The top Spanish cities to buy a property for renting out

The gross profitability of buying a property to put it on the rental market has fallen to 6.9% at the end of 2021, compared to 7.5% in 2020. But in some cities the return exceeds 8%
The gross profitability of buying a home to put it on the rental market has fallen to 6.9% at the end of 2021, compared to 7.5% a year earlier. But there are cities in which yields exceed 8%.

This is the result of a study carried out by idealista portal, which highlights that the profitability obtained in the real estate sector is 15 times higher, in the worst case, than the rates offered by 10-year government bonds (0.3%).
Рousing profitability in Spain in 2021
Рousing profitability in Spain in 2021
According to this analysis, which considers the sale and rental prices of different real estate products and calculates their gross profitability, there are other more attractive investments within the real estate sector. Thus, offices remain the most profitable property investment. Buying an office in Spain to rent it out offers a gross yield of 11.2%, compared to 10.8% 12 months ago. Premises offer a yield of 9.4% (9.3% a year ago) and in the case of parkings it stands at 6%, down from 6.9% in December 2020.

Where is it more profitable to invest in housing in Spain?

Among the Spanish capitals, Lleida is the most profitable, with 8.8%. It is followed by Murcia (8.1%), Huelva (7.9%), Santa Cruz de Tenerife (7.5%) and Almería (6.9%).

However, the lowest yields in Spain were recorded in San Sebastian (3.7%), Palma (4.5%), A Coruña (4.6%), Ourense, Madrid and Barcelona (4.7% in all three cases).

Offices and parkings with the best returns

Offices in Seville give the best return among the capitals, with a gross yield of 13.8%. They are followed by Toledo (9.3%), Huelva (9.1%), Vitoria (8.8%), León and Almería (8.5% in both cases). In Madrid the profitability drops to 6.9% and in Barcelona to 6.5%.

At the other end of the spectrum are the returns in Granada and Bilbao (6.1% in both cases), Valencia (6.2%), Ourense and Córdoba (6.4% in both cities). The office market is not as uniform as for other products, so it is impossible to obtain statistical data for almost half of the Spanish capitals.

On the other hand, parkings is, in contrast, the least profitable product for investors in many capitals. The highest return is obtained in Ávila (9.2%), followed by Castellón (8.3%) and Guadalajara (8.1%). In Barcelona the rate of return is 6.3%, while in Madrid it drops to 4.8%.

The capital with the least profitable parkings is Salamanca, with 2.8%, followed by Granada and Ourense (3% in both capitals), Lugo (3.2%), Santander and Palencia (3.4% in both cases).

Returns on real estate investments in Spain in 2021

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