In recent years, investment housing has been one of the most attractive options. Due to lower deposit and bond yields and high stock market volatility, many people have jumped into the ranks of buying and renting homes.
The business world has also taken a gamble. According to the data, the profitability of buying a house in summer and renting it is 7.9%. A study carried out by the Rental Negotiation Agency (ANA) states that this investment can bring more benefits to small owners than to large ones.
Whenever we talk about investment, the most common belief is that the company will benefit most, either because it has more knowledge and experience in this area, or because the laws and regulations related to renting benefit them. The situation is quite the opposite: by buying a house and then letting it out, the private owner will not only get the highest income, but also the highest income. When analysing the current legislation on renting, it is certain that when the landlord of the house to be rented is a natural person, as opposed to a commercial landlord, renting has a better legal and fiscal treatment.
In five specific situations, the balance is biased towards individuals, to the detriment of legal entities:
Tax relief: Private owners currently enjoy relief on their income tax returns. In particular, this is a state tax exemption of 60% of net rental income. If the owner of the house is a legal entity, the losses will be reduced, but those companies that have the purpose of investing in the house and have a more favourable tax system, such as funds, social groups and large owners.
Shorter term: Similarly, if the owner of the house is a commercial company, the term of the lease will be longer, as in this case the tenant can rent for up to seven years; on the other hand, if the owner of the house is a natural person, the term of the lease is five years.
Reduction of costs: The study also recalled that in the case of legal entities, the costs of managing and formalising the rental contract (lawyers, estate agents, etc.) must be borne by them, and when the lessor is a natural person, the cost is transferred to the tenant.
Recovering the property in case of need: Another advantage of natural persons is that they can recover their rented house if necessary before the fifth year after the expiry of the lease. On the other hand, corporate owners cannot do this because the law restricts this reason for repossessing rental homes to individuals.
Earlier repossession of housing on eviction: The fifth benefit highlighted by the study is that in the case of corporate landlords advocating for evictions, with the exception of large landlords, when the court determines that the tenants being rented are in a vulnerable position, they can suspend the launch for a period of time for as long as one month in the case of an individual.