#42 Short-Term vs. Long-Term Rentals: 3 Key Factors for Costa del Sol Property Investment in 2025

Are you considering buying property in Spain? Whether you’re looking to invest, rent out, or relocate to the Costa del Sol, 2025 could be the perfect year to do so.

The Costa del Sol continues to be one of Spain’s most sought-after regions for investors, expats, and holidaymakers alike. 

With a booming tourism sector, a growing expat community, and long-term rental demand on the rise, now’s the time to capitalise on this real estate opportunity.

In this episode of The Costa Property Podcast, we share three essential insights to help you navigate Spain’s rental real estate market

Tune in to Discover:

1. Why the Costa del Sol remains a property investment hotspot for 2025 - from economic growth to rising demand for rentals.
2. Short-term vs. long-term rentals: Which delivers the best returns?
3. Non-negotiables you must consider :Location, accessibility and more
4. Key features renters look for and what makes a property stand out.
5. Top tips to navigate Spain’s rental regulations as a property owner

Ready to Make 2025 Your Year?

Don’t wait for the “perfect time” - the best opportunities go fast! Book your free consultation call with Warner today to discuss your investment goals and start your journey to owning property on the Costa del Sol.

👉 Click here to schedule your free consultation

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Purchase our Roadmap to Buying Property on the Costa del Sol Digital Course

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Transcript

So welcome back to another episode of the Cost of Property Podcast. We're delighted that you're here with us today. How are you doing this morning, Warner? I'm fantastic. Sandra, how are you? Good, good, good, good, good, good. So today we're going to be really looking into 2025 and really talking about property outlooks, but from the perspective, if you're buying for investment, if you're buying to rent.

[00:01:15] So we're going to be really diving into if Spain is the best real estate investment for 2025 and three things that you really need to think about when you are investing with a view to rent your property out in Spain. Like we all know that Spain is an attractive real estate investment and that trajectory is set to continue for 2025.

[00:01:38] Spain's economic outlook for 2025 is absolutely projected to grow. Growth in tourism, despite what the press might have been reporting around tourism writing in Spain, tourism is set to continue to grow. We are still expecting expat relocation trends to increase. And also we still see the trend of foreign investment into Spain set to increase.

[00:02:07] Positive outlook and trajectory continue for coastal towns, like coastal areas, like the Costa del Sol and the Costa Blanca. And, you know, all the things that we see with the post pandemic. COVID real estate trends on the cost of deltas all being really positive. That positive trend is really set to continue.

[00:02:26] And also, you know, we still see the shifts in remote work boosting demand for second homes and long term rentals. throughout the cost as I thought. So Spain certainly looks promising by all accounts, but as an investor, what do you really need to think about when it comes to renting in Spain? Werner, can you help us to understand this topic and really start to share what you would consider some of your top tips?

[00:02:53] Yeah, some of my top tips if you were coming over to Spain and you were looking to buy for the rental would be location. Location, location, and the accessibility of it. So, is it near the transport? And one of the first things that renters will look for, especially long term or tourists, is how easy is it to get around?

[00:03:18] Is it near the train, the bus? Is it in high demand? And particularly important, is it in an urban area? Or is it in a popular tourist destination where not everyone has a car? Especially in the summer, car parking in Spain can be challenging, as you know, Sandra. Yeah, absolutely, absolutely. And I guess then from a location and accessibility point of view, you would also want to consider being close to things like supermarkets, schools, restaurants, medical facilities, because We know from experience that when you have a property that's close to amenities like this, it increases the popularity of your rental and you will rent your property faster.

[00:04:06] And also if you're renting for vacation rentals, you want to be close to key attractions like the beach. That's also really important. But I think even before we look at, you know, location and accessibility, it's super important from a investment point of view, if you are planning to rent out that you consider, do you want to utilize your property for short term rentals or long term rentals?

[00:04:32] Because there's very different things to think about, right? Whether you're going the long term investment route or the short term investment route. And we'll come into that in a second. So I would even say Warner, yes, you're right about location and accessibility. They're very important to criteria to look at.

[00:04:49] But I think even before you get to that point. You have to have clear in your head if you're an investor. Is my property going to be rented for long term rentals or is it going to be utilized for short term rentals? Would you agree with that? Yeah, I would totally agree with that. The short term option is more attractive.

[00:05:07] But the long term option is more robust. So understanding the rental regulations for the community and also the local laws will really help you make that decision about whether it would be a short term or a long term rental. Spain is starting to crack down, especially cities like Barcelona, Madrid and the Costa del Sol, some areas.

[00:05:34] They're looking at to stop the short term rent own. So this is something that you really need to be asking your real estate agent or your lawyer before you make the decision to buy a property in this area. Yeah, you're absolutely right. I think anybody who has been following the Costa del Sol or Spain overall will be, I guess, up to date with some of the reports from last summer that have been reported in the press really around negative sentiment towards tourists in Spain, but it's important to understand that this isn't essentially towards tourism per se.

[00:06:12] This is very much connected to the fact that there is a housing crisis in Spain and properties that are being used for short term holiday rentals are really only adding fuel to the fire. So what we're seeing on the ground here is in certain cities like Barcelona and now also In the Costa del Sol, we have seen some legislation introduced in Malaga, for example, there would be certain areas of those cities where short term rentals will no longer be allowed.

[00:06:44] So if you are an investor and your intention is to rent out the property short term, you really need to research if the development that you're buying that property in has an intention to allow short term rentals long term. Okay, because this will really play a massive part in the plans for whether you will be able to write that property out short term.

[00:07:11] You will be able to understand This really by asking for the support of your real estate agent, understanding how does the community of owners in that development really feel about short term rentals. The community of owners are really the owners that are responsible for the decisions that are being made in the development and they meet regularly to discuss important topics concerning the development.

[00:07:39] When they meet, all of the meetings are minuted. So if there is. It's ongoing discussions around banning short term rentals in the development that you intend to buy. You will be able to understand that and you should understand that from the outset before you even look at reserving a property or intend to pursue your purchase.

[00:07:59] This is important for you to understand. From a long term protection point of view, for long term rentals, it's also important in Spain to really understand tenancy laws, which tend to favor tenants, okay? Especially when it comes to eviction processes and rent control. Make sure you're familiar with regulations to avoid any complications further down the line, I would say.

[00:08:25] You know, get to grips with basic tenancy laws and ensure that you have a good rental contract in place with your tenant and always have that checked over by your lawyer as well to ensure that you are protected as the property owner in the best possible way as well. Anything else, Warner, when it comes to, you know, what to think about?

[00:08:47] Yeah, just one thing. The short term rental does look attractive, but don't rule out the long term rental opportunity as well. There is a lot of, as you said, nomads and people coming here looking for accommodation. So the rental prices for the long term has increased. But as long as you make sure that you're following that, then you will find a good tenant that will pay the rent.

[00:09:14] So both options are very good in the Spanish market today. Yeah, I agree with, I agree with you on that. The long term rental is also a great option. You know, properties are renting for high monthly rental amounts at the moment and there is a good. Supply of good tenants, if we put it like that, due to the fact that there is a lot of tech companies based in Malaga, for example, and towns like Turmalinos and Benomadna being located on the main train line into Malaga are great commuter and dormitory towns.

[00:09:49] So, you know, it is absolutely possible to buy for investment. with the plan to be long term rental and still achieve your investment objectives by going the long term rental route as well. I think some people prefer that route as well because when you go short term rental you need to obviously ensure you have somebody looking after the property for you.

[00:10:10] You need to have a cleaner to ensure that you turn the property around between rentals. There'll be a level of maintenance if you have a high volume of rentals. So, that brings another set of things to think about. But if you're going for a long term rental route, you don't have those same challenges because you'll have one tenant for a long period of time.

[00:10:28] So, I think that's a good shout out warner as well when it comes to things to think about there. So, that was really around rental regulations and licensing, things to think about when it comes to short term and long term rentals. And also for you as a, as a landlord. ensuring that you get familiar with basic tenancy laws in Spain and to ensure that you keep yourself on the straight and narrow.

[00:10:51] Anything then, Ellsworth, what about point number tree, three, tree, three, around property appeal and target markets? What would you say around this? Yeah, well, look, because the Bellsoul has different areas, and some areas are more expensive than other ones, so depending on where you're buying, it depends on what caliber of person that you're going to get.

[00:11:17] For example, if you're buying in Merbea, then you would need to furnish the property as somebody that would be interested to rent it out in Merbea. Or, for example, if you're buying somewhere like Ben O'Madena for short term rentals, then you would furnish the property accordingly. It just depends on how much you're going to spend to actually furnish the property.

[00:11:44] and what return that you're going to get from it. I think what you're trying to say there is that, you know, Marbella postcode comes with a certain level of expectation. So if you're buying in Marbella, you may need to finish your property with furnishings in a different way than if you're buying in another part of the Costa del Sol.

[00:12:01] Is that what I'm hearing? Yeah, exactly. When you're buying in Marbella, you will pay more, but you will get more rent. But that client will want a specific furniture, you know, type of apartment that suits his lifestyle because he's paying more rent for this location. Or her lifestyle. But yeah, it's fair to say the appeal of your property can drastically impact rental income.

[00:12:27] You know, think about it ourselves as consumers. If we are renting something, even if it's short term on Airbnb, Naturally, we're going to go with the property that looks best. We're going to feel drawn to the property that is the most appealing, that has the nicest furnishings, the nicest finishings. The same is to be said with the longer term property.

[00:12:50] market when it comes to rentals. So consider this when you are preparing your property for rent. This is an important decision. I think also if you are going the long term rental route, you do need to consider whether your property is going to be rented furnished or unfurnished. Honestly speaking, furnished or part furnished, there's always a higher demand because naturally a lot of the tenants are going to be relocating to Spain, so they may not be coming here with all of the furnishings at hand.

[00:13:21] Often they're buying furniture over here and they're starting from scratch. So if it is a long term rental, Arrangements that you are entering into with a tenant, you do need to consider short term, or you do need to consider furnished or unfurnished, but as I say, furnished or part furnished, you know, usually is a better flow of tenant.

[00:13:44] Internet access, something to consider, obviously, you know, if you are renting short term, you're Wi Fi now as part of the regulations when you're applying for your tourist license. Okay. It's worth to mention as well that if you are renting short term, you cannot just turn the key of the property and put the property up on Facebook or Airbnb.

[00:14:06] You do need to acquire a tourist license. So that is done with the support of a, of a local head store. So you know, you can start to acquire that information when you hit the ground in Spain as well. Air conditioning and climate control is also required for short term rentals. So that's important to note as well.

[00:14:25] So features like air conditioning. He's saying reliable intranet, these things are really, really important, but they're also very important for people that are planning to rent with the intention of working remotely. So if you have good speed intranet, reliable intranet, this is an important factor for people when they are considering rent, but long term and short term actually on that matter.

[00:14:49] Anything to add to that, Warner? Yeah, so look, with Spain's economic situation, it's going to be another amazing year in 2025. Tourism is, is predicted to be even more in 2024. So it's a great time to buy either for short term or long term rent. So for people that's interested and have a five year plan to move to Spain, If you have the money now, it may be a good option to buy that property now and rent it out long term for five years.

[00:15:24] So that that time you're buying a good time. And by five years time, hopefully most of the, if you're having a mortgage or finance, Some of that would be paid off and then you'll have your property then. Yeah, great advice. Okay, so just to recap on Warner's tips, we talked about location and accessibility.

[00:15:47] We discussed the need to be really clear on your intention to rent short term or long term because this will really tie into rental regulations and things that you need to be aware of from that point of view. And also we talked about the property appeal and target market. So increasing the appeal of the property by furnishings and sub furnishings, thinking about climate control like air conditioning, and also thinking about your internet reliability.

[00:16:12] These things are really important when it comes to renting out your property. So thank you so much for tuning into this episode of the cost of property podcast. So we hope you have gained. Some valuable insights into why Spain could be your best real estate investment for 2025 and what you need to consider when renting out a property here.

[00:16:33] Now if you're serious about finding the perfect property investment in Spain and want expert guidance from start to finish, we're here to help. You can get in touch with Warner today to book a complimentary consultation call. We'll discuss your goals, answer any questions that you have and help take things to the next steps.

[00:16:51] Thanks. If you prefer, you can also drop us a message on WhatsApp or just click on the link in the show notes to get in touch with us and we'll get back to you right away. And remember, what we're seeing is that the best opportunities go fast. So if you really are serious about investing in Spain, then there is no better time to start.

[00:17:13] Thanks again for listening and bye for now. Bye bye.