‘Fly to Let’

A twist on the popular term ‘buy to let’, ‘fly to let’ is the increasingly popular trend of buying an investment property with a view to letting it out.  The ‘fly to let’ investor is no new phenomenon.  People have been doing it here for years, but it is only recently that we have seen a sharp rise in investors who are really serious about renting.  Many have become disenchanted with traditional managed pension plans.  For them foreign property is an important part of their retirement planning.  Anyone can now see that an investment that has strong capital growth, provides an income and also enhances lifestyle is going to be a better bet than the unit trusts and pension plans that have let so many of us down.  The pensions crisis has seen to that.

From the other end of the spectrum, a newer breed of overseas property investor is the first time buyer.  Squeezed out of their own markets by high prices, they are climbing the first rung of the property ladder in foreign climes.   A recent YouGov survey of 18 to 29 year olds found that half of them stated that their first property purchase would be a foreign investment and 80 per cent of those intend to rent out their property.

All this increased interest for rental properties is already making an impact on the Tenerife market.  Tenerife stacks up very nicely for a rental investor, compared to its competition: and we have our twelve month climate to thank for that.  A good rental investment relies upon occupancy, and if a property remains unoccupied for several months because it is ‘out of season’, then that’s going to have a big effect on its income.

Compared to the Costas, Tenerife has been very well booked up.  Declining winter occupancy has been the trend on the peninsular.  For example, back in 2000, Costa Blanca had an occupancy rate of 80 per cent, and that has gone down every year to a level of just 40 per cent.   From Benidorm to Mallorca, the story is the same.  Meanwhile, here in Tenerife, we have winter occupancy rates close to 75 percent.  Great news for our rental investors.

And while we’re talking statistics, remember that Tenerife has one of the highest repeat visitor rates, so the person who rented your apartment this year is likely to book it again, and again.

In short, Tenerife is well positioned to take advantage of this upsurge in demand for rental investments.  If you rent a property here, then the higher an income you generate, the more your property will be worth.  If you’re considering purchasing a ‘fly to let’ investment then, with the correct advice and marketing, you should be looking at some worthwhile (and enjoyable) returns.