The best time to buy a flat to rent is now, according to experts.
Spain is not only made up of large investors who buy larger properties in order to make a profit. In fact, there are more small investors buying flats and trying to rent them out. According to the experts consulted, now is a good time to buy property as an investment, but you have to take into account the area and the return you will get back.
Jesús Duque, vice-president of Alfa Inmobiliaria, replies that it is a good time because the average return on rentals during 2022 was 6.5%, a return on investment far higher than that of bonds or shares, “for which they were around 0.7% and 2.5% respectively, and to this we would have to add inflation as money on its own depreciates”.
It is important to note that such operations carry risks, and the expert says that, like any other investment, this profitability can be affected by factors such as the rise in the Euribor and inflation, “I always like to recommend a thorough analysis of the market situation in the short, medium and long term, and consider various factors before deciding whether buying a flat to rent is profitable”.
For his part, Iñaki Unsain, PSI (Personal Shopper Inmobiliario) of reference in Barcelona, former president of AEPSI and general manager of ACV Gestión Inmobiliaria, comments that yes, “there are areas where profitability is much higher due to demand, but it is a very good time to invest in housing. In cities like Barcelona the demand for rental flats is very high. Rental investment has become a refuge for investors fleeing stock market instability and given the very high demand in Barcelona for rental flats, especially from foreign citizens and students who keep coming to the city to work or study”.
At the moment, according to the expert, the profitability of buying a property is especially high if you renovate the interior. “If you leave the flat completely refurbished and ready to rent, the profitability you get is currently between 5 and 6% in Barcelona with the type of tenant described above”.
Although the average rent yield is around 6.5%, Jesús Duque states that not all properties offer a similar profitability. In each case it will be necessary to evaluate factors such as location, rental demand in the area, purchase and rental prices, the cost of external financing and the overheads of the property in order to make an informed decision.