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Buying a rental property in Europe?

Are you planning on investing in a rental property in Europe? There are several European cities currently breaking tourism records including Andalucia in Spain. A significant number of buyers purchase properties overseas with the sole intention of renting them out in order to make some impressive income. Many are opting for this rather than using them as a personal holiday home. If you’re a savvy investor and wondering about the best places in Europe to buy a rental property, then keep reading!

The best places in Europe to buy a rental property in 2018

Some investors are likely to buy in a location that they know well and perhaps plan to stop letting the property at a later date, but for buyers who are simply looking for the best places for maximum profit, the latest data from the United Nations World Tourism Organization (UNTWO) may give you some hints about those destinations that give the highest returns.

Finding the best holiday rental markets

According to UNTWO some 1.235 billion trips were made in 2016, an increase of 3.9% over 2015. More than half of those trips were to Europe, which shows just how popular it is with global travellers. As Global Property Guide points out, this is a signal for property investors to take action. Not only is real estate a solid investment, the proliferation of online services makes it easier than ever to promote an investment property and a study of the short-term rental market by Tranio reveals the 20 most popular European cities, where investors can secure the best profits.

Using AirDNA data, a service that takes statistics from Airbnb, we can see the cities with the highest demand for short-term accommodation:

  1. Madrid
  2. Porto
  3. Athens
  4. Dublin
  5. Lisbon
  6. Zurich
  7. London

Property prices in European cities

It is evident from this list that these are all major cities where property is typically more expensive. However, there is one that stands out here as offering the best value for money and that is Athens. For example, according to Numbeo, property in Athens is €1,380 per square metre, whereas in Madrid it is €4,000. Lisbon is €3,180 and Porto is €1,930, coming second after Athens. London is as expected one of the most expensive at €16,200/m2; even Zurich is considerably lower at €12,080. So, Athens has the best deal and it is also the leader in terms of supply growth speed, with an increase of 112% during 2016, according to Global Property Guide.

Unsurprisingly then, short-term rental prices are the lowest in Athens at an average of €62 per night. Budapest and Prague are also inexpensive, whilst the most expensive are Barcelona, Amsterdam, London and Dublin.

Choosing where to buy a rental property

So how do you choose? Well, if you look at the difference between the prices per square metre and rental rates, the experts suggest that the best places to buy an overseas investment property are Porto, Athens and Barcelona; the latter may be expensive to purchase in but you’ll also get the highest returns on investment. Do remember though that you will need a tourist rental licence for any Spanish property and the Spanish authorities have started fining owners who promote rentals online without this licence, which is not that difficult to obtain.

However, Porto and Athens present fewer bureaucratic issues. In Portugal you only need to register the property as a rental and you will be given a special registration number that is necessary for advertising the rental online. In Greece, owners can let up to two properties for up to 90 days a year without any registration needed.

Search for properties in Greece and Portugal

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