“Non-tourism residential rentals on the beach are also very profitable” is the principal conclusion of a new study by urban Data Analytics (uDA), explains an article in the Spanish daily El Mundo reporting the study.
Gross rental yields first and second line from the beach are 5.67%, up from 5.37% in 2016, and considerably higher than the 4.3% national average (according to Bank of Spain figures).
By region, the best yields on the beach are in the Balearics (7.32%) followed by Barcelona (7.21%).
“It’s a good moment in general for the rental market, and the good times have reached the Spanish coast, the first and second line,” says Carlos Olmos, Director of uDA, who points out the average long-term rental yield on the coast of 5.67% is close to the yields of Madrid (6.29%) and Barcelona (5.74%).
Once again Ibiza leads the field when it comes to long-term rental yields on the beach, with 8.95%, followed by Puerto de la Cruz in Tenerife (7.13%), and Vilaseca (7.05%) in Tarragona (Costa Dorada).
“Just like the big cities, you can’t make generalisations about rental yields on the coast,” says Olmos. “Results are very unequal. It’s important to do a more micro-segmented analysis, by zone and type of property, in order to find the best yields for average risk.”
One reason why long-term rentals frontline on the beach are rising in price and delivering higher yields on a par with Barcelona and Madrid is because record demand for holiday rentals from tourists is reducing the supply of long-term rental accommodation, pushing up the price. “Rising demand for holiday apartments is encouraging many landlords to switch to this market,” a spokesperson from the real estate servicer Solvia is quoted as saying.
uDA say rents on the coast have increased 8.95% in the last year, to an average of €1,005/month, ranging from 354 €/month in Lugo, to 2,290 €/month in Ibiza.
The data also shows that homes with a pool can charge a 14% rental premium.