The team from ShMadrid would like to share a few steps with you on how to go about renting out your property. We are informing you of the basics, so you know what to do once you have decided to put your property up for rent.
Keep in mind that we are merely scratching the surface on the subject of course because you always need to do your own research. The information written below is, however, a good place to start.
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How to easily rent out an apartment in Madrid
The rental market is regulated by the Ley de Arrendamientos Urbanos (LAU or Urban Letting Act), and rules and regulations have transformed over the years. It is therefore important to have knowledge of the Royal Decree-Law 7/2019, in order for you to know about the duration of a rental contract and the deposit or extra guarantees you as a property owner can request from a tenant.
Now that we have made a few things clear, we would like to share a few basics on what you should take into account when renting out an apartment in Madrid:
- It is important to have all necessary documentation when wanting to rent out a property in Madrid. One part of the documentation explains your identity as the owner of the property, while the other part will show that you are aware of the obligations concerning the property. Some owners like to make living in the apartment easier for the tenant by providing manuals for appliances, showing last utility invoices, etc.
- When setting a rental price for your property, you should consider prices of other rental apartments that are located in the same area. You can do your research by using online tools, although this data will not always provide you with a realistic value of your property. Another way to go about setting a rental price is to obtain the gross rental yield on the property. You can divide the total of 12 months rental income by the price you would get if you were to sell your property. (For example: if you receive 5000 euros of rent a year and the property costs 100.000 euros, then you will have a gross yield of 5%) However, don’t be too strict with these percentages when negotiating a rental price with tenants.
- Get the apartment ready before renting it out. This is absolutely essential because even if it’s an old apartment that has not yet been remodelled, it is always worth more if it is clean, well taken care of and well presented. So fix everything that is damaged or not functioning, clean the apartment thoroughly and decorate nicely.
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- Once your property is ready for new tenants, pay extra attention to a good advertisement, because this is an important part of attracting tenants. An appealing advertisement takes a little bit of time, as you have to write down a full and correct description of the property and take high-quality pictures or videos.
- Define your marketing strategy. Make a plan on how you are going to promote your property and stick to that plan. A part of that strategy is your advertisement on real estate portals, but you can also consider hanging a “For Rent” sign on your window or balcony and letting neighbours, friends and family know about your apartment being up for rent. Word of mouth is still a very strong and – most of the time – underestimated marketing tool.
- Viewings with potential tenants. Unlike with a buyer, the relationship with your tenant could last for a considerate amount of time, and for that exact reason, you want to invest in finding decent people you can easily communicate with. Emphasize the advantages of your property and its surroundings during viewings, without, however, hiding anything. This is the only way of becoming a trustworthy landlord.
- Be sure to draw up a good contract, and don’t be satisfied with a standard contract. You can opt for a specific model, but you should always modify it and include specific conditions that you agreed upon with the tenant.
Do you have other interesting information on renting out an apartment in Madrid?