The New Vivienda Vacacional Law: Less Supply, More Earning Opportunities for Investors
Why Investing in Canary Island Vacation Rentals Is a Winning and Safe Choice with the New Law
The impending entry into force of new vacation rental legislation in the Canary Islands, scheduled for the end of 2024, has raised great interest and some concern among real estate investors. The new regulations impose stricter standards for properties intended for tourist rental, but for those who know how to seize the opportunity, this law opens the door to a valuable market with a much higher potential economic return. Below we explain why demand for vacation rentals will not only remain strong but continue to grow, and why complying with the regulations now is the most advantageous strategic choice for investors.
Vacation Rentals: An Essential Sector with Growing Demand
The Canary Islands are a popular destination for tourists from all over the world because of the pleasant year-round climate, natural beauty and cultural richness. For these reasons, the short rental market may never disappear; in fact, demand for vacation rentals is expected to grow even further. The Canary Islands attract a continuous flow of tourists, and short rentals in independent apartments are becoming the preferred choice for those visiting the archipelago, especially among more mature travelers and families.
New Tourism Trends: Private Apartment is the Preferred Choice of Tourists
Today, tourism has changed, and travelers are looking for more free and flexible experiences than those offered by hotels. More and more tourists, especially older ones, but also families and groups of friends, are choosing to stay in private apartments for a number of specific reasons:
- Freedom and Flexibility in Catering
Apartment guests are not bound by hotel menus and schedules. They can choose to cook their own meals, perhaps using local, wholesome ingredients, and have the freedom to eat when they prefer. This independence is a unique advantage that is increasingly appreciated by travelers who want an unencumbered stay.
- Larger and More Comfortable Spaces
Apartments offer much more generous space than hotel rooms, which are often limited in terms of square footage. Having a living room, a kitchen, separate rooms and even a private garden or terrace allows guests to fully enjoy their stay, feeling like home but with all the comforts of a vacation.
- Flexibility in Schedules
With an apartment, tourists can manage their time as they please, without being tied to meal times or cleaning schedules as in a hotel. This flexibility is especially appreciated by travelers who want to enjoy the destination at their own pace, without imposed limits.
- Personalized Services and Greater Authenticity
Vacation rental owners often offer personalized welcome and services that are not possible in hotels, such as advice on local activities, leisure facilities, and suggestions for fully experiencing the local culture. For many tourists, this makes for a more authentic and enriching experience than staying in a traditional hotel.
- Unique Local Experience
Apartments allow tourists to immerse themselves in local life, visiting markets, cooking typical dishes and living like residents. This authenticity is increasingly in demand by travelers who seek authentic and personalized experiences that are hard to find in hotels.
The New Law: Less Supply, More Earning Opportunities for Investors
The new regulations impose quality and sustainability standards that many owners may decide they are unwilling or unable to support. The reasons for this will vary: some owners will not have the funds for the required adjustments, others will not fully understand the potential of the market or will decide not to invest for personal reasons. In addition, increased controls will limit the activity of irregular vacation rentals, further reducing competition.
This decrease in the supply of tourist accommodation will produce immediate effects on the market: an increase in demand for vacation rentals in good standing and an increase in prices for short rentals, with higher returns for investors who will have adapted to the new requirements.
Benefits of Immediate Adjustment for New Investors
Compliance and Serenity for Investment
Adapting to the new standards now means making sure you comply with all regulations, avoiding the risk of having to take action in the future to comply or, worse, having your license revoked. Those who purchase and adapt their property right away will be able to operate peacefully in the tourist rental industry without fear of the new controls.
Increase in the Value of the Property
Properties that meet the sustainability and energy efficiency standards required by the law will increase in value. Energy efficiency, climate control systems, and access to modern infrastructure (such as electric vehicle charging) not only add intrinsic value to the property, but also meet tourists’ demand for comfort and sustainability. This appreciation of property value is a major benefit for long-term oriented investors.
Reduced Competition and Increased Demand.
With a reduction in the supply of vacation homes due to the new requirements and increased inspections, compliant properties will become even more in demand. Those who choose to invest now will therefore have less competition and will benefit from increased demand, earning higher profit margins than at present.
A Higher ROI: More Investment, More Profits
Adapting to the new requirements involves an initial investment, but the benefits far outweigh the costs. With less competition and stable demand, prices for short rentals will rise, providing much higher returns. The return on investment (ROI) will be higher, and those who comply now will be able to earn higher profits in a regulated and secure market.
Contact us for Support in Renovation and Adaptation
If you are considering the purchase of a vacation home or already have a property that needs to be retrofitted, we are available to support you in renovating and bringing it up to the new standards. With our team of compliance and sustainability experts, we can help you enhance the value of your investment and position you in a market that will reward quality and sustainability.
Investing in vacation rentals in the Canary Islands is a strategic and forward-looking decision. The new regulations, with reduced supply and increased controls, will create a favorable environment for those who meet the required standards. With continued high demand and limited competition, the vacation rental market promises a future of growth and high returns for those ready to invest in a compliant and competitive property.