The regions of Spain where to invest to boost rental profitability

Making a real estate investment can quickly become a real headache. Faced with the multitude of terms used, it is not always easy to find your way around. Between the gross rental profitability, the net rental profitability and the charges to be taken into account, your calculation may be distorted from the start. In addition, to obtain the best possible investment, it is necessary to focus from the outset towards regions in Spain with strong attractiveness.

The three best regions in Spain to invest

First, your investment requires defining a very precise geographic area. The evolution of sales in new real estate is to be taken into consideration because it is a reliable indicator of growth. Based on this first observation, three regions stand out in Spain, showing growth of more than 4% in the price of real estate. These are the region of Madrid, Catalonia and Palma de Mallorca.

More generally, all the Spanish regions have recorded an increase in the price of new real estate. It is therefore an ideal period to invest in the country, as the prices have been constantly evolving for several years. This will allow you to realize a capital gain in the event of resale and have rental profitability that will indeed be present.

If you are considering a real estate investment to rent out your property, different specificities must be taken into account. The first essential criterion is quite simply the price of rents. This will allow you to generate a higher gross profitability and it is on this index that you must make your choice. The region of Granada clearly tops the ranking with a gross rate of return of around 13.8%. Then, the Toledo region is not left out with a gross profitability of 8.4%. To complete the podium, the region of Seville has significant attractiveness and gross profitability of 6.5%.

Cities to consider for a real estate investment

When we look at the gross rental profitability of a city, we see that certain agglomerations are doing well. This is for example the city of Madrid which has the particularity of having significant disparities between districts. Indeed, if you decide to invest in the Villaverde or Usera district, know that you will be able to record a gross profitability of around 7.5%. This same rate can climb to 8% in the Puente de Vallacas district. Unsurprisingly, these are the three most popular neighborhoods in the Spanish capital. It will take an average investment of around € 2,000 per square meter to be able to access such housing. However, the risk of non-payment remains higher, which will directly harm your investment.

Central districts such as Salamanca, Retiro or Chamartin show attractive profitability of around 4%. The rents are here much more stable in terms of price with a lower risk of default. However, for the acquisition of housing, it will be necessary to consider a price per square meter of around 5,000 €.

The city of Barcelona also has an important attractive power in real estate investments. With a gross profitability between 4 and 5%, certain districts are more to be favored such as the Sant Marti district located to the east of the capital of Catalonia. The initial investment is around € 4,000 per square meter and has a profitability of 6.5%. If you are looking to invest in Barcelona with a lower acquisition price, you can turn to the Nou Barris district with a profitability of 5.3% for an acquisition price that will be less than € 2,500 per square meter.

If you are looking for good profitability outside Barcelona and the city of Madrid, you can look at the region of Andalusia and in particular the city of Cadiz which will give you a rental profitability of 6.9%.

In the Canary Islands, the city of Santa Cruz de Tenerife and Las Palmas shows a profitability of around 7%.

The agglomeration of San Sebastian and Bilbao in the Basque Country will also guarantee you a very good investment with a rate approaching 5%.

Some tips to improve your profitability

Before committing to an investment, it is necessary to consider the price of real estate in relation to certain regions. The rents charged are also to be taken into consideration and represent basic elements for the calculation of your profitability. To refine your selection, do not hesitate to consult the many advertisements available that you can find with Spanish real estate agencies or directly from their website.

To make a rational decision, it will also be necessary to be based on reliable data allowing to follow the evolution of the market. The rental yield and the price per square meter in recent years should be factored into the calculation.

If you have the opportunity, do not hesitate to get in touch with Spanish real estate professionals who will help you benefit from their know-how and knowledge, in particular by turning to property hunters.