Investing in room rentals in Gibraltar? Now is the time!
Rentals in Gibraltar? Do you have a large apartment with several bedrooms or are you going to buy it with the objective of renting it?
Perhaps, your initial idea is that of a classic rental, that is to say, a lease of the entire apartment to the same family unit.
However, let us tell you about the type of rental that is gaining more and more popularity in recent times: it is the rental by rooms. A formula that, if well planned, can become a very profitable investment.
Renting rooms is nothing new; it has always existed, especially in cities or university neighbourhoods, where the tenant profile is students who share an apartment since they cannot afford the cost of renting alone.
However, with the rise in traditional rental prices, room rentals are emerging as an excellent alternative for owners of large homes, -with 3 or more bedrooms- and with a central location. And the fact is that renting shared housing has its best profitability in urban centres.
Types of real estate investments – Rentals in Gibraltar
There are several types of real estate investments and all of them can be a good option for an investor with a good nose for business; although the success of the operation will depend on several factors.
Probably, the first modality that comes to mind is to buy a house, either new or second-hand, to resell it later. This is also known as house flipping.
The profitability of this investment will depend a lot on the attractiveness and revaluation potential of the property, either for its location, state of conservation, and qualities or because the building has common areas, a swimming pool, a gymnasium, etc.
An option that is also beginning to gain relevance is real estate crowdfunding, a formula by which a person can finance projects anywhere in the world, with small amounts of money. In this way, one can invest in an office building in New York, an apartment building in Paris, or a hotel in Singapore.
As with traditional crowdfunding, the investor receives a return proportional to his participation. Undoubtedly, this modality is a good way to get started in real estate investment, and there are multiple platforms dedicated to it.
Finally, we would like to highlight the buy-to-let modality, either the property as a whole or by rooms. Unlike house flipping, the owner keeps the property and receives a periodic and sustained benefit over time, thanks to the lease. An excellent option!
Entire apartment or per room
Calculating the profitability of the property in order to choose between renting per room or per complete apartment is not simple. This is because there are many factors that have an impact on this field. The place where the property is located, the state of demand and supply in that area (and for homes like yours), the number of rooms in the property, and also the number of bathrooms it has, are aspects that will outline whether it will be profitable to rent per room or per complete unit.
For example, if your apartment has two bedrooms, you will probably get a better result if you rent the property as a whole. If it has three or four, you can start to consider it as an option.
The price of rent is on the rise
The price of rent has experienced a significant increase in Gibraltar in recent years. The price of a room ranges from £450 plus expenses for a single room to the £675 plus bills that a double room can cost.
This has meant that the modality of renting by rooms is gaining more and more strength, compared to traditional renting.
Likewise, this rise in the prices of integral renting has forced many people to opt for flat-sharing. They may be employees of the same company, close to the apartment. This is what is now known as “co-living” and is very current.
But they can also be tenants who did not previously know each other until the moment of sharing housing.
The tenant profile of this modality has changed and is no longer concentrated mainly on students, but has been extended to other profiles.
Room rentals can bring us clearly higher profitability than traditional leasing.
But it also has other advantages. By having several tenants, certain risks, such as the possibility of non-payment or major damage, are significantly reduced.
However, some landlords are still reluctant to rent by rooms and prefer the classic lease from the outset, because they consider that renting by rooms usually entails a short-term contract when what they are looking for is a tenant or tenants who will remain in the property for a long time.
But, as we have already seen, the generalized rise in traditional rental prices has led many people to opt for renting a room, given the impossibility of assuming the cost of a full rental. This has also led to a change in the tenant profile, which is no longer exclusive to students and people “passing through”.
In short, nowadays, a room rental does not necessarily have to be for a short period of time.
Factors to consider to get the maximum return on your investment per room
It is clear that by renting 3 rooms at the lowest price, the owner would already get 20-25% more profitability than if he rented the whole house.
What seems obvious is that, from 3 bedrooms onwards, it starts to be more profitable to rent by rooms.
If you have several properties, which means being able to rent more rooms, this modality would be even more profitable.
So, if you have a large property, with 3, 4 or more bedrooms located in a good area, well connected and with many services nearby, as is the case of the Eurocity residential complex in Westside Gibraltar, we recommend you to consider renting by rooms to get higher profitability.
The best areas to invest in room rentals
Surely you are wondering what are the best areas to invest in room rentals.
This depends on several factors and we can not establish a ranking, but what is clear is that a quiet area or neighbourhood, close and well connected near the centre, well connected by public transport, with all kinds of services, medical and educational centres, as well as green areas, will always be in demand and will be attractive to a potential tenant.
As we have already seen with the example of the Eurocity residential complex, it will always be a preferable option, since the owner will be able to obtain higher profitability.
Off-plan Resale in EuroCity – This stunning apartment is located on the fourth floor of the Murano building with fantastic outdoor terraces and state-of-the-art interiors. This is one of the largest apartments in Gibraltar and provides all the home comforts you could need. Podium level with direct access to pools.
This superb new luxury development is centrally located with beautiful, landscaped gardens, decked terraces and pools, concierge service, a gymnasium, shops, cafes, and restaurants.
• Every apartment is complimented by quality, high-specification finishes, fixtures, and fittings.
• All apartments have their own balcony.
• including a fully fitted kitchen with an instant boiling water tap, heated towel rails, anti-fog mirrors, under-floor heating, and concealed Bluetooth speakers in en-suite bathrooms.
For more information or to arrange a viewing, please contact our sales specialist, Vishal Mulchandani, he can assist you in English and Spanish, Tel: (+350) 56285000 – Email: Sales@century21gibraltar.com.
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