Investing in rental housing: a safe bet

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We are back with another article of Fincas la Clau Blog. In this case, we will talk about real estate investments and which of them are more profitable these days. Do you want to know why it is time to invest in rental housing or what is the least profitable investment? Do not miss this article!

Why invest in rental housing?

The profitability offered by investing in rental housing has increased to 7.1% from 5.8% a year ago, as a result of the increase in rent demand, according to a study developed by the specialized portal Idealista.

According to the analysis, which compares the sales and rental prices of different real estate products to calculate their gross profitability, the commercial premises continues to be the most beneficial investment. In Spain, acquiring leasehold now offers a gross profitability of 8.3%, compared to 7.7% in the previous year.

The only product that has reduced profitability during this year is garages, falling from 5.6% in the first quarter of 2016 to 5.2% currently.

Types of investment

  • Commercial premises

Premisses are the most profitable product in most capitals. The highest return is obtained in Malaga 11.5%, in Vitoria 9.4%, A Coruña 9.4%, Las Palmas de Gran Canaria 9% and Zaragoza 8.8%. In Barcelona the rate is located at 8.4%, while in Madrid it remains at 7.6%.
Palencia offers the less attractive premises for the investor, only 5.1% of profitability, followed by Castellón with 5.2% and Jaén 6.2%.

  •  Housing

Lleida is from the Spanish capitals the most profitable with 7.6%. It is followed by the Palmas de Gran Canaria, Huelva, Alicante and Palma. The profitability in Barcelona is 5.3%, lower than Madrid with 6.1%.

  • Offices

The offices of Guadalajara present the juiciest return of the capitals with 8.2% of gross profitability. Followed by Zaragoza with 7.2%,, Cordoba with 7.1% and Malaga 7.1%. In Barcelona the profitability rises to 6.4%, while in Madrid it drops to 6.2%.

On the opposite side we find the profitability of A Coruña 4.8%, Valencia 4.9%, and Santander and Murcia with 5.3% in both cases. The office market is not as uniform as other products, so it is impossible to obtain statistical data for more than half of Spanish capital.

  •  Garages

Garages are, on the other hand, the least profitable product for the investor in many capitals. The highest profitability is obtained in Palma 7.1%, followed by Las Palmas de Gran Canaria 6.7%, Murcia 6.4%, and Huelva 6.1%. The municipalities with the least profitable garages are Barcelona and Salamanca with 2.4% in both cases, A Coruña with 2.8%, Ciudad Real and Madrid 2.9% in the two cities.

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