Having an empty apartment implies facing a series of expenses, which is why many owners consider selling or renting it.
From the financial comparator analyze in which cases each of these options is appropriate.
10% of homes are uninhabited in Spain, according to the INE. But having an empty apartment does not generate any profitability and implies facing a series of expenses that, depending on the type of property, will be more or less significant.
That is why many homeowners are wondering what is the best way to make a profit with housing: sell the flat or rent it? The experts of the financial comparator empty apartment answer this question.
What Expenses Should I face If I Have An Empty Apartment?
The most important expenses that we must face for having an empty apartment are the following: supplies, spills, the community of owners fee, home insurance, and taxes. With regard to supplies, it is important to know that they have a minimum maintenance cost, so we will have to pay for them even if we do not record any consumption unless we cancel them.
On the other hand, the average share of the community of owners in Spain is 600 euros per year and standard home insurance has an approximate cost of 200 euros per year.
At the same time, it is important to bear in mind that an empty floor is also taken into account for income tax, and for IBI, they comment from HelpMyCash. According to the regulations of the Treasury, any apartment that is not a habitual residence is likely to generate income. In other words, the treasury understands that an empty house can generate income for its owner and, therefore, personal income tax must be paid.
With respect to the real estate tax, it is a tribute that is levied on the possession of the property. Therefore, we will have to pay it whether the house is empty or occupied.
In this sense, it is important to add that the new housing law is under treatment. One of the agreements that have been reached consists of applying a 50% surcharge on the IBI of empty flats, understanding that empty homes are those that are unoccupied for more than two years.
For all this, many owners begin to wonder what to do with the uninhabited property so as not to face all these expenses. Selling and renting are two possible alternatives, but which is the most convenient?
When Is It Better To Rent It?
The gross rental profitability across the country in 2020 was 3.7% according to the Bank of Spain. This means that if we have a flat of 250,000 euros, we will be able to obtain an annual gross income of 9,250 euros, although these could increase if the flat is in high-demand cities, such as Madrid or Barcelona, they comment from Flexible Solar Panels.
This is undoubtedly an advantage. But also, a home takes, on average, two months to rent in Spain, so we could earn income in the short term.
Now, if we decide to rent the house we will have to bear in mind that the management of the lease involves a lot of time and dedication, especially if there is a rotation of tenants. We can always delegate the procedures to a real estate agency, but then we will have to consider that the profitability of the rental will be lower.
In addition, we must bear in mind that in this case, we will also have to face the payment of the IBI, the personal income tax for the annual income, and the community of owners. This is not to mention the spills, which usually appear when we least expect them and require the disbursement of a significant sum of money.
In short, renting is a good option if we want to make the empty apartment profitable quickly and keep it and if we are willing to carry out the necessary procedures or to hire a real estate agency and lower the profitability of the rent.
When Is It Better To Sell An Empty Apartment?
The main advantage of selling the apartment is that we free ourselves from the responsibility of maintaining the home, managing the rents, and paying the expenses associated with owning the apartment. But, in addition, the sale allows us to obtain immediate liquidity and, if we wish, we can reinvest the money to obtain higher profitability, they add from the comparator.
Among the disadvantages of the sale, we can mention the expenses and taxes that we will have to pay (such as IBI, personal income tax, and agency fees). In addition, the operation also requires our attention and dedication, but this effort is not prolonged in the long term.
Thus, selling the apartment will be the most convenient option if we want to obtain immediate liquidity, for example, because we have an outstanding debt or because we want to invest the money in another more profitable asset, or if we do not want to spend the time it takes to rent an apartment,