Spain, and especially the Spanish Costas, are proving increasingly attractive to buy a house intended for rental. The average return in Spain is 6.7%, with peaks reaching almost 8% along the Spanish coast.
In some coastal towns in Spain, the return on renting out homes was far above the national average of 6.7%. The online real estate platform Fotocasa recently passed to the Spanish news site El Economista the most recent report on the profitability of real estate in coastal municipalities in the summer of 2021. In this study, the purchase prices of homes were compared with the rental income made.
Six Spanish municipalities with above-average interest yields
Some Spanish art municipalities stood out above the average. In Gandía (Valencia) the average interest yield was 7.9% in June. Algeciras (Cadiz) saw an interest yield of 7.4% last month. Meanwhile in Roquetas de Mar, Almeria, the average yield was 7.2% Castro-Urdiales (Cantabria) yielded 7% percent and Cartagena (Murcia) and Almería realised 6.7%.
Some municipalities in Spain have been popular for ten years
Municipalities such as Gandía and Algeciras were already popular in 2011. Ten years ago, renting out homes in these municipalities already yielded an above-average interest income compared to other municipalities in Spain.
Where in Spain have yields fallen the most?
Fotocasa also reported on the municipalities in Spain where yields are the lowest. Some have even fallen significantly in the past five years. For example, rental income in San Sebastian is 3.5%, Fuengirola 4.1%, Barcelona and Estepona 4.2% and Palma de Mallorca 4.3%. Sitges yield on average 4.5%, Marbella 4.7%, Benalmadena 4.8% and Benidorm 4.9%.
Real estate market in Spain very popular with large and small investors
A spokesperson for Fotocasa told El Economista: “There are few financial products that deliver as much return as real estate. That is precisely why Spain is one of the favourite markets for investors. Especially since the pandemic, the demand for buying properties for rental has increased, both among large investors and for individuals who are new to this market.”