These are the Best European Countries for a Real Estate Investment in 2024

The market in Europe is extremely dynamic and real estate is one of the most valuable assets in the world, making the investment decision consequential. What changed on the European real estate market this year? In which countries should you invest in 2024? Surprisingly, Latvia emerges as a strong investment contender today, with Ireland and Italy also showing considerable promise.

According to Evgeniy Kochman, real estate expert, there are many reasons, financially speaking, to invest in European property, as both a vacation home and potential long-term residence. 

Kochman suggests that an investor should be focused on rental yield when choosing to invest, the most critical metric for properties right now.  Given this metric, Latvia emerges as the best investment country.

By owning a property, you make an investment and have the potential to earn rental income.  Rental yield can tell you a lot about how much you will be able to earn from a property as regular income.  It is essentially the annual return, the profit, you make from an investment property.

But what is a good yield and how do you calculate it?  In basic economic terms, higher yield means better return.  The same applies for rent: rental yield compares the cash generated by a property as a percentage for the property price or market value.

The primary challenge of an investor is maximizing his rental income on the property market.  There are a number of ways to make money from rental properties, for example: minimizing rental turnover, optimizing energy efficiency, implementing dynamic pricing strategies, and reinvesting the rental income into more rental properties.  The challenge in earning a profit from a rental investment always comes back to location.  A good investor chooses not only the best property, but the best location in which to invest. 

A good investment depends heavily on property worth.  A simple calculation might illustrate the phenomenon: let’s say you receive $30,000 each year in rent and your property is worth $500,000.  Your gross rental yield is equal to $30,000 ÷ $500,000 X 100 = 6%.

Recently released data suggests that Latvia’s rental yield is 8.06%, earning it first place in this metric.  Following Latvia are Ireland at 7.85% and Italy at 7.38%.  The rental yields of the worst European countries to invest in, by comparison, are: Luxembourg at 2.67%, followed by Switzerland at 3.05% and Austria at 3.59%.^[1]

A similar calculation demonstrates the best and worst rental yields of European cities.  From a financial perspective, Dublin (with a rental yield of 7.33%), followed by Istanbul and Riga, is the most attractive European city to invest in.  The city with the lowest rental yield, by comparison, is Oslo (at 2.46%), followed by Luxembourg and Zurich.

As with most things, good investing on the European property market comes down to a strategy.  An investment property with a good rental yield, Mr. Kochman explains, might provide an investor a steady cash flow but may not have the best overall growth potential.  In deciding where to invest, rental yield can be driven strongly by occupancy rates and location, where the ideal situation would be finding a high rental yield and a high occupancy rate.  If one were to invest right now, it should be in Latvia.

*The full tables of countries and cities alongside their respective rental yield percentages, originally published in Global Property Guide, as well as by Euronews, can be seen here:

European countries best                              worst

1.     Latvia – 8.06%                                              1.  Luxembourg – 2.67%

2.     Ireland – 7.85%                                             2.  Switzerland – 3.05%

3.     Italy – 7.38%                                                  3.  Austria – 3.59%

4.  Romania – 6.63%                                        4.  Malta – 3.66%
5.  Lithuania – 6.44%                                     5.  Germany – 3.74%
6. Turkey – 6.36%                                          6.  Norway – 3.79%
7.  United Kingdom – 6.21%                           7.  Czech Republic – 3.95%
8.  Spain – 6.17%                                           8.  Denmark – 4.16%
9.  North Macedonia – 6.00%                         9.  Belgium – 4.20%
10. Montenegro – 5.95%                                10. Finland – 4.24%

European cities best                                                 worst

1.  Dublin, Ireland – 7.33%                           1. Oslo, Norway – 2.46%     
2.  Istanbul, Turkey – 6.63%                         2. Luxembourg – 2.71%
3.  Riga, Latvia – 6.46%                                3. Zurich, Switzerland – 2.79%
4.  Bucharest, Romania – 6.36%                  4. Vienna, Austria – 3.64%
5.  Podgorica, Montenegro – 5.7%               5. Valletta, Malta – 3.67%
6.  Lisbon, Portugal – 5.65%                         6. Helsinki, Finland – 3.8%
7.   London, UK – 5.59%                               7.  Berlin, Germany – 3.83%
8.  Brussels, Belgium – 5.54%                      8.  Sofia, Bulgaria – 4.04%
9.  Warsaw, Poland – 5.51%                     9.  Prague, Czech Republic – 4.05%
10. Vilnius, Lithuania – 5.47%              10. Bratislava, Slovak Republic – 4.11%

Sources:

“Rental Yields in European Cities.”  Global Property Guide.  Last updated June 2024. 

“Europe’s best and worst property markets: Where to invest in 2024?”  Euronews.  May 20, 2024. 

^[1] These and all the following percentages were published in a Euronews article entitled “Europe’s best and worst property markets: Where to invest in 2024?”  May 20, 2024.  See, also, Global Property Guide”s “Rental Yields in European Cities,” last updated June 2024. 

Photo by Brian Babb on Unsplash

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