Buying property abroad: the European city with the highest rental income and everything you need to know

Is it a good or bad time to invest in real estate? In the risk/return formula, the most powerful attractive factor is the first element of the equation - bricks and mortar - especially during periods of high volatility, although the data suggests that real estate is not in its best shape when analyzing current profitability.

The context explains it all. Rodrigo Gamarsi, partner-director at management firm FDI, explains that as interest rates rise in the United States, all asset prices are falling due to the rising cost of money. "This makes it harder to find opportunities in real estate abroad," he believes. "When interest rates are high, borrowing costs go up, which in turn requires higher rents'''payments to pay payments,' elaborates the analyst, who believes that the first rule of business is to buy right, although it is difficult to do so in the current situation because no one knows what will happen in the future. "It is difficult to set a timeframe; I believe interest rates will remain high for at least two years," he estimates when asked about the timing.

What are the specific possibilities? "

Nonetheless, Gamarsi makes some observations. "In Spain, for example, there is a significant amount of real estate owned by banks, which of course need to get rid of them," he comments. In general, the market's opinion coincides, and quite a few analysts expect a new wave of enforcement proceedings, despite the tightening of legal''s measures to implement them, and it has to do with borrowers now asking banks to refinance.

The current stock of bricks owned by banks, however, 'opens up very specific opportunities'. Which are? "For example, space for retailers," respond the interviewed professionals, always emphasizing that these are complex cases that are difficult to define.

In Spain, there are opportunities for real estate investments with premises or houses owned by banks after evictions.

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Gamarsi is not the only one to mention Spain linking opportunities with properties left in the possession of banks after so-called 'evictions' on mortgage obligations. On sale there are as''apartments as well as houses; some require renovation. But the most important thing is that many of them cost around 100,000 euros. And can even be found for less.

This is a situation that affects the whole of Spain, especially the Costa del Sol, as LA NACION newspaper reported last October. There, the income from renting an apartment can, if not double that of Madrid, where it is around 4% or 4.5%, surpass it by more than two points.

From Alicante, overlooking the Mediterranean Sea, Gabriela Schneir, director of Gesmar 2000, specializing in overseas investments, shares the reasons why this option is becoming more attractive today.

Costa del Sol rental yields are several times higher than Madrid.

"Alicante is international. 'port; here is Europe's fifth airport and from Madrid it is two hours and a quarter by high speed train, making it a beach for Madrid residents,' the broker cites, before giving dry statistics: in terms of real estate sales, it is the third preferred city for Spaniards and the first for foreigners.

"We have 15 degrees in winter here and 300 days of sunshine a year," continues Schneir, mentioning that the climatic factor attracts both Europeans from the north, with prolonged, dark and intense winters, and Europeans from Britain. "The opportunity is related to the purchase of used real estate properties," she notes when asked what the opportunity is, emphasizing that unlike the rest of the''Spain, bank-owned housing in Alicante, where there are properties from 85,000 euros, is absolutely negligible.

Other opinions, other destinations outside Spain

Ramiro Julia, CEO of Americas Capital Investments, has turned his attention to the British Isles, believing it is a destination always worth watching. "The profile of Latin American investors is usually linked to the U.S. market, but the U.K. is a place to always pay attention to," he argues.

As he explains, there are opportunities not only in London, but also in Manchester and Birmingham, where the company has investment properties. What, specifically. Offices that comply with the environmental regulations that apply in the region. "There are serious''incentives for buildings that meet sustainability criteria,' the source emphasizes, noting that the market is currently outdated.

There are opportunities to invest in offices in London, Manchester and Birmingham.

Some figures complete the picture and explain why the country of the recently enthroned Charles III could be an investment destination: it is home to more than 70 million people; it is one of the economic capitals of the world - "things are very dynamic after Brexit" - and, in addition, there has been a significant 25% fall in capital market share prices since June 2022. London, in particular, is consistently in the top 5 of any investment survey and is said to be preferred by the rich and sophisticated.

But if we just want to bet on rent,''There are other options on the map of the Old World, defined by the coldness of the numbers: according to the French platform Masteos, the already mentioned Madrid is the fifth most important city on the list with a yield of 4.8%. In fourth place isRome with a yield of 5.1%, followed by Marseille with a yield of 5.3% in third place, and Valencia, with a yield of 5.9% in second place.

Warsaw is the city in Europe that yields the highest rental yield, at around 6%.

What is the most lucrative city in Europe to think about buying a rental apartment? We are talking about the capital of the country, which a few years ago stopped being a developing country and became industrialized, and has about the 20th position in the world economy. Warsaw is exactly what we are talking about, as it occupies''top of the rankings as it has a buy-to-let yield of over 6%, although you may need to learn Polish to get the deal done.