Owners in Spain and Tenerife are choosing to rent out property when it fails to sell.
Property owners in Spain and the Canary Islands who are renting out their properties because they cannot sell them due to the country’s depressed real estate market are increasingly experiencing problems with bad tenants hit by the economic downturn. The number of defaulting tenants and evictions have tripled in the past two years, it is claimed.
Many of them who are having problems are expats who moved to Spain and the Canary Isles for a better lifestyle and then became reluctant landlords because of the credit crisis, according to Paragon Advance España.
Bryn Cole, Managing Director of Paragon Advance España who have offices just outside Marbella, the Costa del Sol and Madrid said that many of these reluctant landlords have moved back to the UK and rented out their properties as they cannot sell them in the current real estate climate.
‘They have been forced into letting out their homes in order to be able to pay the mortgage and, for those investors who jumped on the Spanish property market, buying off plan, only to see it go into freefall before they could offload their investment, they have had their fingers burned and are having to let long term and ride it out,’ he explained.
His company’s research has found that the number of tenants who default on their monthly payments is increasing at alarming rates with tenants also being affected by the economic crisis and unemployment in Spain.
It can take around 18 months through the usual law system and, in the meantime, the landlord still has to pay the mortgage, utility bills and has no redress over the defaulting tenant during this time. If the landlord should refuse to pay and, for instance, the electricity is cut off, the tenant can prosecute the landlord. These facts are another good reason to rent using the services of an estate agent who can try to alleviate any problems as they arise and in so doing, protect your investment.
