Palma, a paradise for local landlords

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PALMA: The profitability of renting a property in the city has risen this year.

PALMA is the second-most profitable city in Spain to rent residential properties.

According to idealista.com, the profitability offered by investing in rental properties has increased from 5.3 per cent in the first quarter of 2015, to 5.7 per cent this year, with the city of Palma positioned as the second-most profitable Spanish capital, in regards to residential properties.

The study, which compared sale and rental prices of various types of real estate to calculate gross profit, shows that the most profitable real estate investment is commercial property. Buying commercial space in Spain to rent offers a gross yield of 7.7 per cent, compared to 7.2 per cent a year ago.

Office space offers a yield of 6.9 per cent compared to 6.7 per cent last year. Garage rentals have also improved, from 4.5 per cent in 2015 to 5.6 per cent this year.

As for residential properties, the city of Lleida is ranked as the most-profitable in Spain at 8 per cent, with Palma following in second place at 6.5 per cent. Las Palmas takes third position with 6.2 per cent. Madrid is slightly ahead of Barcelona with a 5.5 per cent profitability in residential properties, compared to Barcelona’s profitability of 5.2 per cent.

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