The Las Palmas holiday rental market is booming as owners pile in chasing juicy, short-term rental yields. But, the time will come when supply exceeds demand and yields drop.
It’s why I advise all Las Palmas rental property owners to future-proof their investment now.
The Las Palmas holiday rental boom
Las Palmas estate agents are following the trend and every apartment within walking distance of Las Canteras beach is now labelled as ‘an ideal rental opportunity’.
I’d say we’re in the middle of a boom; the number of apartments in the market is growing so fast that it’s even pushing up residential rents in the Puerto district.
Supply and demand
Tourism in Las Palmas is booming but it isn’t infinite. There will come a point where even the growing number of tourists can’t fill all the rental apartments that pop up.
When the Las Palmas holiday rental market hits saturation, occupancy levels and rental yield will fall in the sectors with the most supply.
Studios and one-bedroom apartments are the most common property type, and the cheapest to refurbish for short-term rental. I’d expect them to hit saturation point first.
So is it too late to buy a Las Palmas holiday rental investment?
Just because there’s are lots of rentals on the market, doesn’t mean that you can’t get a good yield. Buy the right property, decorate it well, and market it right and a Las Palmas rental is a great investment. For a start, Spanish property prices are forecast to rise by 40% over the next decade. With high demand and a lack of new property, Las palmas property will follow this trend (at the least).
The key to earning a decent holiday rental yield is to make sure that your property stands out; it needs a hook to make potential renters choose it over competing apartments.
How to make your Las Palmas holiday rental property pop
Here are five ways to make sure that your tourist rental property stands out and gets booked.
Location, location, location
The easiest way to fill your Las Palmas rental property is to buy in a desirable area. The beachfront is always going to be popular because of the view and because the supply of apartments is limited. But, property prices are high so most buyers look just behind the beach in the Port District and Guanarteme. Here, demand is still high, but you do have to do a bit more to attract tenants because there is far more competition.
But it’s not all about the beach; Apartments in old town Vegueta and Triana, especially those with period features like balconies, high ceilings and original floors, are also in high demand. And top floor properties all over the city rent well, especially if they have outside space.
For more information on property areas, see my complete guide to Las Palmas’ property zones.
Outside space future-proofs your rental
Most Las Palmas visitors come for the climate so they want to be able to enjoy it as much as possible. This is why any Las Palmas property with outside space has an advantage.
The space doesn’t have to be a large terrace; a balcony, open roof, or a private internal courtyard are good too, provided that they well-decorated and look inviting in the photos.
Given the choice between two similar Las Palmas apartments, almost everyone will choose the one with outside space.
Decorate with style
When tourist rental was legalised in Las Palmas in 2015, it was fine to visit IKEA and buy basic, modern furniture to decorate your tourist rental. For properties that are well-located or have a great outside space, IKEA furniture is still good enough.
However, if your tourist rental property is in an area with lots of competition, you’ll need to think beyond basic to future-proof your yield.
Find some great art for the walls, choose original furniture, give your property a decorative theme. Anything that make it stand out from the beige.
Target a niche
Not everyone who comes to Las Palmas is here for a week- or two-week holiday. The city attracts businesspeople, surfers, divers, language students, etc.
So, if your property is close to the surf breaks at La Cicer, consider putting in surfboard storage. If you want to attract business people, provide fast internet access, a printer, and a decent iron.
Think beyond the fortnight
Las Palmas currently has a severe shortage of property that is available for rent for periods of between two weeks and six months.
It’s because most tourist rental property is too expensive for a stay that goes beyond a week or two, and most residential landlords won’t take tenants for less than six months.
This makes life difficult for ERASMUS students, digital nomads, language students and even Scandinavian winter visitors who want to spend a few months escaping the cold.
And it’s an opportunity for rental investors.
Target this niche and you’ll make less per night, but you’ll avoid empty periods as well. Success depends on making contacts in the nomad, co-working and language school scenes in Las Palmas city.
If you’re considering buying a Las Palmas property as a buy-to-let investment, or want to rent out your property, please get in touch for a chat. Often it’s the little things that make all the difference.