The Most Profitable Locations in Spain for Renting Property Revealed
According to data from the Idealista portal for the second quarter of 2023, the gross profit from buying a house for rental purposes in Spain averages 7.1%. However, a study conducted by investment company Masteos confirms that in some municipalities, it is possible to earn over 8% annually.
The top 15 locations in Spain based on rental income are:
|Municipios||Province||Rental Price||% Annual||Return on Investment||Budget|
|Parla||Madrid||9.4 euros/m2||5.5%||13.96%||Between €120,000 and €200,000|
|Elda||Alicante||5.2 euros/m2||8.3%||11.14%||Less than €80,000|
|Talavera de la Reina||Toledo||6.0 euros/m2||5.2%||10.49%||Less than €80,000|
|Alcoy||Alicante||6.1 euros/m2||5.2%||9.60%||Less than €80,000|
|Ferrol||A Coruña||5.7 euros/m2||11.9%||9.41%||Less than €80,000|
|Sagunto||Valencia||7.7 euros/m2||14.1%||9.34%||Less than €80,000|
|Ourense||Ourense||6.4 euros/m2||6.8%||8.88%||Between €80,000 and €120,000|
|Reus||Tarragona||8.3 euros/m2||10.9%||10.9%||8.88% Less than €80,000|
|Santa Cruz de Tenerife||S/C de Tenerife||10.2 euros/m2||8.8%||8.86%||Less than €80,000|
|Villarreal||Castellón||5.7 euros/m2||5.5%||8.86%||Less than €80,000|
|Jerez de la Frontera||Cádiz||8.0 euros/m2||8.3%||8.73%||Less than €80,000|
|Linares||Jaén||5.1 euros/m2||5.8%||8.73%||Less than €80,000|
|Santander||Cantabria||9.9 euros/m2||8.0%||8.44%||Between €120,000 and €200,000|
|San Cristóbal de La Laguna||S/C de Tenerife||8.4 euros/m2||7.7%||8.15%||Between €80,000 and €120,000|
|Salamanca||Salamanca||8.6 euros/m2||6.1%||6.1%||8.12% Between €120,000 and €200,000|
|Hospitalet de Llobregat||Barcelona||15.5 euros/m2||16.2%||7.79%||Between €120,000 and €200,000|
|Sanlúcar de Barrameda||Cádiz||7.3 euros/m2||21.6%||7.72%||Between €80,000 and €120,000|
Among the 10 locations with an entry threshold of less than €80,000, Tenerife’s capital stands out with rental prices reaching a maximum of €10.2 per square meter per month at the end of July. Other cities, such as Jerez de la Frontera (€8), Sagunto (€7.7), Talavera de la Reina (€6), and Alcoy (€6.1), also registered record rental prices.
Elda, offering the highest gross yield among the most affordable investments at 11.14%, has the lowest rental price on this list at €5.2 per square meter per month. The same price applies to Linares, followed by Ferrol and Villarreal (both €5.7). Reus completes the top 10 with a rental cost of €7.9.
In total, 15 out of the 35 analyzed municipalities had maximum rental prices by the end of July. Madrid is at the top of the list with €17.1 per square meter per month, requiring housing investments ranging from €120,000 to €200,000. Valencia (€12) and Alicante (€10.2) follow among the capitals. However, the list also includes cities around major metropolises such as Getafe (€11.7), Coslada (€10.6), and Fuenlabrada (€10.5). On the other hand, Parla offers the highest profitability, nearly 14% annually, with investments ranging from €120,000 to €200,000 and an average rental price of €9.4 per square meter per month.
Investing in rental properties in Spain can be a lucrative venture, especially in the mentioned locations. With a diverse range of options, both in terms of entry price and potential return, investors have the opportunity to find the right investment strategy that suits their budget and financial goals. Whether one prefers the affordable yet profitable investments of Elda or the higher rental prices and returns in Madrid, the Spanish rental market offers a variety of possibilities for investors to explore.
It is essential, however, for potential investors to carefully consider factors such as market demand, local regulations, and property management to ensure long-term success. By conducting thorough research and seeking professional advice, investors can make informed decisions and maximize their profits in the Spanish real estate market.