Buying a rental property in Spain no longer pays off

Buying a flat to rent: an investment that no longer adds up

The question seems simple: has anyone bought a flat to rent it out? On investment forums, the answer has become a unanimous "not in a million years." The equation has broken down on all three fronts: sky-high purchase prices, rents that fail to take off, and increasingly hostile regulation of landlords.

Those who tried it tell tales of woe. One bought in July 2020, just before decree 11/2020 (a Spanish rent-control regulation), and now regrets it: "I'm swallowing the cost of an energy-efficiency facade upgrade." Another, who bought at a bargain price in 2009, admits that with today's knowledge he would have gone into bitcoin instead. And most prefer government bonds, which yield 3% without tenants, without defaults and without surprises.

The numbers don't add up

The argument is devastating: at current prices, buying to rent is ruinous. On top of that, antiestéticar of squatting and of delinquent tenants — even civil servants — deters many. The lack of legal certainty in Spain pushes some to look to other countries, such as the Netherlands or Germany, where they have previously lived.

The only success story mentioned dates from 2009, when the market was at its lowest. Today, the same amount of money delivers a similar return without the headaches. And that's coming from someone who has lived through it.

The conclusion is clear: traditional renting has ceased to be an attractive investment. If you own a flat, you might want to reconsider selling it rather than renting it out. The alternatives, though less segarro, seem more solid.