Rental Profitability in Spain Has Increased
What is the annual percentage yield of rental real estate on the Costa Blanca? The Idealista portal published a new detailed analysis of the profitability of investment real estate in Spain, according to which the payback of investments in housing has increased by almost two points over the past 5 years.
According to the analysis, the profitability of residential real estate this year will average more than 7% across the country. This is almost 2% higher than five years earlier.
Moreover, it is precisely the real estate on the coast that shows the maximum growth, unlike the major administrative centers and even Madrid.
Thus, the yield of rental real estate in coastal areas has increased to 7.3% per annum (2017 index was 4.9%). Costa Blanca is among the leaders in growth.
However, in Madrid and Barcelona, the growth was about 1 point, up to 6.1%. This is due to the record growth in the cost of real estate itself, which rent does not keep up with.
What determines the profitability of apartments for rent?
There are many factors. But the main one is, of course, location.
Costa Blanca is a leader in this respect.
The demand for housing rentals on the coast is always high, and investments in real estate remain the most reliable even in the long term.
Moreover, in recent trends, the move to the sea, not just vacationing, is evident. More and more people strive to live in small towns with good ecology, a pleasant climate, and a relaxed pace of life.
This means that housing rentals become in demand not only for the short-term season but also all year round.
How was the rental real estate yield calculated?
They divided the proposed sale price by the rental price requested by owners in different markets, referring to quarterly housing indexes.
Profitability and payback are the main figures to pay attention to when deciding to invest in real estate for rent. But they should not be the only focus. It is necessary to assess all the risks of investment, possible time and financial expenditures. In the case of real estate, it is also important to determine the ultimate goal of the purchase: only temporary earnings or also an asset for the future (for example, a "safety cushion" for old age or future housing for growing children).
This is important to understand which investment method will be most suitable and whether it is worth getting involved in buying and subsequently renting out housing at all.
Specialists from Granfield Estate👑🏠, registered in the Register of Tourism of the Valencian Community as a management company for tourist real estate (registration number EGVT-1348-A), will help you to calculate the yield in advance, choose an object with maximum profitability, calculate all the costs for registration and maintenance, and check all the nuances to maximize the profit from your investments.
Are you planning to buy real estate in Spain on the Costa Blanca coast? Contact us for a consultation. It's free.