for your holidays.
