Successful Renting: Making your Investment Pay

One of the keys to successful property investment is rental income. This month we are going to look at how successful investors maximise this revenue, and the pitfalls that the rest of us should avoid.

Of course the first thing is to find the right property. The property obviously must appeal to as wide a group as possible. The bigger this group, the easier it will be to rent. It has to be as close as you can afford to the sea, a golf course, or ideally both. Nobody wants to walk too far to enjoy themselves, holiday time is too precious. Whereas agents used to advise investors to buy one bedroom flats in the heart of town, trends in tourism are changing. There is a swing towards more upmarket and spacious accommodation with as many luxurious frills as possible. Investors should always take such market trends into account. The property should, ideally, have a sea view, or a view of the pool or golf course. The complex should have as many facilities close by as possible, such as bars, restaurants, and shops.

So having found the ideal property, next you need to ensure that the complex you are considering investing in actually allows rentals. Community regulations may prevent this, so check with the community office.

As with everything in life, what you get out is dependant on what you put in. You will need to dedicate some energy to marketing your property, it won’t rent itself. Friends, family and colleagues at work will form the basis of your word of mouth marketing. This is certainly the most cost effective way to get the word about, but unless your circle of friends and acquaintances is extraordinarily wide, it probably won’t be enough. Don’t underestimate the value of cards in newsagents’ windows, supermarkets, golf clubs and other small ad boards. There are a number of good websites that provide cost effective solutions. Getting a little more costly, advertising in relevant publications such as Daltons Weekly or Loot is an option, and can often be useful for filling a last minute vacancy. Another useful tool is a simple website with information about the property, the local area and availability. If it is filled with lots of attractive photos, this can be a very enticing lure.

If all that is too much effort, then you might consider a letting agent. Beware, though, because their commissions are going to make a substantial hole in your profits. Even if you don’t use a letting agency, you are at least going to need the services of a management company. Someone will need to take care of cleaning, laundry or just simple maintenance issues like changing light bulbs and restocking loo paper… or unblocking the loo! Your guests will need a point of contact on the island, even if it is simply to pick up the key. Some complexes have a management company and reception on site, this obviously makes everything much easier, but there are a number of companies that provide the service. But be careful. Don’t necessarily choose the cheapest, do a little research to ensure the one you choose has a good reputation.

Last year, 82% of passengers arriving at our airports were revisiting the island. This means that if you provide a clean, nice apartment at a reasonable rent, there is a very good chance that they will rent it again next year. You can improve your chances by simply providing a pack for renters that explains all the facilities of the complex, recommends restaurants, contains a map and covers basic do’s and don’ts. After a few years rental, many investors find that there is no longer the need to advertise their property because it is always rebooked, and this is the ideal situation that you need to work towards.

With such high repeat visitor ratios and our clement weather, Tenerife is one of the best places for the buy to holiday let investor. If you are willing to dedicate a little time, you will find that purchasing a property in Tenerife is a very viable investment that will also give you a great deal of enjoyment.