In fact, if you take the rent as a percentage of the property s value, the cheaper place could well turn out to be the higher earner of the two. But ... how do you avoid the pitfalls of letting? You should, obviously, be cautious about whom you choose as a tenant but, apart from that, here are a few basic rules to follow.
Vacation Rentals Spain - Contract
Always give a contract, for this can protect the landlord just as much as the tenant. In Spain there are two sorts of contract: an arrienda de temporada, or short-term contract; and an arrienda de vivienda or long-term contract.
It is best to concentrate on the short-term contract. This covers anything from vacation rentals lasting a week or so, to lets of several months, and does not grant the tenant any right of extension.
The arrienda de vivienda, or long-term contract, tends to be made out for one year to start off with, but the tenant has the right of extension for up to five years.
So, do make sure that your contract has the heading arrienda de temporada or contrato de temporado, for these do not give the right of automatic extension.
It is possible to obtain set contracts quite cheaply from tobacconist shops in Spain, both de temporada and de vivienda. However, you may have to visit several before finding a shop that stocks them and they will, of course, be in Spanish.
The other option is to ask an abogado (lawyer) or gestor (licensed administrative expert) to draw up a suitable one. You may even wish to have it translated into English.
Vacation Rentals Spain - Inventory
Next, make an inventory of everything in the property. When you let the place, you will go through this with the new tenant when s/he signs the contract and, in this way, there will be no dispute as to what should be in the place when s/he leaves. S/he will sign and date the inventory along with the contract and you will both keep a copy.
Vacation Rentals Spain - Deposit
Always take a deposit. Under Spanish law, the deposit or fianza usually consists of one month s rent for residential property and two months rent for commercial premises. This will be returned at the end of the stay as long as there are no debts or damage to the property.
If doing the letting personally, you will probably hold the deposit yourself. But it can be held by an independent agency or even by the Regional Housing Department, to be returned when both parties agree.
With very short vacation rentals, you could always take a fixed amount as a booking fee, which could double up as a deposit and be returned at the end of the stay, when the keys are handed over.
Vacation Rentals Spain - Receipts
Remember to give receipts. If no contract is given, the receipt implies a contract. Although a landlord may think this is not in his favor, in one way it is, for the implicit contract ends at the date stated on the receipt.