Brick maintains its profitability almost intact despite the increase in purchase prices. Acquiring a home and renting it out in a provincial capital leaves a return of 7.1% on average with the data from the last quarter of 2023. It is the same figure as in the entire last year and just one tenth less than at the end 2022, according to a study by the Idealista portal published this Monday. When compared with other options, the return of residential does not win over offices, premises or garages.
Studying the provincial capitals, Lleida, with 8.5%, has the highest profitability when it comes to purchasing a home to rent out. The Catalan city displaces Murcia after improving its 8% in the third quarter. Murcia comes right behind with 7.9%. Two Andalusian cities follow: Huelva (7.3%) and Jaén (7.2%). Already in the average or just below are Segovia (7.1%), Castellón (7%) and València (7%).
After these first positions, the market is divided into several blocks, with the first one leaving returns of 6-7%, among which are Alicante (6.8%), Zamora (6.6%), Lugo or Zaragoza (6 .3%), to give a few examples. With returns of 5-6% are Burgos (5.9%), Soria (5.6%) or Pontevedra (5.1%).
When talking about profitability, two major variables must be taken into account, the purchase price of the home and the rental price. For example, if one has been purchased for 120,000 euros and is rented for 1,000 euros per month, 12,000 euros will be earned during the year. This figure represents a gross profitability of 10%, since it is equivalent to the percentage of the investment in the purchase that has been recovered with the rental.
The purchase price in large capitals is higher, so profitability may suffer and be lower. Of course, they have a guaranteed demand. It occurs for example in Seville (6%), Barcelona (5.9%), Madrid (5.2%), Bilbao (5%), Palma (4.8%) or San Sebastián (3.8%), the What worse return does it offer?
Only a handful of cities remain below 5% profitability. In addition to San Sebastián and Palma, there are Cádiz and Pamplona with 4.7% and A Coruña (4.8%).
It must be taken into account that the returns mentioned are always gross. They do not take into account the expenses that the owner faces for the rental: taxes (IBI, fees, personal income tax), commissions, community expenses, insurance, repairs… They have been calculated with the sale prices offered and the rental price. demanded in the different markets, is detailed.
The study reviews other investment alternatives in real estate. “The offices remain the most profitable,” says Idealista. Buying an office and renting it offers up to 11.8%. It is less than a year ago (12.9%) or the previous quarter (9.8%), but it is still by far the best-performing asset. It surpasses premises (9.9%, the only ones that improve profitability compared to the most recent periods), garages (7.2%) and housing (7.1%).
In offices, among the capitals with data, Seville and Zaragoza are the most profitable, with 11.7% profitability, compared to 10.4% for Almería or 9.1% for Burgos. In Barcelona it is 7.9% and in Madrid it is 7.3%. For the locals, Ávila (12.3%), Murcia (11.7%) and the trio of Girona, Lleida and Zaragoza (10.5%) lead. In Barcelona it is 8.4% and in Madrid it is 8.2%.
For garages, profitability reached 7.2% in the fourth quarter of 2023. It is one tenth more than the previous year, but five tenths less than in the third quarter. In this asset, the highest profitability occurs in Murcia (10.8%), Ávila (8.3%), Castellón (7.5%), Guadalajara (7.5%) or Lleida (7.3%). Already below the state average are Barcelona (6.3%), Toledo (6.3%), Pamplona, ??Tarragona and Zaragoza, all with 6%. In other large cities, in Madrid it reaches 5.1%, in Seville 4.7% and in Bilbao it is reduced to 4.3%.
