Holiday Rental Agencies Help Property Investors Weather The Storm In Turbulent Markets.
Online, August 6, 2010 (Newswire.com) - The recent downturn in the housing market has left property investors in Europe feeling like they have nowhere to turn. Each new news story brings more doom and gloom than the previous one and housing occupancy rates for Spain and most of Western Europe are at an all time low. In 2004 estimations of demand for Spanish property were as follows: 300,000 for Spanish people, 100,000 for foreign investors, 100,000 for foreign people living in Spain and 300,000 for stock in a country with 16.5 million families, 22-24 million houses and 3-4 million empty houses. From all the houses built over the 2001-2007 period, "no less than 28%" are vacant as of late 2009.
This has left many property investors in Europe wondering where to turn, originally convinced of the old adage that "there's no better investment than bricks and mortar" anyone who was able to during the late nineties and at the turn of the century put their spare capital into overseas and domestic property investments. With no sign of a decrease in housing prices, estate agents continued to sell houses, construction companies continued to build and investors continued to invest. Now in 2010, as a new decade begins, it looks like the party has ended and the correction in the property market has left investors with empty, unprofitable houses and few options.
With such depressing figures you might be fooled into thinking that the Spanish property market is dead in the water, well not so actually, thanks to the superb strategy employed by holiday rental companies operating in Spain and Europe.
According to the Homeaway Vacation Rental Marketplace Report, property investors who make their properties available for vacation rentals earn on average €35,000 (thirty-five thousand) per year, based on occupancy of 20 weeks. 38 percent of owners asked said that the income received from making their second property available for holiday rental was sufficient to cover their mortgage on the property and almost two thirds (63 percent) said that the income was sufficient to cover more than 50 percent of their mortgage.
Most holiday rental companies these days follow a specific model which is advantageous to both the customer and the owner of the property, being able to guarantee owners at least the minimum market price for their rental property without taking a commission, and also being able to provide low cost yet high quality accommodation for the people using their service. The new model which employs sophisticated marketing strategies is aimed at attaining an equal or greater market share than that which has normally been enjoyed by hotels and other types of single room accommodation.
In effect, the rise in popularity of this new market is counteracting some of the most negative aspects of the property crisis and providing property investors who are unable or unwilling to sell their property due to the current market conditions with a safe haven while the global economy recovers.
The prices being offered by holiday rental agencies and the standardization of their products mean that nowadays people looking for accommodation abroad are able to find something akin to a hotel suite, except with the addition of a fully equipped kitchen, for a fraction of the price. While property owners have renewed piece of mind knowing that their property is not only providing substantial revenue once again but also is being maintained regularly by a professional agency.
One example of the new breed of holiday rental agencies enjoying huge success is Dailyflats.com. In six years, from small beginnings in Barcelona, this company has gone from strength to strength to become one of the most recognized and trusted names in vacation rentals for Western Europe. Working to provide luxury accommodation in many cities worldwide, Dailyflats and its Director Mr. Rafael Mastroianni, has one goal in mind- to allow consumers to find luxury apartments at great price with excellent service.
Long gone are the days of complicated searches for holiday rental properties, having to contact owners directly, sign rental agreements, and then after all that having to partake in the lottery of whether or not the property you have found matches the description on the advert. With their simplistic booking system, using Dailyflats to find a holiday apartment and reserving it for your stay, is as easy a buying a flight or getting a hotel.
"More and more people these days are looking at renting a holiday apartment as opposed to a hotel or hostel, but what puts them off is that many people find it complicated dealing directly with the owner." Explains Mr. Mastroianni of Dailyflats, "and after that the quality of the property is always uncertain."
"With Dailyflats, the system is very similar to reserving a hotel room, and once you arrive at the apartment one of our friendly check in assistants arrives to let the guest in and show them around, get them settled in basically, it's a much more comprehensive service and much more personal than staying in a hotel." Says Mr. Mastroianni, "People want to rent properties for their vacation but they need a name they can trust, that is what we aim to provide."
When asked what he thought about the prospects for the Spanish property market Mr. Mastroianni said "We're always optimistic here at Dailyflats, however, in any market it's always a question of growth versus revenue, in the present conditions, due to market saturation and the large number of unoccupied houses the opportunities for growth are limited, therefore making your property available for vacation rental is the ideal way to allow your assets to produce revenue while their value recovers, and in most cases will actually help to speed up the recovery of their market price."
With a new business model and customers looking for more authentic local accommodation at their destination of choice, could this be a sign that the Spanish Property market has finally turned the corner? Recent figures indicate that this could very well be the case, with demand for Spanish holiday rentals up 3.4%, Dailyflats and other companies in this market look poised to take advantage of a new wave of growth in a niche industry.