Peter Gracey and his husband, James, swapped their buy-to-let property in Chester for an apartment in Tenerife and say they haven’t looked back – even though the rent they bring in is currently not enough to cover their expenses.
The couple, who live in Hackney, London, wanted somewhere they could holiday and also make an income from when not visiting.
“[Our apartment in Tenerife] has a nice outdoor terrace, large open-plan reception room and kitchen, separate bedroom and bathroom, and it looks out over the bay on to the Atlantic.
“I would recommend it to others as an option – it sorts out two of our five holidays a year,” says Peter, 61, who works as a chartered engineer.
The couple rent out their property through IDILIQ who builds and manages the properties. It partners with the Ramada Residences brand – a hotel chain that look after managed resort properties.
It means the couple – and whoever the property is rented out to – have access to all the Ramada Residences benefits including two pools, two bars, a restaurant, gym, shop and café.
Before buying their Tenerife flat, the pair put their two-bedroom Chester property on Airbnb from 2018 to 2023, using a local cleaner to organise the changeovers, as they lived far away in London.
Peter said: “I bought the house off my brother in 2018 and only had a small mortgage on it. Airbnb covered our mortgage, and we made a small profit, which we reinvested into the property.”
When Peter and James decided to buy their Tenerife home, they took out a buy-to-let mortgage on their Chester property and rented it out to a family for £850 a month, netting them £2,000 annual profit for two years.
This mortgage released funds which allowed the couple to put down a 30 per cent deposit on their Tenerife home, bought for €275,000 (£232,800) in 2024.
Peter says that sorting out a mortgage in a foreign country ‘was stressful’, but he still has no regrets about their investment decisionThey paid a reservation fee of €6,000 (£5,000), their deposit was €76,000 (£66,000), and a mortgage of €192,000 (£162,000) covered the rest.
While it has earned them a rental return of 5 per cent, they had a substantial mortgage and several fees to pay out of this, meaning it was making a loss, so the couple decided to sell their Chester home to reduce their mortgage in Tenerife.
“One of the reasons for selling the Chester house was the Tenerife property wasn’t covering its costs,” says Peter.
“I was already seriously contemplating selling but then there was an issue with the membrane on the roof and that cost £5,000 to fix. We also had to get the inside treated as there was a damp problem.”
It sold in 2025 for £180,000 and the couple used the resulting equity to pay off a chunk of the Spanish mortgage, so the rental income covered the mortgage and all other fees.Peter and James now spend two, one-week holidays in Tenerife a year and rent the property out the rest of the time, using IDILIQ’s managed service.
“It made perfect sense to purchase a property that we can use personally but also enter into IDILIQ’s rental pool to generate an income,” says Peter.
Under the scheme, for two years the couple will only receive a 5 per cent rental yield, regardless of whether the property is rented or not.
After that, returns are based on actual bookings so if it is empty then they would not receive anything, but occupancy is at 90 per cent for the resort – and their flat is booked out frequently.
The pair receive €13,728 (£11,800) a year in rent, after the management fee has been deducted.
They have to then pay €858 (£737) in income tax, €3,600 (£3,094) for cleaning, €1,300 (£1,117) for utilities, €2,000 (£1,719) for service charge and €1,000 (£859) for extras such as the internet. On top of this, their 15-year repayment mortgage comes to €803 (£690) a month, or €9,636 (£8,284) annually.
Whilst this leaves them short by €4,666 (£4,011) a year, currently, as the couple are on a repayment mortgage, they are still paying off the capital and see the home as an investment.
Having had to fork out a large amount to get the damp sorted in their Chester property, the couple have the peace of mind that this won’t happen in Tenerife.
“[IDILIQ] deals with the big maintenance issues, but if there is something outside what is agreed, we pay for that, for example, the base of a parasol on our terrace was broken so that cost us €20 (£17),” explains Peter. Larger costs tend to be across the entirety of the resort, and the service charge would cover these.
“Our buyers can use their residence whenever they wish and are looked after exactly as a hotel guest would be – in their own home,” says James LaVelle, managing director of estates and developments at IDILIQ Group.
“When they’re not using the property themselves, our team can let it out on their behalf. Owners have one point of contact for all of it but, behind that sits a full hotel operation with dedicated teams for property management, maintenance, marketing and revenue.”
While renting out the property has proven to be easy, there have been some stressful moments.
“The whole thing of sorting out a mortgage in a country where you don’t live was stressful,” says Peter.
“We had to use a mortgage consultant over Zoom, and we needed to provide all the relevant documentation and income information that you would in the UK, but it felt different.”
He has no regrets though: “We didn’t buy the property to make money; we just wanted it to wash its face, and we get to use it twice a year. It’s a long-term investment and we will sell it, as it’s a property in a desirable place.”
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