Government to setup rental agency

The effects of a socialist government in Spain may well benefit property investors in Tenerife, say Tenerife Property Shop.  The government has confirmed that it will set up an agency to rent out property on behalf of owners.

Details of this new government agency have been released this week. It will be called the State Renting Company (La Sociedad Publica de Alquiler) and will rent out privately-owned property on behalf of the property owners. Mary Spencer, a director of Tenerife Property Shop explained, 'The idea is for owners of empty homes (usually people who have bought property as a medium or long-term investment) to use the company as a kind of renting agency, handing over the right to rent to the agency, and to receive a monthly rent from the agency for a given period, say five years.'

'Potential advantages to owners are several fold,' expanded Mary, 'Owners will not have to look for and interview tenants or chase after any unpaid rent.  But the biggest plus may be that they may even be able to claim the five years' rent in one lump sum, which is bound to attract lots of people who would otherwise be reluctant to rent out their second or third properties.'

Until the Agency finds tenants, the monthly rent paid to owners will be public money. The policy may prove very attractive to non-resident owners of Spanish property who often find it very difficult to rent out property they buy in Spain to long-term tenants, and even more difficult to keep up with monthly rent payments.

According to figures published by the Youth Council (Consejo de la Juventud) last year, 64 percent of people aged between 18 and 34 in Spain still live with their parents because they cannot afford to buy a house and because property available for long-term rent is both scarce and relatively expensive. In an attempt to make more rented accommodation available, the agency aims to encourage property owners to rent out empty apartments and to persuade young people to see renting a property as an economically viable alternative to buying a house.

The government aims to create a pool of 25,500 properties to rent in Spain over the next four years, and to offer them at a lower monthly rent than the current average so that more young people and low-income families can afford to take this option.

Further analysis by Tenerife Property Shop explains, 'This may not be suitable to all properties and we are awaiting further information from the agency which will define the criteria of the properties, rental incomes and the terms and conditions of maintainance.' 

Anyone wishing to know more about this, and other issues relating to property in Tenerife, will have the opportunity to register for the Tenerife Property Shop Newsletter in the near future on their website, which will keep subscribers up to date on all developments.