Renting a house has emerged as an attractive alternative to gain supplementary income, particularly in a time when rental prices have seen a significant surge compared to previous years. However, as with any investment, renting a house carries inherent risks that deserve careful consideration by landlords and property investors alike.

Potential risks of renting a house

1. Renting a house with an insufficient rental contract

A weak lease agreement can lead to severe issues with tenants, including the struggle to demand timely rent payments. Understanding the distinctions between seasonal and residential rentals is paramount.
At DFLAT Madrid, with over 1500 contracts signed annually since 2004, we offer our extensive experience in crafting robust and comprehensive lease agreements.

2. Neglecting tenant solvency verification

Evaluating the financial stability of prospective tenants is pivotal. A real estate professional meticulously examines this matter to select the best-suited candidate, ensuring their solvency and adherence to financial obligations, thereby avoiding problems and inconveniences with delinquent tenants.

While traditional bank guarantees once provided security, their complexity and costs have led to their decline. At DFLAT Madrid, our approach is built on strong relationships with established companies and business schools, eliminating the need for bank guarantees.

3. Rental contract breach

Failure by the tenant to comply with the terms of the agreement can lead to legal complications for the landlord. Having a detailed and understandable contract is essential to preventing such issues.

4. Property damage

Tenants might cause damage to the property, resulting in costly repair expenses and lost rental income during restoration. Conducting regular inspections and documenting the property’s condition can mitigate this risk.

Non-payment can result in financial and legal troubles for the landlord. Implementing payment tracking systems and having a reliable Property Manager can help reduce this risk.

5. Rental payment problems

If the tenant does not pay the rent on time, the landlord may face financial and legal problems to recover the money owed.
DFLAT does not need or request a bank guarantee from our client companies. We have no problems or inconveniences with delinquent tenants.

6. Vacancy concerns

Prolonged property vacancies heighten the risk of illegal occupation and can lead to lost income and additional costs. At DFLAT Madrid, with a 97% occupancy rate, this risk is minimized.

7. Management or trust errors

Lack of transparency or information concealment can generate complications. At our agency, with a rich experience in seasonal rentals in Madrid, we provide comprehensive advisory services and professional contract management, mitigating the risks of renting a flat.

In summary, renting a property can indeed be profitable, but it also comes with some risks. To avert these risks and ensure a successful property rental experience, enlisting the services of a property manager like DFLAT Madrid can make a significant difference.

More information for investors in Real Estate

Visit our page for investors interested in Golden Visa and investors interested in investing in Madrid, or our department for property management if you need an apartment manager.