Is it worth buying a home to rent it out?

Let's continue looking at data on housing. According to the Bank of Spain, 98.6% of rental properties are in the hands of small owners: 76.1% own one, 15% own two, 7.5% own between three and five, and only 1.4% own more than five. If we wanted to join this trend, would it be worth it?

In Barcelona, the gross rental yield over the last decade has been approximately between 4% and 5% per year. This figure does not deduct expenses or mortgage interest. Therefore, with mortgage interest rates around 3%, the margin is slim. However, there is an additional factor: the appreciation of the property. Between 2016 and 2026, housing prices have increased by approximately 53% in Barcelona city and 70% in Catalonia as a whole. If we combine rental income with this appreciation, the total return can be quite a bit more attractive and borders on 7%, after the cost of financing. Furthermore, 60% of homes are purchased without the need for mortgage financing, which increases profitability.

It is an investment that many consider safe, and historically it has only grown. But, if we do not have the capital necessary to buy a home, do we have alternatives that allow us to obtain a 7% return? Yes. A portfolio that combines fixed-income funds (government and corporate debt) with a portion of equities can also aspire to this return, without needing to concentrate such a high amount of money in a single asset.

Perhaps the question we should ask ourselves is not whether we can buy an apartment, but whether this is where we want to put all our savings, considering that we cannot liquidate just a part of it. If we need the cash, we have to sell the whole thing.