A client bought a new one bedroom flat in a modern building close to the Marina in Gibraltar. He asked me about renting it out to be able to generate income and pay for rates as well as to obtain a decent return on the investment. My answer was quite straightforward – put it on the rental market. There are several different ways to do so in Gibraltar:
Done via local adverts in several newspapers, which still works to an important extent. Just putting a well-placed small advert with your contact details may well be enough to bring positive results.
Specialised property websites
These websites do offer excellent results and are normally extremely cost effective. These can be viewed by a large number of future clients anywhere in the world. Often a booking can be generated shortly after a physical viewing is done. There are quite a number of these websites in operation and my advice is to use as many as you can. The more the merrier is the case with this excellent marketing tool.
This is a good solution to your problem if you do not wish to get involved or if you do not live in Gibraltar. There are plenty of estate agents who can do a professional job for you. They will find you a client and check their references on your behalf. Draft the relevant contract which is normally done for twelve months. Collect your deposit of one month plus the current month of rental money. Transfer the money to you as per your instructions and handle all the necessary requirements related to the rental of your property. In exchange, they will charge you a fee; normally one month´s rent on a twelve-month rental agreement.
In addition to all the services mentioned above, the estate agent will give you the correct guidance as to what to charge on a monthly basis for your property. Make sure you stick to a realistic figure so your house gets rented out within a reasonable time frame.
Another way to gain good income is to do short lets or holiday lettings. Nowadays, this has become very much in fashion and, if well managed, a property may yield substantially more income than if let out on a long term basis. But, like many things in life, nothing is achieved for free and the marketing costs are much higher, as well as the management of the property plus the marketing management. This option works if you have the time and dedication to run it. You do not necessarily have to live locally, although it would certainly be easier if you do. In case you are away you will need a local person or an estate agent who can manage your arrivals and departures plus cleaning, laundry and all the necessary requirements that a holiday home needs. The better the service you offer the higher the rental amounts you will get.
To market a holiday home will require you to work with as many specialised websites as possible. Booking.com is expensive but extremely efficient and does produce a lot of customers, particularly during the dry weather season from April to October. Make sure you read all their conditions as they are quite strict in some respects. HomeAway offers the opportunity to work with them on a yearly-fee basis and make deals directly, which is my advice if you are 100% into the holiday rental market. Alternatively, you can work on commission which may prove successful, but again you will not have full control and cannot speak to the client on the telephone; this can sometimes mean the difference between closing a deal and losing it. HomeAway may charge a little less but it is worth having as they do have an excellent reputation. Airbnb seems to be very much in vogue and their charges are most reasonable. They do produce results and give you the freedom to accept or turn down a client. Rentalia and other Spanish websites may also be worth looking into.
Holidayrentals.com (part of TripAdvisor) work along the same lines as HomeAway and are highly professional – and there are quite a few more in the market. Make sure your property is on as many websites as you can manage. All these websites have to be updated regularly with your prices for different seasons plus an accurate calendar of availability. You must either do this job yourself or have someone do it on your behalf. No shortcuts I am afraid. Only hard work produces results.
Some important points to bear in mind:
Customer satisfaction. This is top of your list. Remember that good references from customers are essential in this business so as to improve your reputation. This works wonders to attract others into your property, no matter the size or type. Just make sure it is all in order.
Immediate response to customer enquiries. You are not on your own. Competition is fierce, so make sure you answer immediately upon receiving an enquiry. A smartphone with the correct applications works like magic.
Spoil your clients. Make sure that you really look after them by going that step further. Help them with anything related to their stay. Give them first class information about Gibraltar and its surroundings.
Another client of mine who is highly successful at this game always makes sure there is a bottle of Cava in the fridge to welcome his clients and plenty of small bottles of mineral water, as well as some amenities in the bathroom. The cost is minimal and results are improved considerably because of these small gestures.
Just to give you an example of how well this works, a local client of mine decided to stop renting his villa in Sotogrande on a long term basis for which he was getting just under €2000 per month, and decided to go into the holiday rental market. He is now making between €35,000 and €50,000. Naturally, he is working hard with all the websites and holiday accommodation search engines but it has most certainly made a tremendous difference. He then decided to do it with two studio apartments in Gibraltar. His income almost doubled.
There is surely a steady income to be made from renting your residential property in Gibraltar; how you get there is up to you.