Europe's best and worst property markets: Where to invest in 2024?

When it comes to real estate investments, rental yield - defined as the annual return from renting out a property - is a critical metric.

Higher rental yields indicate better returns on investment, crucial for any savvy investor.

To illustrate, let's break down the numbers: purchasing a property for €500,000 and earning a monthly rent of €2,000 (or €24,000 annually) results in a gross annual rental yield of 4.8%. After accounting for taxes and other administrative expenses, the net yield will be lower.

Consider Maria, an astute investor aiming to maximise her rental income in the European property market. Her primary challenge is pinpointing the best location in which to invest.

To aid her decision, let's delve into the latest data from the Global Property Guide, updated as of Q1 2024, to uncover which European countries and cities offer the best and worst property rental yields.

Latvia, Ireland, and Italy top the country list with very robust average rental yields, signalling prime opportunities for investors such as Maria. Latvia, with its rental yield of 8.06%, stands out as the highest in Europe.

If current rental yields remain stable, it would take approximately 12 years of rental income to recoup an initial property investment in Latvia. In Ireland and Italy the amount of years needed would be thirteen and fourteen, respectively.

1.  Latvia – 8.06%
2.  Ireland – 7.85%
3.  Italy – 7.38%
4.  Romania – 6.63%
5.  Lithuania – 6.44%
6. Turkey – 6.36%
7.  United Kingdom – 6.21%
8.  Spain – 6.17%
9.  North Macedonia – 6.00%
10. Montenegro – 5.95%

When narrowing the focus to European major cities, Dublin emerges as the leader with an average rental yield of 7.33%. Within Dublin, two-bedroom units represent a lucrative investment. Maria