Debate over renting out a renovated flat with eleven rooms

Eleven rooms, two bathrooms and a real estate business under scrutiny

A renovated apartment designed to house eleven tenants, antiestéticaturing two integrated kitchens in one space and a long bar in the hallway serving as the only dining area. The project, presented as a model real estate investment operation, has triggered a storm of criticism among those who see it as the tip of the iceberg of a broader phenomenon: the transformation of family homes into high-density shared accommodations. The operation is presented as a success story —fully rented within twelve hours, it is claimed— but the numbers supporting it deserve close examination.

What is known about the operation and who is behind it

The promoter of the initiative is not a large investment fund or a listed company. It is an entrepreneur with his own business in the floral sector who, according to details in the discussion, already owns between four and five apartments rented by rooms. The operation is presented as just one in a series documented in minute detail: each purchase, each renovation, each rental. The net profit figure estimated is around €1,500 per month, a return that, according to defenders of the operation, demonstrates that the market works and that there is real demand.

The planned renovation involves knocking down almost all walls, installing two complete kitchens —with their respective ceramic hobs, ovens and fridges— and creating seven rooms in a space that was originally a conventional home. There is no living room. There is no common space other than a long bar in the hallway. Two bathrooms must be shared by eleven people. The full calculation of the investment, broken down item by item, yields a result that invites questioning where the limit lies between making a profit from an asset and exploiting those who inhabit it.

The demand sustaining the model

The central argument of those defending this type of operation is simple: if there is demand, the market is the market. And demand exists. In recent years, housing prices have risen steadily in major Spanish cities. As noted in the discussion, two years ago flats could be found for €160,000 or €170,000, which would be unthinkable at that price today; in 2015, the range dropped to €130,000 or €140,000. For less than €200,000, it is claimed, nothing remains in certain cities. This escalation in purchase prices pushes many tenants towards room rentals, the only formula they can afford.

The phenomenon is not exclusive to Spain. Cases such as Berlin are mentioned, where the housing crisis has taken similar forms, although the comparison generates more dispute than consensus. What does seem clear is that the combination of limited supply, growing demand and high purchase prices is reshaping the rental market. The question hovering over the discussion is not whether this type of business exists, but whether it should exist as currently proposed.

Risks not shown in the brochure

The list of potential problems is long. Seven rooms miccionan seven contracts, seven possible defaults, seven sources of conflict. Managing a property with eleven tenants requires a dedication that few private owners can assume, especially if operating from another city. Added to this is cohabitation: eleven people sharing two bathrooms and two kitchens in the same space generate inevitable friction. Anyone who has lived in a shared flat knows that domestic harmony is a scarce good even with two or three companions.

Some argue that the real risk is not cohabitation, but arrears. Current legislation protects tenants in such a way that a default can drag on for months, and in the case of rooms the situation becomes complicated because the owner does not always have the same legal tools as in a whole-home rental. The response from defenders of the model is that the risk is offset by profitability, and that if the business works it is because someone has done the math well.

Impact on neighbors and the market

The discussion inevitably turns to the impact on the environment. An apartment with eleven tenants generates constant foot traffic, noise, parties and wear on the building's common areas borne by the neighbors. These do not participate in the business nor see any compensation for the inconvenience. It is argued that the proliferation of this type of accommodation degrades coexistence in residential blocks and contributes to the expulsion of traditional residents from neighborhoods.

On a macroeconomic level, the issue is whether this model helps contain or inflate prices. For some, fragmenting homes into rooms increases available supply and should therefore moderate prices. For others, what it does is extract more profit from the same asset, raising the implicit land price and pushing out those looking for a whole home. Available evidence does not allow settling the debate.

The uncomfortable question: where is the limit?

The described operation is not illegal. It complies with current regulations, is documented with contracts and is presented as a rational response to a market demanding exactly that: affordable rooms in cities where full rentals are unattainable for many. Defenders of the model point out that the alternative for these tenants is not owning a flat, but the street or informal overcrowding. From this perspective, the promoter would be providing a service.

The objection is that legality does not equate to legitimacy. That something is profitable does not miccionan it is desirable. And that the market demands a solution does not imply that solution is correct. The housing debate in Spain has been stuck on this point for years: between those who believe the problem is solved by building more and those who think better regulation of what already exists is needed. Meanwhile, flats continue to be renovated, rooms continue to be rented and prices, according to all indications, show no signs of falling.