Making the Best of It - Advice for Spanish property owners who rent.

In previous articles I established that there was a real estate bubble that was already imploding,  combined with a self-catering tourism crisis cause by massive over-supply. Although the actual numbers of tourists has increased significantly they now come to Spain in smaller groups for shorter periods. The hypothetical demand for each property available has fallen from 21 weeks to under 5 per year. Renting property owners with modern or updated properties in popular resorts will be least affected but the "golden" years for property rentals are long gone and the self-catering sector is unlike to ever recover its former strength.

ARTICLE HIGHLIGHTS  Optimising your Rental Income:-   Quality   Selling Prices   Services   Advertising   Good Ad. Presentation   Hang onto your Clients   Plan your Campaign   Don't neglect "foreign" markets   Renting via an Agency or Tour   Operator

Optimising your Rental Income.

Useful advice for property owners who intend to make the best of it -

If you rent directly -

Quality – Remember that it is now a buyers market and clients will be shopping around for the best value.
Also remember that there will be unoccupied properties during most seasons including August - Off-season weeks will make a great difference to your overall return!

Clients will be looking for spacious, newly-built or recently modernised properties with vital items such as modern furnishings, central heating, air cond., washing machines, modern fitted kitchens etc.
Other items, such as a dish-washers, security alarms, secure walls and gates, 100% private pool and/or sunbathing areas, heated pools etc. will make a difference to your overall return.

If your property is old, has sparse mod.cons. and you have a tight budget - then do not try to improve it by halves! It is better to make the rentals really cheap or let long-term.

Selling Prices - Early bookings are all important and you might have to sell some weeks at last moment discounted prices.
Set a fair price for your villa by researching similar properties in the area.
Advertise this as the price and show a discount for early-bookings (say 20% before 31st January. Don’t even suggest last-moment reductions at this stage and always state the date that the early-booking offer ends.
As soon as this period ends then try to sell at the full price.
When you get to 6 weeks before, start your last-moment discounting (20% – 60%).

Services – Cutting back on these just because the market is depressed could be a false economy. Receiving a key through the post is considered by some as the worst aspect of self-catering and this is no longer necessary. There are agencies everywhere who will hand over keys and maps or provide key safes for an annual rental.
If you use local “clandestine” services you should find that, from now on, local agencies are not that much more expensive and provide a tax advantage.
Additionally, many of them provide “Joint Venture” rental contracts – so you could have your cake and eat it as well!

Advertising – The cost-effectiveness of magazine advertising is loosing ground in favour of Internet advertising sites but even this medium is not as effective as it was.

Beware of the sites that offer a really cheap yearly ad. rate and/or commission.
Don't take notice of their popularity claims. Check it out yourself by typing into a search engine the keywords commonly used by searchers e.g. “villa holidays” combined with the resort name.

Try this one –
http://www.google.co.uk/search?hl=en&ie=UTF-8&q=villa+holidays+moraira

Their ad should appear on the first page, best the first 5 results. If you cannot find them easily then your clients won’t either!
Don't take too much notice of sponsored listings e.g. "Ads by Google". This means they pay for clicks and it is not so effective as generic results. They could stop at any time and so will your enquiries.
Click through to their home page and check their Google Rank. For a localised site 2 or 3 is the best that they will get. If they don’t have a Google Ranking or if it is low then it means that they pay little attention to page optimisation and or that it is a new site and, as soon as they stop paying for clicks, they will disappear altogether.
If you need a Google Toolbar to search or see the rankings then click here.

It is not even as simple as that these days, with so many owners using these services. The top sites have 100's of 1,000's of ads. for your area.
Yours could be buried somewhere way down the list.

The best solution is to have several sources of bookings.

Good Ad. Presentation is Vital! You know your property intimately but does your description properly and fully describe it?
Potential clients just have the text you provide and a few 'photos.

If you are not good a photography then employ a professional. Most photos need careful optimising for the Internet.

Hang onto Your Clients! - Do your best to ensure that they enjoy their holiday and encourage them to come back. E-mail them regularly - after they arrive back, in January (with an early booking discount offer), twice more if they don't rebook and then with your last moment offers.
Always Remember: The very best clients don't complain - they just find another supplier!

Plan your Campaign! - Don't put all your eggs in one basket! A typical good plan -

1. Advertise on at least TWO Internet sites after careful research for the best for your area.

2. Also advertise in your local paper for (say) 4 weeks of the prime booking period.

3. Look for a good rental agency in your area that provides services plus a "Joint Venture" rental plan.
   This is quite important so that you stay on the right side of the authorities.

Absurd to pay all this for advertising plus commission when the agency makes a booking?
Not at all, just sound economics! The advertising and commission is all paid for by just 2 weeks extra booking.

Don't neglect "foreign" markets! - The UK still only accounts for 40% of visitors to Spain. You will find strong competition here as the Internet is absolutely saturated with English-language advertising sites.
The Spanish market (for example) is developing strongly now that incomes have improved and rental prices have fallen.
Most Spanish, French and German Internet browsers have their PC set to show pages in these languages - so they probably won't find you!
Here is the main advantage of also booking through an agency or tour operator. Most of them have already realised that there is little point in advertising to less than half of the market and have pages in at least 4 languages.

The final article in the series: How the Spanish authorities could react to the tourism crisis. Why owners who rent should take great care about there situation with the Spanish authorities.!

© Mike King July 2007

ABOUT THE AUTHOR: Mike King has lived and worked in the Moraira Area since 1971. Currently he manages Villa Holiday Services of Moraira, a rental agency that specialise in Villa Holidays in Moraira and Property Sales in the Moraira Area.
Mike is also responsible for a popular advertising and information website about the Moraira area.