In its latest report on rental profitability in Spain from January 2024, one of the largest Spanish property platforms reveals key figures.
For a standard 90 m² property, sold at a price of €196,290 with an average monthly rent of €1,009, a landlord earned an annual gross income of €12,117, yielding a gross rental return of 6.17%. This return in January 2024 represents a decrease of thirteen hundredths compared to the same period in 2023 (6.30%) but remains stable compared to December 2023 (6.17%).
The gross rental return in Spain in January 2024 was 6.17%. This figure reflects the gross annual income earned by a landlord renting out their property after purchase.
With an average purchase price of €196,290 for a standard 90 m² residence (€2,181/m²) and an average monthly rent of €1,009, the landlord obtained a gross annual income of €12,117, corresponding to a gross return of 6.17%. This marks a slight decline from the previous year (6.30%) and remains unchanged from December 2023 (6.17%).
Rental returns are expected to stabilise around 6%, reflecting the overall slowdown in the sector.
We will need to wait further into the year to see if the trend changes and a rebound occurs.
The ranking of average rental profitability in Spain's provincial capitals shows variability ranging from 7.80% to 3.37%.
The most competitive yields were observed in:
• Lleida (7,80 %),
• Murcia (7,67 %)
• Ávila (7,63 %)
• Zamora (7,29 %)
• Ciudad Real (7,13 %)
• Jaén (7,03 %)
• Almería (6,96 %)
• Valencia (6,81 %)
• Huesca (6,79 %)
• Las Palmas de Gran Canaria (6,65 %)
The least competitive yields observed in :
• Donostia – San Sébastian (3,37 %)
• Pamplona (4,43 %)
• Bilbao (4,67 %)
• Madrid (4,70 %)
• Palma de Mallorca (4,84 %)
• Cádiz (4,85 %)
• A Coruña (4,89 %)
• Girona (4,97 %)
• Granada (5,14 %)
• León (5,23 %)
"The current context shows a notable decline in profitability in the two major provincial capitals, with Barcelona dropping from 18th to 20th place, posting a yield of 6.31%, and Madrid falling from 45th to 47th place, with a yield of 4.70%."
According to idealista, in the second quarter of the year, the yield across Spain stood at 7.5%, marking an increase of 0.4% compared to spring 2023. Lleida is the most profitable capital, with a yield of 8.1%, followed by the cities of Murcia (8%) and Huelva (7.6%). Castellón de la Plana (7.4%), Jaén (7.4%), Segovia (7.3%), Almería (7.2%), Santa Cruz de Tenerife and Cuenca (both 7.1%) all have yields exceeding 7%. In contrast, San Sebastián has the lowest profitability (3.9%), followed by Cádiz (4.7%), Pamplona (4.8%), A Coruña (4.8%), and Palma (4.9%). In Madrid, the yield reaches 5.3%, while in Barcelona, it is 6%.
What are the key factors for investing in rental property in Spain?"
Investing in rental property in Spain is an attractive option for many investors, not least because of the pleasant climate, quality of life and dynamic property market. However, making a successful rental investment in Spain requires in-depth analysis and consideration of several key factors. le rendement s’est établi à 7,5% dans l’ensemble de l’Espagne, avec une augmentation de 4/10 par rapport au printemps 2023. Lleida est la capitale la plus rentable, avec un rendement de 8,1%, suivie des villes de Murcie (8%) et de Huelva (7,6%). Castellón de la Plana (7,4%), Jaén (7,4%), Segovia (7,3%), Almería (7,2%), Santa Cruz de Tenerife et Cuenca (7,1% dans les 2 cas) ont des rendements supérieurs à 7%. En revanche, Saint-Sébastien est la ville où la rentabilité est la plus faible (3,9%), suivie de Cadix (4,7%), Pampelune (4,8%), La Corogne (4,8%) et Palma (4,9%). À Madrid, la rentabilité atteint 5,3% et à Barcelone, elle est de 6%.
Quelles sont les facteurs Clés pour un Investissement Locatif en Espagne ?
Investir dans l’immobilier locatif en Espagne est une option attrayante pour de nombreux investisseurs, notamment en raison du climat agréable, de la qualité de vie et du marché immobilier dynamique. Cependant, réussir un investissement locatif en Espagne nécessite une analyse approfondie et la prise en compte de plusieurs facteurs clés.
- 1. Choice of location is undoubtedly the most important factor in property investment. In Spain, certain cities and regions are particularly popular, such as Madrid, Barcelona, Valencia and the Costa del Sol. These areas attract large numbers of tourists and residents alike, guaranteeing strong rental demand. It is crucial to choose a location where the rental market is buoyant, with good profitability and the potential to increase the value of the property in the long term, and to avoid areas where there is known rental tension.
- 2. Understanding local regulations Rental regulations can vary from region to region in Spain. Some cities, such as Barcelona, have introduced strict restrictions on tourist rentals, while others encourage this type of rental. It is essential to understand the local laws on leases, tax on rental income and tenants' rights to avoid any unpleasant surprises.
- 3. Assessing the return on investment Before buying a property, it is essential to assess its potential profitability. This involves calculating the gross rental yield (the annual rental income in relation to the purchase price), as well as the costs associated with maintaining the property, taxes and management fees. The aim is to ensure that the property will generate positive cash flow and long-term appreciation.
- 4. Financing and banking terms Obtaining favourable financing is another crucial aspect. Spanish banks offer mortgages to foreign residents, but conditions can vary. Comparing offers from different banks, considering interest rates, application fees and repayment terms, is essential to minimise the cost of the loan. The deposit you have will also be a key factor in obtaining a Spanish loan.
- 5. Rental management Rental management can be time-consuming, especially for foreign investors. It may be a good idea to use a rental management agency to look after finding tenants, maintaining the property and managing payments. Good management helps to reduce the vacancy rate and ensure maximum occupancy of the property.
Il peut être judicieux de faire appel à une agence de gestion locative pour s’occuper de la recherche de locataires, de la maintenance du bien, et de la gestion des paiements. Une bonne gestion permet de réduire le taux de vacance locative et d’assurer une occupation maximale du bien. - 6. Prospects for increasing the value of the property It is important to consider the long-term prospects for increasing the value of the property. Investing in an area undergoing development or urban renewal can offer significant added value over the long term. Monitoring infrastructure projects, local development policies and property market trends can help you anticipate areas with high potential.
Conclusion
Investing in rental property in Spain can be an excellent opportunity, but it requires careful preparation and a good understanding of the specifics of the local market. By considering location, regulations, return on investment, financing, rental management and the prospect of increasing value, you will maximise your chances of success and optimise your profitability.
If you want to find attractive rental properties in areas where the market is less tight, it's essential to adopt a strategic approach:
1. Targeted search: Use online property platforms to explore the options available in suburbs and towns close to major metropolitan areas. These platforms allow you to filter the results according to your price and yield criteria.
2. Rental Market Analysis: Before you buy, analyse rental market trends in your target area. Look at average rent levels, occupancy rates and growth prospects to assess potential profitability.
3. Consult local experts: Working with local estate agents or with specialist on Spanish real estate market can make your search much easier . They have in-depth knowledge of the market and can guide you towards properties offering good returns.
4. Visits and valuations: Don't just rely on online photos. Visit properties and neighbourhoods to assess their condition, attractiveness and rental potential. This step is crucial to avoid unpleasant surprises.
Investing in rental property in Spain does not require you to spend huge sums of money. By targeting the right areas and using intelligent financing strategies, you can start investing on a moderate budget and achieve attractive returns.
Investir dans l’immobilier locatif en Espagne ne nécessite pas de débourser des sommes colossales. En ciblant les bonnes zones et en utilisant des stratégies de financement intelligentes, vous pouvez commencer à investir avec un budget modéré et obtenir des rendements intéressants.
The important thing is not to be discouraged by the preconception that property investment must be expensive. There are plenty of opportunities, even outside the major urban centres, and with the right approach, you can succeed in creating a profitable and sustainable rental portfolio.
Don't let preconceived ideas hold you back. Be strategic and patient, and you'll find properties that not only fit your budget, but also offer the potential for significant returns.
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