As our property prices have gone down, what has happened to our rental prices both short term and long term?
In my corner of the woods we have noticed a big trend towards renting, those who were looking for property before are now content to pay someone else’s mortgage for a while to see what is happening with the market.
2 questions immediately arise, the first is: Isn’t NOW the best time to buy when prices have dropped and some sellers are willing to take any offer?
The second is: if the market is in favor of renting, is now the time to buy a place to rent?
Let’s look at rentals by the minute, a long-term rental offers less money but the security that your property is earning money monthly.
A short-term rental will most likely book solidly during high season, but there’s a chance it could be slower during low season.
Comparing prices:
A 2-bedroom, 2-bathroom apartment with beautiful sea and mountain views purchased for 200,000 euros.
Payments for a mortgage of 180,000 euros are 998 euros per month. – using our mortgage repayment calculator.
More than 12 months that is euro 11,976
On average, a long-term rental can reach between 600 and 850 euros per month.
More than 12 months, that is, between 7,200 and 10,200 euros.
A short term rental can be arranged for between 500 and 800 euros per week during high season which for 12 weeks can be as high as 6,000 to 9,600 euros, hopefully a few weeks out of season at the lower price of 350 to 500 euros per week. week you can achieve between euro 1400 and euro 2000
This is on average a total of between 7400 euros and 11,600 euros
A 3-bedroom luxury villa with a private pool and stunning views purchased for €650,000.
The mortgage payments of 400,000 euros are 2,218 euros per month. – – using our mortgage payment calculator
More than 12 months that is euro 26,616
On average, a long-term rental can reach between 1,000 and 1,500 euros per month.
More than 12 months, that is, between 12,000 and 18,000 euros
A short term rental can be arranged between 1,000 and 1,600 euros per week.
High season between 12,000 and 19,200 euros. 4 weeks in low season between 650 and 1000 euros for 2600 and 4000 euros.
Total rentals between 14,600 and 23,200 euros
These figures are not overly optimistic; are based on 12 weeks rental in high season and 4 weeks rental in low season.
If you are proactive in marketing your property, we are sure you can achieve much longer rental periods and therefore more money.
Purchase price – 2-bedroom apartment. €200,000
Mortgage amortizations – Mortgage value – 180,000 euros / 998 euros 11,976 euros annual amortizations
Long term rental 600 ¬ per month, 7,200 euros – Annual rent 10,200 euros
Short term rental 500 ¬ per week 7,400 euros – 11,600 euros annual rent
Purchase price – 3-bedroom villa with pool 650,000 euros
Mortgage amortizations Value of the mortgage – 400,000 euros / 2,218 euros – 26,616 euros annual amortizations
Long-term rental 1,000 euros per month 12,000 euros – 18,000 euros annual rent
Short term rental 1,000 euros per week 14,600 euros – 23,200 euros annual rent
The numbers tell us that with the minimum rental possibilities suggested in the table above, your mortgage payments can be reduced by as much as 75%. For example: a 2-bedroom, 2-bathroom apartment purchased for €200,000 with a mortgage of €180,000 can achieve an annual income of up to €10,200 on long-term rentals or €11,600 on short-term rentals.
Your monthly mortgage payments would be reduced from 998 to 148 euros. And property remains the safest investment.
The traditional high season has always been governed by school holidays and the incorporation of family tourism. However, with more people retiring early, this allows them to enjoy the winter months, thus creating another seasonal rental opportunity.
