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PROPERTY

Why you should negotiate lower rent in Spain in 2021 (and how to do it)

2021 will be a good year for those looking to rent a home in Spain for a good price, or to renegotiate what they currently pay. Here’s why and some useful tips to get the best rent.

Why you should negotiate lower rent in Spain in 2021 (and how to do it)
Rental prices in Barcelona have dropped more than in any other city in Spain. Photos: Tibor Janosi Mozes/Pixabay, AFP

There aren’t many silver linings to the coronavirus pandemic if you live in Spain, but the shakedown of the country’s overinflated property market could be one of them. 

Back in August 2020 we wrote about how the dramatic drop in tourists was resulting in more property owners making their short-term rentals in central city locations available to long-term tenants who were previously priced out.

By the end of the year, 64 percent of these holiday lets had been turned into long-term rental properties, and according to property portal Fotocasa at least half of these are expected to carry on catering to permanent tenants in 2021.

“Spain’s main markets have experienced falls in the price of properties due to the significant increase in the available offer, which in some markets has more than doubled” added Spain’s other big rental site Idealista, “as for three months hardly any rental transactions were carried out” due to the strict lockdown.

That hasn’t meant that prices have been driven down evenly everywhere, and there was plenty of volatility in the rental market in 2020 which led to average rents actually increasing in some cities in the midst of the coronavirus crisis.

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But by November 2020, all of Spain’s expert property sites agreed that it was cheaper across Spain to rent than in November 2019.

The biggest drops according to Idealista were in Barcelona (-7.3 percent), Seville (-5 percent), Palma de Mallorca (-4.9 percent), Madrid (-4.8 percent) and Málaga (-4.5 percent).

Property experts forecast that although rents are unlikely to plummet in 2021, price reductions will continue during much of 2021.

This all means that the time is right for tenants looking for a good deal on a new rental property to make a move, or to negotiate the rent they’re currently paying with their landlord.

The following are some useful tips to help you negotiate the best price. 

If you want to stay in your home but pay less:

Find out how much it really is worth

Check on Fotocasa, Idealista and other property sites how much flats in the same area with similar features are going for (size, number of rooms, lighting, year of construction, type of heating, air conditioning, etc.).

Idealista has a useful tool that allows users to compare average prices in different neighbourhoods and even streets.

Another option is to contact a real estate agent and tell them you own the property and you’re looking to rent it out. Invite them round for an evaluation; it’s likely that they’ll suggest a lower rental price than if you were a tenant looking for a place, as their main goal is to sign a deal quickly to get a commission. 

Neighbourhood watch

Are there a lot of ‘for rent’ signs going up in your area? Are many people leaving?

In buildings that are run by companies in particular these trends can give you more bargaining power, allowing you to suggest a drop in rent of €100 or the provision of a free parking space.

It’s also worth keeping an eye out for other properties up for rent in your building so you can see what it’s going for compared to yours.

Collect the data and put pen to paper

Arm yourself with any information you’ve found that strengthens your case, and factor in any possible financial hit that you’ve taken as a result of the pandemic.

It could be that you have the gift of the gab and speak Spanish fluently, but putting your request for a rental price reduction in writing, with all the numbers and information you’ve compiled, will come across as more professional and increase your chances of getting what you’re after, according to property analyst Borja Mateo.

It’s even worth stressing that the rate of non-payment of rent in Spain has increased by 70 percent but that you’ve paid your rent religiously every month (if it’s the case) and that they’ll struggle to find a tenant as trustworthy as you in the current climate.

Make an inventory of the property’s problems

If there’s plenty that needs fixing in your rental property, make a list of all the flaws and find out how much it would cost for them to be fixed or improved.

It could be that the windows don’t have double glazing or the property doesn’t have proper insulation, causing your energy bills to go through the roof in winter.

Get a budget and use this as leverage to either renegotiate your rent down in accordance with the quality of the property, or to at least get the landlord to pay for the repairs or changes that you want. One or the other.

Tell them you’re leaving

If the landlord isn’t budging, tell them that you’re leaving and how they’ll struggle to find a better tenant than you.

If that is indeed the case, they may have enough sense to realise that going to the trouble of finding someone new might not be worth the trouble if what you’re asking for is a rent drop of €50 to €100.

They may also be understanding if you explain your personal circumstances and how increased costs or a pay cut are making it hard for you to make ends meet.

It’s worth calling their bluff as long as negotiations are kept cordial.

Sign a new contract

If they agree to drop the price, get them to draft a new rental contract which you both sign.

Rental contracts signed between 2013 and 2019 fall under Spain’s “Ley de Arrendamientos Urbanos” law, which allows landlords to put up the price after three years.

This clause was changed in 2019 to five years, which may play in your favour if you’ve been living in the property since before then.

If you’re looking to rent a new home

Put the realtors to work

In general, real estate agencies want you to pay as much as possible or for landlords to drop the price as much as possible, anything to make the deal go through and for them to get their cut.

Ring up a few agencies, tell them exactly what you’re after, what you’re willing to pay and say how you’re prepared to pay a few months in advance as a hook.

Keep regular communication with them to convince them that once you find what you want, you’ll agree to it and they’ll get their commission, making it worthwhile for them.

Unfortunately, not all realtors put in the hard grind and yet they still get their one month’s rent as commission if the deal goes through.

There isn’t a law which explicitly prohibits tenants from paying this fee to an agency if they haven’t done anything to help, but there is a clause relating to guarantees.

If they’re unwilling to budge on the commission they got for nothing, ask them for a complaint form and say you’ll take it up with “Consumo” (Spain’s Ministry of Health, Consumption and Wellbeing).

Check how long the listing has been posted

The longer the property has been on the market without being rented, the better the chances you have of being able to negotiate the rent down.

It could be that a stubborn landlord is the main reason why the property in question has been lying empty for months, so if this is the case suggest paying an extra month or two at your rate to cover the losses they’ve incurred.

If you really like the property and a couple months later it’s still empty, try again, explaining to the landlord how by this stage they may as well have rented it out to you at your price given how much money they have lost.

Poker face

It’s an obvious tip but one to always keep in mind: don’t express immediate interest. And take the attitude that the rent is too high no matter how much it is.

Have a look at houses for sale

The same negotiation policy that applies to flats that haven’t been rented in months can also apply to those that are up for sale.

If you find one you like, you can suggest to the owner that they’d be better off renting out to you rather than waiting more time for a buyer to eventually rock up.

You may have to sign a contract which means you have to leave the property with short notice or that you have to allow potential buyers in to see it, but this can also be useful to negotiate your rent down.

Pay less by coughing up more upfront 

If a landlord wants to rent out a property to you for say €800 a month and you consider it too expensive, suggest paying 6 months upfront at €600 per month.

They get security and quick cash whilst you save a lot in the long run.  

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RENTING IN SPAIN

How to rent a property in Spain without a job contract

When looking to rent in Spain, property owners and estate agents often ask for a 'nómina' and work contract - something that can prove tricky if you're self-employed or not working. Here's how to prove your solvency and secure the rental.

How to rent a property in Spain without a job contract

If you’re looking for a house or apartment to rent in Spain, there can be a multitude of different factors to consider.

The price, the size, the location, the neighbourhood, which floor the flat is, on and whether there’s a lift, whether it’s interior or exterior, how many apartments there are per floor, whether to go private or through an estate agents and, of course, the search itself.

When you’re going on visits, you’ll have to contend not only with owner or agent trying to ‘sell you’ the place, but also explaining the terms and conditions (often referred to as las condiciones or requisitos para entrar).

In Spain, the process can be a little complicated. Often landlords ask for two months deposit upfront, and those that go through an intermediary estate agent tend to ask for two months, plus an extra month (plus VAT, or IVA as it is in Spain) that goes to the agent! It certainly adds up. 

Not only that, but very often in Spain you are expected to prove you will be able to pay your rent every month. And it’s not as simple as you might think. 

Most estate agents or landlords think hat the best way to ascertain this is by you providing proof of an employment contract (contrato laboral) and recent payslips (la nómina) that demonstrate you are paid the same amount every month, and that it’s enough to cover the rent and other expenses.

Here’s where things can start to get tricky for self-employed people (known as autónomos in Spain), who number more than 3 million in Spain.

Regardless of whether your monthly autónomo earnings are high pretty much every month, regardless of how consistent they may be, or even if you have regular clients, the irregular and insecure nature of Spain’s work market have ensured that landlords and realtors take a rigid attitude towards the rules.

This is especially true following the turbulent economic times of recent years as we’ve moved from global pandemic to war in Europe to spiralling inflationary pressures on the global economy.

Landlords want to be sure you can pay the rent. Therefore, they may favour a waiter with a nómina of €1,000 a month over an autónomo who can prove monthly earnings double that for the previous six months. Doesn’t seem fair, right? 

READ MORE: Why you should be raising your rates if you’re self-employed in Spain

Well, that’s often how it can be in Spain. Fortunately, if you find yourself in this situation, there are various ways you can convince potential landlords that you are financially solvent enough to rent their property, with or without a fixed contract

The law

Now, it is not unheard of – in Spain nor anywhere else in the world – for an estate agent or landlord to try and squeeze more money out of you, or to add on some extra charges. In most people’s experience, Spanish estate agents and landlords are no better or worse than anyone else, but it’s worth keeping in mind.

It has been known, however, for some in Spain to try and get an extra month’s deposit by telling potential tenants that they need a nómina by law in order to rent a property in Spain, and that they’re doing you a favour by allowing it.

Simply put, this is not true. According to Spanish law, more specifically, La Ley de Arrendamientos Urbanos (Urban Renting Law), although many landlords require some form of financial insurance, there is absolutely nothing to say a nómina is necessary to rent a property in Spain. A deposit is legally required, but a nómina?

Helpful? Certainly. Legally necessary? Definitely not.

That said, if you explain to the property owner that you’re self-employed, some landlords maybe be willing to make other arrangements to ensure the rent.

Here are some options, and other bits of paperwork that could help:

Aval bancario: Like a bank guarantee, some landlords request tenants without nóminas or work contracts to set up an aval bancario.

You must pay in an agreed amount (often worth the value of two or three months of rent, sometimes more) into a bank account that you’re a customer with.

It’s money that you cannot touch for an agreed period of time and which you pay some interest on, and in the event that you do not pay your rent, the landlord will be able to access said funds.

This is not the cheapest way to rent a property, but it may be one of the more effective ways of convincing a landlord to accept you as a tenant.

If you pay your rent diligently every month and prove that you are reliable, after a year you should speak to your landlord to ask them them to cancel the aval in order to not continue paying interest on it and recover your stored money.

Anuncios de particulares: If you’re using the usual rental search engines like Idealista or Fotocasa, the vast majority of rental adverts are from estate agents (inmobiliarias) who ask for all the proper documentation, including contracts and pay slips, and often the extra month’s rent as a fee.

When you’re making your search, keen an eye out for anuncios particulares , which are private ads direct from landlords.

Sometimes if you deal directly with the owner themselves, they are less strict about rules with regards to nóminas and contracts. Maybe you’ll get really lucky and find a landlord that takes a liking to you and who only asks for one month’s deposit.

Seguro de impago de alquiler: A landlord may be more likely to rent to you even if you don’t have a nómina when they have seguro de impago de alquiler, non-payment rental insurance. It protects the landlord for the duration of the contract and covers the rent and any repairs or legal fees.

IRPF: IRPF is Spain’s personal income tax, and providing your most recent income tax return could help put your potential landlord at ease by proving that what you’ve earned over the last year could cover the cost of the rent.

Seguridad Social: Similarly, providing proof of your social security payment can help prove your financial solvency.

Bank statement: a simple bank statement to show account activity – and that you have enough to pay the rent and deposit, of course – might ease the mind of your landlord as it allows them to see your incomings and any debts you might have.

IVA: Showing your VAT (IVA in Spain) returns could be another tool that, when used in conjunction with other ways of proving your solvency, could convince a landlord to rent to an autónomo.

Pensioner documentation: If you’re retired and you’re looking to rent, any official documents which show how much pension money you receive every month, along with bank statement reflecting savings, should suffice to convince a landlord or estate agent that you’re solvent.

READ ALSO: Renting in Spain: Can my landlord put up my rent due to rising inflation?

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