With low costs flights from most major European cities, Stephen Anderson, managing director of Infinito Real in Portugal believes the short term rental market is a fantastic opportunity to generate income to help with the running costs of an overseas investment, as long as it’s done properly.
‘In an area like Portugal, especially the Algarve, rentals are instrumental in most people’s decision making when purchasing a property. However, my advice to those looking to purchase an overseas buy to let or considering renting out their existing property, is to stick to short terms lets and follow advice,’ he said.
He believes they should start by picking a reputable managing agent. ‘If you are not always there to keep an eye on your property, it is important to choose an agent that you have confidence in to manage the running of your property. There are always numerous rental companies offering varying degrees of services and although many will be fantastic at making sure a property is kept well maintained and that rent is paid, the opposite is also true,’ he explained.
‘It's vital to make the right decision where both the condition of your property is maintained, but also to ensure their marketing strategies attract enough rental clients to generate income that will cover the bills and mortgage. Choose a company that will be transparent with rental income and the split between management costs and you the owner. Ask them for a monthly income and expenditure report to ensure you are up to date with your property,’ he added.
He also advices people to consider using more than one company for your rentals or even one for the renting and one to just look after the property. ‘Although this can be a little more work for you as an owner, it does offer a greater level of care for the property as each company has its own responsibilities and can focus solely on those,’ said Anderson.
Often there is no official way to check for a reputable managing agent or associated maintenance companies, so he recommends speaking with a number of different companies to get a feel for the services offered and compare the costs of each. ‘Recommendation is vital here, and if you trust your estate agent, then that should be the place to start, as the companies recommended will generally have a proven track record and be trustworthy,’ he continued.
Owners should always take a security deposit. ‘Some of the main fears people have when renting out their property is that they may have a tenant who will cause damage to the property. Although this is something that rarely happens, especially if the property is safeguarded by a reputable management company, it is still advised to take a security deposit first so minor damages can be deducted easily,’ he added.
Other keys moves include keeping a thorough inventory including the number of knives, plates, televisions, DVDs etc. ‘These should be checked off before the tenant leaves and, again, anything missing or broken is taken from the deposit,’ he explained.
As a rule of thumb owners can expect to rent out for 10 weeks per year and anything extra is a bonus. This should cover the majority of the running costs each year.
‘Ultimately the rental of overseas properties, especially in Portugal, can be relatively stress free. If you are unhappy with your management company at any time, then change to another it is as simple as that, if you do not feel comfortable, or you don't have a level of trust from day one, use someone that you do feel comfortable with, this is a major part of owning an overseas property, and is something that doesn't need to be rushed,’ he concluded.
