The Spanish real estate market has gone through different moments in recent years. The ecosystem had a 2021 and 2022 with historical figures, but the beginning of 2023 came with the repercussions of a war and economic uncertainty that have caused history to change in the first months of the year. The global economic situation due to the rise in rates, the rise in prices for both buying and selling, the lack of land for construction, and other factors have made investors focus only on very specific places and that bring a lot of profit. The rental market is one of the most opted for it, and a report ensures that Parla, Elda and Talavera de la Reina are the cities where the rental can give the investor more than 10% profitability.
This is indicated in the document prepared by the company specialized in rental investment, Masteos, called ‘Where to invest in rental housing according to our budget’. THIS File Is Intended To Help Find Investment Opportunities In A Home, A Complicated Task, For Which It Provides Information About The Municipalities And Provos And Incias That Have The Most Profitability Depending On The Investment Made. the three most profitable cities in Spain to invest in a home In particular, the first achieves a 13.96% return, while the second reaches 11.14% and the last 10.40% However, everything arose of the amount of rent money that one has as a budget to carry out this type of movement.
The study divides it into four categories: expenses less than 80,000 euros; between 80,000 and 120,000 euros; between 120,000 and 200,000 euros, and finally in movements that exceed 200,000 euros. In the case of Parla, the investment to be made must be in the third category to reach these performance figures, while Elda and Talavera are both in the pack of disbursements of less than 80,000 euros. Elda stands out for being in the province of Alicante and having an important primary sector to consolidate the footwear industry and for its industrial estates. Talavera is in the ‘top’ for its location, for being a commercial city and for its ceramics market. Parla has the best performance of all due to the development it has had in recent years, which has turned it into an important industrial and service center. Added to this is the construction of the tram (mobility) and its wide variety of services.
“Day by day the profiles of individuals who want to invest in rental housing are multiple, but there are two key elements when defining their investment project: the expected return and the available budget”, they indicate in the Masteos document. Another of the prominent sites in low investments is Alcoy (9.60% profitability) or Ferrol (9.41%). In the category of 80,000 to 120,000 euros, Ourense takes first place in efficiency with 8.88%, followed by San Cristóbal de la Laguna in Tenerife (8.15%). For the third category of investment, in addition to Parla, Santander and Salamanca are also added with 8.44% and 8.12% respectively. Madrid municipality joins these with only 6.01% profitability. For investments that exceed 200,000 euros, the first place goes to Alcalá de Henares with a 7.66% return; Mollet del Vallés (6.67%), and Alcorcón (6.66%).
Rising rental price
All this occurs at the height of the rise in rental prices. Although the sector warns that the ‘price rally’ will come to an end in the coming months, for now the agents call for calm with the increases and the data ensures that the sale and purchase will continue specifically in prime sectors, and in real estate with characteristics sustainable, which are the ones that will deliver the greatest profitability in the future. According to the last semi-annual report on rental prices of the portal % and year-on-year of 6.65%. The big problem with these increases in value is that access to housing is becoming increasingly difficult for those seeking emancipation.
The strong demand has also caused the size of the apartments sought to be smaller and according to the National Institute of Statistics (INE), the ‘mini-flats’ are the most striking in cities such as Madrid or Barcelona. The spokesman and director of studies of Pisos.com, Ferrán Font, has commented in his report that “there are solutions that can increase the park with available so that there is a better balance in terms of demand”, to which he adds that “only by solving the price barrier would we make the rent take more weight compared to the property.” For this, he also proposes giving incentives to the owners instead of penalizing them with measures such as the Housing Law that is “contrary to the profitability of an asset that serves as a refuge for the investment of many small savers.”
For example, analyzing the offer that currently exists in the real estate portals, it is found that in Parla the availability is varied. On the Idealista website, there are 45 apartments for rent ranging from 650 euros to 1,600 euros. In Fotocasa there are 49 alternatives that range between 300 euros and 1,600, and in Pisos.com there are 33 homes for rent that have the same prices as in the first portal. In Talavera there are more options: in the three portals there are between 24 and 90 options to search for, ranging from 150 euros to 1,300 euros for rent. Already in Elda, there are just over 40 apartments to show and the cheapest price to rent is 350 euros and as a ceiling they are rented at 1,100 euros.