Invest in long-term rental apartments in Spain

12 December 2022

Buying a property to rent is an attractive alternative for many investors. Especially the long-term rental offers many benefits, and reduces the risks of other types of rentals.

If you have capital and are thinking of making this type of investment, perhaps this is the right moment: the news about the rise in rental prices in Spain is constant, and this type of property has achieved an average return of 6.43%. in the first half of 2022.

But is it really worth buying to rent? What aspects influence the profitability of this type of operation? When is the best time to do it?

When to buy flats to rent? Calculate the return on your investment

To find out the profitability of a long-term rental apartment, you must divide the fee you get for a year of rent by the value of the property you bought.

Whether investing in flats to rent is more profitable or less also depends on other aspects, including your financial situation, the state of the real estate market and the rental price, taking into account:

● That the increase in the purchase and sale price of properties between 2021-2022 has caused many families to buy properties owned or, directly, to opt for long-term rentals.

● That the current interest rates, although high, will still allow you to find mortgages and competitive financing to make your investment.

● That it is an investment with which you will obtain liquidity. Because, unlike others, with the long-term rental you will receive extra income, without waiting to cover expiration dates.

Regarding the elements that will determine the rental price and that will also influence the profitability of your investment in the long term, we highlight:

Where the apartment is located (city). These types of investments are usually more profitable in large cities such as Madrid, Barcelona or Valencia, or in highly touristic areas.

Where the apartment (area) is located. The rent is higher in upper-class areas, or in neighborhoods well connected to schools, supermarkets, green areas, services, etc.

Characteristics of the property. With this we refer to its age, state of conservation, size, outdoor areas (terraces, garage, etc.), facilities, etc.

In addition, depending on the above elements, the rent will go to people with a greater or lesser economic capacity.

 What factors to take into account: 5 tips prior to buying

1. Set your goals. It is about being clear about how much you want to invest, for how long you want to rent your property and what tenant profile you are looking for.

2. Evaluate the price of the property. Ask if the price they offer you adjusts to the current situation. And remember that you must not only cover the mortgage installments, but also face maintenance and unforeseen expenses.

3. Analyze the possibilities of revaluation of the area. Even if you opt for long-term rental, you should look for booming areas, with demand for housing and where you can recover your investment over time.

4. Study the type of properties that is in greatest demand. This is very important before investing in rental apartments, as it is the best way to ensure long-term tenants.

5. Check the community expenses. Think that the recovery of your investment may be conditioned by maintenance expenses. This is usually more common in large communities or in luxury developments that offer services with swimming pools, sports courts, gardens, etc.

Advantages of investing in apartments for long-term rental in Spain

Like any investment, buying flats to rent has its pros and cons.
● The profitability of investing in rental housing is high (almost 7%).
● You will have tax advantages and deductions in repairs, mortgage expenses, amortizations, insurance, IBI, etc.
● You will generate a regular extra income and for a long period of time.
● Long-term tenants tend to take proper care of the properties, and make the necessary improvements to guarantee their long-term comfort.
● There are better payment guarantees.
In addition to extending for a longer time and including more guarantees, long-term rental offers security and stability to tenants and owners.
Having professional advice is essential if you want to invest in long-term rental apartments.
We are a real estate agency in Valencia with experience in the sector and we provide comprehensive luxury property management services in Valencia. You can check our luxury homes in valencia to invest We will be happy to answer all your questions, call us.

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