Think long and think hard. It is hard work, and it is not a ‘get rich quick’ business. Running a small Bed and Breakfast with a few rooms in and around your own house, doing the work yourselves if you are devils for punishment , with no staff contracts, no social security, and as I understand it, not needing a licence and not paying taxes, may well be more profitable. Moving out of your own house and letting it during the high season is a hassle, but may also bring you in more cash.
Decide whether you are a Hotel or a Guesthouse or Tourist Apartments – different norms are applicable for obtaining your licences. Whatever you choose, make this clear in advance to potential guests who need to know, for example, whether or not you have a permanent reception and a porter! If you do breakfasts (I opted for self-catering) realize the Spanish eat breakfast as from 11 a.m., the English like theirs around 8.30 on holiday and like fresh milk with their tea, the French are disappointed in the standard of the local croissants; there is no one universal standard for the best coffee.
Estimate your investment, and add half again for what you have forgotten or what is foisted upon you by local regulations. Estimate the time it will take to (re) build and add half again for delays caused by bureaucracy and weather and regular Spanish holidays. Involve your neighbours and assure yourself of their goodwill – be aware of the unpleasant but commonly accepted custom in Spain of denouncing your neighbours anonymously if you suspect them of any illegal activity, rather than talking to them first to try and solve issues before they become problems. We tried all this, it failed – we had to denounce, but not anonymously!