With the arrival of autumn in Spain, interest in renting housing among students traditionally increases. Property owners in university cities such as Madrid, Barcelona, Malaga, and Valencia assess how profitable it is to rent their properties to students. High demand, short-term contracts, and potentially higher returns make this option attractive, but there are important specifics to consider.
Advantages of renting to students
Renting by the room often provides a higher income than renting the entire apartment to a single family. Students typically stay for the academic year and vacate the premises in summer, allowing the property to be used for short-term rentals during the tourist season. In addition, financial guarantees are usually provided by parents, reducing the risk of late payments.
Types of contracts and their specifics
There are two main approaches: renting by the room and renting the entire apartment to a group of students. In the first case, relationships are governed by the Civil Code, not the Urban Lease Law, which lessens tenant protections and gives the owner more flexibility. Terms and conditions are set individually, with no mandatory renewals. The contract should clearly specify which room is assigned to each tenant and prohibit subletting.
If the entire apartment is being rented out, the Urban Lease Law (LAU) applies, granting tenants greater rights. The contract must specify all terms in detail, including payment responsibilities and renewal procedures. If the lease term is less than one year, this must be clearly stated in the text; otherwise, LAU provisions automatically apply.
Practical details of renting to students
Students most often look for furnished apartments with good internet and locations close to universities or in lively areas. To speed up the rental process, it is recommended to choose functional and modern furniture. A security deposit is required to cover any potential damage. Additionally, landlords often ask for bank or personal guarantees, usually from parents, who sign the agreement as joint guarantors. It is important to compile a detailed inventory of the apartment’s contents and condition to avoid disputes when tenants move out.
Lease terms and tax considerations
There is no legal limit to the maximum duration of student leases. Typically, a seasonal contract is used for the academic year, and it is important to substantiate the temporary nature of the rental. If the property is being let as a primary residence, the minimum term is five years (seven for legal entities), with the option for annual renewal.
Property owners may be eligible for tax benefits when renting out housing to students. Although tax authorities sometimes do not recognize such leases as permanent, courts uphold the right to reduce rental income tax—in some cases by 50% or even 90%. To receive this benefit, it is recommended to submit an application if the tax authority does not apply it automatically.
Which is more profitable: renting to students or tourists?
There is no single answer: profitability depends on the type of tenant, the characteristics of the apartment, and the city. In major cities, long-term rentals to students or young professionals often provide stable income, especially for individuals. At the same time, short-term rentals in tourist areas can be more lucrative but require greater involvement and carry additional risks.
