Buy to rent: what you should take into account

Buy to rent is usually one of Spain’s favourite options when it comes to investing. Many of them continue to allocate part of their savings to the real estate sector.

According to data provided by Tinsa, during the third quarter of 2021, the gross rental return registered an increase in average values, standing at 4.1% in Barcelona and 4.4% in Madrid.

What steps must be taken in order to obtain maximum profitability in this type of investment? Read below!

Factors to consider when buying to rent

If you are thinking of investing in the real estate sector, you must make sure that the transaction you want to carry out is 100% profitable and safe.

How? Taking into account certain key factors. Here are some of them:

1/ The price of the property and the rent

The first step is to know both the sale prices and the rental prices that the houses have today in the market.

Using online home appraisers and getting advice from real estate professionals can help you choose the right home.

2/ Purchase expenses

When buying a property, you not only have to take into account the sale price, but also the associated expenses and taxes: notary, agency, IBI, Community, Insurance…

3/ Location and Neighbourhood

The area and location where a home is located will largely determine its demand. Well-connected properties surrounded by services and shops have extra points.

If the neighbourhood has little supply and high demand, the rental price may be higher and, consequently, its profitability.

4/ Type of property

After the COVID-19 crisis, the preferences of many tenants have changed. Houses with terraces, gardens and with a minimum of 2 or 3 bedrooms are on the rage.

Homes with these characteristics are much more likely to be rented in less time.

5/ Initial investment

It is interesting to study the possibility of reforming a house before renting it. Buying an old property at a lower price and then renovating it can be a good option to increase profits.

Investing in the real estate sector is a safe move as long as the operation is well studied and the appropriate decisions are made.

The best investment? Trust true professionals and be advised by experts. Only in this way will you make ensure that you can obtain the maximum possible profitability.

If you want to make the right investment, at KM2 Real Estate Services we will be happy to help you maximize the value of your assets. Contact us!