Iceland has become an attractive destination for many things. It already has film making units landing in droves to shoot their films and shows. Many other business sectors have been opened up by the Iceland government for foreign investors to come and set up base. The real estate sector has also seen healthy growth with a lot of people willing to buy properties in Iceland. They either settle down here or spend some time of the year in Iceland. This has given the business of property management in Iceland a leg up.
Buying Property in Iceland
If you are a foreigner and wish to buy property in Iceland, there are certain governmental clearances to be obtained before you can make a registration of the property in your name. The capital city of Iceland Reykjavik has the most evolved property market. That is understandable since Reykjavik is home to over 60% of the country’s population, the action is all here in this city only. That does not mean properties in other areas of the Nordic country are not bought and sold, but they may be few and far between, well literally so.
Airbnb a Major Player
The concept of property management in Iceland may not be as popular as it is in other countries. The proportion of the local population owning and residing in their own homes will be the majority. There have been increased instances of Icelanders who have settled abroad buying a home in their native land. Some among them may choose to rent their property out to tourists visiting Iceland. This is where international players like Airbnb have captured the market. They offer a wide range of properties for brief stays both in Reykjavik and in the other key spots in the country.
In their typical style, they take over the property from the owners assuring them of a regular income. They then advertise the property on their site to lure the guests. The property owners may want to live in their property for some period in the year. These are communicated to Airbnb so that they don’t take any bookings for that period.
How it Works
Property management in Iceland works the same way as it does in most other parts of the world. The owners of the properties enter into agreements with the property management companies. These could be your neighborhood real estate company even. The property manager takes over the property and makes alterations to make it suitable for renting it out to guests. The owner of the property is assured of an income. This is usually the actual rent collected minus the expenses incurred by the property manager in the maintenance of the property and a certain pre-fixed percentage as commission.
This is a convenient arrangement for everyone. Guests prefer to stay in these properties in preference to the hotels that charge them much higher tariffs. The stay is homely in a residential setting and they can cook their meals as well if the terms of the stay allow it.
With this concept of property management in Iceland catching on, more people may come forward to use the service.
Some Grey Areas Still Remain
There is a distinction between a property owner, a regular resident in the house letting a property management firm manage it for rentals for part of the year and those investing in a property with the sole aim of earning rentals. The latter will be identified by the country’s tax authorities as earning the rental as a business income. This issue is yet to engage the attention of the authorities in Iceland. It may not be long before some changes in the law are made to address this issue.
If you require any assistance in Iceland, contact Swapp Agency.