Published 30/01/2020 by Muna Benthami

Buying A Second Home For Holiday Lets? Read This First

In this article, we’ll aim to provide some pointers for buying a second home, drawing on the Savills study as well as our own experience.

Buying A Second Home

Second homes have long been a fulcrum of the Spanish property sector. Around 25% of domestic property-owners have a second residence, invariably near the beach or mountains, and thousands of international buyers have joined the market to capture their own slice of paradise beneath the Iberian sun — as demonstrated by the soaring number of sales along the sun-drenched Mediterranean coast.

So it was fascinating to read a report from our UK affiliate Savills, in tandem with vacation rental specialist HomeAway. The report, sampling thousands of second home-owners across Europe, found that the market is undergoing a decisive shift.

Where once people bought for personal use, now they are increasingly looking for an investment, to cash in on the growing holiday lettings market. The Savills researchers found that around half of all people buying a second home in 2019 did so with the intention to rent it out on a short-term basis from the outset.

Spain is a natural fit for this kind of investment. The country’s balmy climate makes it one of Europe’s favourite holiday destinations, and it offers serious value for international clients. In sun-drenched Malaga, for example, those buying a second home will find that the average property costs only GBP1,850 per square metre. Compare that with the British holiday haven of Cornwall, where the average property will set you back over GBP2,000 per square meter, and often more than GBP3,000.

But Spain’s holiday let market is becoming extremely competitive, as demonstrated by the fact that 71% of domestic homeowners now put their property up for rent during some part of the year. So, if you’re buying a second home with the intention of capturing international tourists, how do you achieve a worthwhile return on your investment?

In this article, we’ll aim to provide some pointers, drawing on the Savills study as well as our own experience. Lucas Fox commands plenty of experience in this area; our luxury properties in enclaves such as Sitges and Ibiza have long been popular with investors looking for a rental overseas. So we can hopefully give you some good advice to help you on your way. But if you still have questions after reading the article, feel free to email us!

Buoyant Market

The first thing to note is that the Spanish tourism market is currently in rude health. In fact the country just beaten its all-time visitor record, attracting over 80 million people in 2019, and their total spend has jumped nearly 3%. What’s more, the growth is being driven by the high end of the market; in 2018 alone, Spain’s luxury hotels recorded revenues of €1.8 billion, a 7% jump on the previous year.

Due to the popularity of short-term letting businesses such as Airbnb, more and more tourists are looking to rent properties rather than hotel rooms during their stay in Spain. Gunnar Sprengel, of Barcelona-based lettings management firm H20 Hospitality, says this trend is likely to continue.

“Tourist apartments are getting more and more popular, for sure. People are seeing the benefits over hotel stays — they have more flexibility, they can enjoy cooking the foods they buy in the local market, they can cook their own food for the kids, they can follow their own rhythm, and they spend a lot less. An apartment also gives you areas to socialise in a private setting.”

More and more people are striving to capitalise on this trend by buying a second home in prime tourist locations and renting it out to wealthy tourists. In fact, when the Savills researchers zoomed in on the Spanish market, they found that the percentage of purchases in the high price bracket (over €270,000, or GBP230,000), had jumped from 22% in the period 2014-16 to 28% over the past three years. By comparison, the percentage of purchases in this range declined significantly in France, Italy and the UK over the same period.

Find your demographic

But, if you’re one of those buying a second home with a view to attracting wealthy tourists, it’s important to take a number of factors into account.

The first is to think carefully about the demographic beforehand. If you want to attract families, for example, you might want to invest in an area like Tarragona, which has earned a glowing reputation for its relaxed, kid-friendly vibe. You probably want to invest in a spacious property, ideally with its own pool and garden (we might be biased, but we think this Mediterranean-style property overlooking the gorgeous La Mora beach would be ideal).

Alternatively, if you’re aiming your investment at couples and city-breakers, you probably want something a bit more compact (like this new-build in the heart of Madrid, for instance). Whatever you decide, the important thing is to have a clear picture of the type of person you want to attract before you even start searching.


Ref. POZ22179
Price: €610,000

Think about countries

It’s also worth bearing in mind the specific country, or region, you’re targeting before buying a second home, as Gunnar Sprengel says:

“Each city will appeal to different nationalities. In Barcelona, for example, we’re seeing big growth from North America, followed by northern European nations like France, England and Holland. We also get plenty of business from China and Arabic countries.”

Once you’ve identified your target nationality, think about the amenities they might require. Again, the Savills study is useful here; although the research was aimed at property-hunters, it also threw up some fascinating insights into the factors each nationality looks for when looking for a place overseas.

For example, if you’re buying a second home for UK tourists (who’ve long been a key driver of the Spanish tourism sector) you’d be wise to find a place with a pool, which was identified as a key priority by British respondents to the Savills survey. Thankfully Spain boasts the second-most residential swimming pools of any European country, so you’ve got plenty of choice (our portfolio boasts a number of properties with outstanding pools, such as this huge villa on the Costa Brava or this secluded penthouse on the Galician peninsula of Sanxenxo).

Likewise, if you want to attract French tourists to your home, you’ll want to include a secure parking space; if you want Italian or Portuguese tourists, you’ll need to offer a balcony, ideally with an ocean view; and if you want to emulate H20 Hospitality and capitalise on the American market, you’ll need to include reliable air conditioning.

One thing all countries agree on, though, is the importance of internet access, ideally high-speed. So make sure you consider this factor when buying a second home. Spain has excellent WiFi coverage throughout, and 5G is available in many of its most popular tourist locations.

Buying a second home

Ref. CBR20044
Price: €550,000

Give yourself a sporting chance

Another key nugget from the report was the importance of sports and exercise. Reading the findings, it’s clear that outdoor activities are now a key requirement for anyone looking for a property overseas.

Access to sports facilities, as well as hiking or cycling trails, was cited as an important purchasing factor by more than 60% of second-home owners. Fishing, golf and adventure sports amenities were identified by over 40% of owners, and 10% said that watersports facilities were an absolute must-have.

The growing importance of health and fitness is clearly reflected in the vacation sector, too. In fact Spain’s sports tourism industry has grown over 40% in just seven years. As Gunnar Sprengel says, “we’re seeing big growth in this area, especially for the beachside apartments we’ve got in Castelldefels, just outside Barcelona. We’ve definitely seen a big increase in sports tourism, because there’s a lot of activities in the area.”

Spain offers a plethora of opportunities for second home-buyers who want to tap into this trend. From its rustic mountainside properties in Catalonia, a haven for all kinds of outdoor pursuits, to its uber-chic beachside homes in Malaga, the country offers a base for every kind of sport available. Developers have also created a number of world-class golf resorts, notably the PGA Catalunya course which has hosted the Spanish Open on three occasions and is overlooked by a cluster of new-build villas, ideal for those who love nothing more than playing 18 holes beneath the Mediterranean sun.

But if you’re buying a second home for its outdoor potential, be sure to think about the wider package you’re going to offer your visitors.

Gunnar Sprengel suggests: “You should make sure you provide equipment, be it paddle surfs, bicycles, racquets or beach volleyball nets. Put it in the listing and the photos.

“Also, when you’re decorating the property, try and design it with a sports theme in mind. Perhaps give it a surfing theme, with photos of big waves. Capture the atmosphere you’re trying to communicate.”


Ref. MLG21383
Price: €1,395,000

Think about your availability

Finally, we suggest you think long hard about your own commitments when buying a second home. Yes, the market for holiday rentals is booming, but setting up your Iberian paradise might not be easy it as it first appears.

If you’re tied to a busy work schedule and won’t have much time to work on your Spanish home, it’s probably best to buy a property which is already renovated and won’t need too much work. Lucas Fox offers a number of homes which are already being used for vacation rentals, including a luxury estate in the Catalan mountains.

If, on the other hand, you’ve got time to spare and want to invest in a genuine project, you’ll find some serious bargains on the market (like this apartment in the heart of Barcelona). Spain is full of grand old properties dripping in languid Mediterranean charm, ideal for those who fancy taking on a fixer-upper.

The most important thing, though, is to work out your own constraints and objectives before you set about buying a second home to let. Just because the holiday rentals business is booming doesn’t mean it’s easy to get started.

Thanks for reading!

Ok, so we hope we’ve given you some useful tips about buying a second home in Spain, and turning it into a viable holiday rentals business. If you’ve got any questions after reading this article, we’d love to hear from you. Happy house-hunting!

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