Which is the most profitable real estate product? Could it be a house, an office, commercial premises or a garage? At present, the favourite option of Spanish investors is to purchase real estate so as to make their capital profitable and exploit it to the full. In Spain, we still believe that investing in real estate is a safe way to make the most of our savings. When a Spanish person has a certain wealth, it is very common to invest in property. But which is the most profitable choice? Very often, when we talk about real estate we usually think about housing. However, we should also take into consideration offices, commercial premises or garages. The profitability we can gain depends on the choice of the property. Today, we will see which option offers the highest profitability and we will also see what the market is like nowadays. Recently, the real estate portal Idealista carried out a research comparing the return on investment of these real estate products. What is the outcome of this research? Which is the most profitable real estate product in which to invest in our country? We analyze all this in detail.

OFFICES AND COMMERCIAL PREMISES, AT THE HEAD

According to the research carried out by Idealista, the most interesting product for an investor in Spain, regarding profitability for rent, are offices as they offer a gross return benefit of 11%. Next come commercial premises with a gross return of 9,4%, then housing (7,1%) and lastly garages with 6,3%. Offices are, as we have already said, the most profitable real estate product in Spain, even though this profitability is not too high in the large Spanish provincial capital cities, with the exception of Seville. Seville, the provincial capital city of Andalusia, is the most profitable city in Spain regarding the rental of offices, as the gross return is of 11,3%. Next comes Toledo with 9,4%, Vitoria (9,2 %), Almeria (9,1%) and Leon (8,2%). Bilbao draws our attention because it is the least profitable provincial capital city in which to invest in offices (the gross return being 6,1%). The research done by the portal Idealista, gives Madrid a rental profitability of 6,9% and Barcelona of 6,5%. After offices, the next most profitable real estate product in which to invest are commercial premises: the provincial capital cities which offer the highest profitability are Avila and Lugo, both of them with 10,9%. After comes Huelva with 10,7% and then Huesca, Murcia and Zaragoza the three of them with 10,1%. As regards our two largest cities, Barcelona offers a profitability of 8,5% in commercial premises and Madrid of 8,2%. A lower profitability of 6,8% is offered in La Coruña and Albacete.

HOUSING AND GARAGES

Spanish people continue to believe that housing is the most suitable choice in which to invest capital, even though, regarding profitability, it comes third place in the list of the four real estate products we are analyzing. Two weeks ago, we wrote an article in this blog where we made an X-ray of second hand housing prices in Spain. In that article, we said that Lleida was the cheapest provincial capital in which to purchase second hand housing, with a price of 1.199€/m2. In this city, rental profitability is the highest, with 8,5%. Next comes Huelva (8,2%), Murcia (8%) and Santa Cruz de Tenerife (7,6%). The least profitable city regarding rental is San Sebastian with only 3,7%. Next comes Palma de Mallorca with 4,3%, then Madrid with 4,7% and Barcelona with 4,9%. The last place on the list are garages and with regard to this product the provincial capital city which offers the highest profitability is Castellon de la Plana with 8,3%. Next comes Murcia (7,5%) and Avila (7,3%). In Barcelona the profitability reaches 6,3%, whereas in Madrid it is only 4,8%. Salamanca has the lowest profitability reaching only 2,5% and it is followed by Orense with 3%.

Picture 01: freepik