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Buying a Flat To Rent in Spain: What To Look For To Make It Profitable

Buying a Flat To Rent in Spain What To Look For To Make It Profitable - Buying a Flat To Rent in Spain: What To Look For To Make It Profitable

The rental price has not stopped increasing in recent months, and forecasts suggest that this upward trend will continue in 2023. In this scenario, many small investors seek to obtain profitability and, to do so, consider buying a flat to rent.

Traditionally, housing is considered a safe-haven asset. However, to obtain profitability through renting, it is convenient to analyze in detail aspects ranging from the type of housing to expenses associated with the rental itself.

How to calculate the profitability of a rental home

We calculate gross profitability considering the property value and the rental income. The formula would be as follows: gross rental return = annual rental income/purchase price of the property x 100.

Thus, a 150,000 euros home rented for 700 euros per month will have a gross return of 5.6%. But it would be necessary to discount the expenses derived from the purchase, maintenance or taxes to obtain the net profit. The gain, in any case, will be higher than other traditional financial products.

What to keep in mind when buying a flat to rent

The calculation of profitability is essential to buying a flat to rent. But first, it is worth assessing some fundamental aspects:

Rental profitability varies between regions, provinces and cities. Even within the same city, the differences between neighbourhoods can be notable. Therefore, we recommend doing a little prospecting of the rental market.

• Once you have chosen the area, it's time to decide the property type. Among the most demanded are homes with a terrace or within developments with sports or garden zones. Larger apartments also tend to be in greater demand, usually obtaining higher profitability.

• In addition, it is fundamental to consider elements such as transport connections, proximity to essential services, commercial areas, etc. All this raises the rental price.

However, you'd have to calculate the costs too. These are mainly expenses associated with the purchase, as well as maintenance, community fees, insurance or repairs that you'll have to face as a landlord.

Within the expenses, a significant item is the reforms. They can involve a high cost, so the advice is to calculate carefully if it is worth doing rehabilitation work or if it is better to choose a home that doesn't need a considerable renovation.

Ignoring these costs is one of the main mistakes that can occur when buying a flat to rent. Others: buying on impulse without assessing the characteristics of the home, investing thinking only about the revaluation of the property or doing it without good financial backing.

With, buying a home to rent is easy

If you intend to invest and buy a flat to rent in Spain, offers you a broad real estate offer with homes of all kinds. Further, you'll find interesting information to learn more about before deciding.

In this way, you will find a specific section with data related to the situation of the rental market: price evolution and prices by regions, provinces and cities. Do not miss opportunities in this rising market; start planning your ideal investment now.

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