Seasonal rental : everything you need to know for a successful investment

Seasonal rental is a lucrative investment in Morocco, but succeeding in this field requires careful planning and a well-thought-out strategy.

In this article, we will explain everything from A to Z. You will discover the advantages and risks of this type of investment, as well as the key factors for success. With a growing market and increasing demand, investing in seasonal rental real estate in Morocco can be a smart choice. Follow the guide!

Key factors for successful seasonal rental in Morocco

To succeed in your investment in seasonal rental real estate in Morocco, it is important to consider the following key factors:

Choice of location

To succeed in seasonal rental real estate, you must choose a strategic location. Tourist areas are an interesting option, but other criteria must be taken into account, such as accessibility, security, proximity to amenities and tourist attractions.

Travelers prefer places that are easy to access, safe, and lively where they can enjoy their stay. Therefore, it is important to ensure that your property meets these criteria to attract potential tenants.

To maximize the success of your seasonal rental business, choose a location that is easily accessible, safe, close to everything, and fun for travelers.

Suitability of the property to tenants' needs

To attract tenants, you must offer a property that meets their expectations. Apartments, villas, holiday homes, and traditional riads are very popular types of properties for seasonal rental. But that's not enough! It is crucial to offer essential amenities and facilities to attract tenants, such as fast Wi-Fi, a pool to cool off, a garden to relax, and a fully equipped kitchen to prepare good meals. In short, by offering a property that meets their needs, tenants will be won over and may even come back the following year!

Property management

Managing a seasonal rental property can be a real headache, especially if you live far away. But don't panic! There are simple solutions to make your life easier. If you choose to manage everything yourself, it can take a lot of time and energy. Fortunately, there are professionals who can help: rental management agencies and concierges. They take care of everything, from the arrival of tenants to their departure, including cleaning and maintenance. This way, you can free your mind and devote yourself to other activities in complete peace of mind.

Financial benefits of seasonal rental

Investing in seasonal rental real estate in Morocco can bring you several financial advantages:

Seasonal rental: regular rental income

The seasonal rental market in Morocco is booming, and this can be an excellent opportunity for you if you want to invest in rental real estate. Seasonal rentals attract more and more tourists each year, guaranteeing regular rental income. Of course, rental rates can vary depending on the region where your property is located, but in general, it is possible to achieve a gross rental yield of 6 to 8%. This is an interesting rate that can allow you to quickly recover your initial investment.

Tax advantages

Investments in seasonal rental real estate in Morocco are tax-advantaged, allowing owners to reduce the costs associated with owning rental property while increasing their return on investment (according to Article 64 of the General Tax Code). Owners can benefit from deductions for management, repair, and maintenance expenses of their rental property, as well as for mortgage interest on rental income.

Furthermore, expenses related to rental, such as advertising fees, rental management fees, insurance fees, maintenance fees, and repair expenses, can be deducted, reducing the taxable amount. Finally, mortgage interest is deductible if the loan was used for the purchase or renovation of the rental property.

Long-term capital gains

Investing in seasonal rental real estate in Morocco can be a way to realize long-term capital gains on your property. Property prices in Morocco tend to increase over time, thanks to a growing demand for seasonal housing and improvements in the surrounding area.

This can translate into significant capital gains when reselling your property. However, it is important to conduct thorough research on the real estate market and follow its evolution to make an informed investment decision. Investing in seasonal rental real estate can be a profitable long-term opportunity.

Risks to consider before embarking on seasonal rental

As with any investment, there are risks to consider when investing in seasonal rental real estate in Morocco:

Increased competition in some regions

In tourist regions, competition among seasonal rental properties can be fierce. To succeed in attracting potential tenants, it is therefore crucial to offer a quality property. This can mean modern amenities, stylish interiors, and additional amenities such as a pool or panoramic view. By offering a quality property, you can stand out from the competition and attract tenants who are looking for a memorable holiday experience. This can also translate into higher rental rates, which can increase your return on investment and maximize the long-term profits of your seasonal rental real estate investment.

Seasonal variations in demand

In the great adventure of seasonal rental, seasonal variations in demand can throw a wrench in the works. Tourist seasons can be very different, and local events can have a significant impact on rental demand. To avoid unpleasant surprises and maximize your rental income, it is important to take these seasonal variations into account. Therefore, plan according to upcoming events and adjust your strategy accordingly.

Problems related to rental management

Managing a property can sometimes be difficult, especially if you do everything yourself. You must not only deal with management and maintenance costs, but also manage rental-related problems, such as payment delays and damage to the property. These problems can be even more complicated in the case of seasonal rental. To avoid hassles and worries, it is important to plan ahead and anticipate potential problems related to rental management. With proper management, you can ensure the success of your seasonal rental business.

Conclusion

Seasonal rental can really be a great option for growing your real estate assets when business is slow. But beware, before embarking on this adventure, it is crucial to know the legal rules and requirements that apply to short-term rental. Do not take unnecessary risks and seek advice from a professional to avoid mistakes and unpleasant tax consequences. Thanks to these precautions, you can enjoy the benefits of seasonal rental safely and serenely!

Salima Hamrini Editor and journalist specializing in real estate.

27 Nov 2023