The boom experienced by the rental market in Spain is such that housing has become a very safe product for investment. In this context, a new business is growing related to the rental of apartments, which consists of advances for rent.
“It’s a product with a long history in Spain,” says Juan Ferrer, CEO of Me Renta, a newly-born company dedicated exclusively to promoting rentals to owners.
“Us “We are an intermediary that works with investors and funds and connects them with owners who need immediate liquidity and who can get it by selling rights to receive future rent,” explains the manager.
The company, which has already closed transactions worth 2 million euros since it began its journey in February, expects to end the year at seven million euros“The growth expectations are very high and there is no problem finding capital for this type of operation,” Ferrer emphasizes.
Me Renta allows advance payment up to 88% of the rental cost houses, with maximum 100,000 euros per property and for a period of up to 3 years.
Thus, the manager points out that for a rent of 1000 euros per month, if an advance payment is requested for a year, the owner will receive 88% of income amounting to 10,560 eurosand if you ask for an advance three yearsa large discount will be applied. So will receive 70% of the total income, which is 25,200 euros.
“This is not a loan, but an advance. The owners will not have to return this capital.”– Ferrer clarifies, emphasizing that similar operations have already been carried out in the sector with large owners.
“What we do through MeRenta, deliver this product to private individuals offering them the opportunity to receive immediate liquidity requested online, in a fast and flexible process,” the manager explains. After the transaction is closed, Me Renta is responsible for managing the collection of tenants and assumes the associated risks.such as the ability to leave the property or illegal occupation. In these cases, non-payment is covered, so any problems during the rental advance period will not affect the owner.
“Rent increases are like something that has existed all our lives in terms of billing, we have moved to rent increases,” says the manager, who believes that the introduction of this model in Spain “highlights the ability of the real estate sector to adapt and innovate, offering new financing options.”
The business allows rental property owners to get immediate liquidity. “Instead of selling the property or taking out a bank loan, they can convert their future income into cash today,” Ferrer explains, noting that clients use it to to resolve temporary situations where capital is needed for reinvestment in other businesses, not just real estate, or as a method of obtaining financing in the case of the self-employed, that in many cases it is not so easy for them with the bank.