What Really Impacts the Profitability of Real Estate Investment? A Strategic Look at Currency, Location, and Demand

When considering real estate investment, it’s important to look beyond just property types and locations. Numerous factors influence the real return on your investment—especially when you start thinking globally.

Local vs. Foreign Investments: Know the Difference

The market offers a wide array of opportunities:

• Turnkey apartments ready to rent from day one
• Aparthotels and commercial properties
• Traditional second-hand flats or units from local developers

While these can be attractive, the key decision lies in whether you’re investing locally or abroad—and, just as importantly, in what currency.

Currency Matters—More Than You Think

Many European investors learned a painful lesson before 2008 when borrowing in foreign currencies like Swiss francs. The appeal of low interest rates masked the danger of currency fluctuation, which ultimately impacted the cost of repayments.

This risk primarily applies to financed investments.
When investing in cash, you have more flexibility. Still, currency exposure becomes a factor influencing profitability. For example, a weakening dollar, as some US elites (including Donald Trump) now advocate for to support exports, can erode returns in dollar-pegged economies like Asia or the Middle East.

That’s why the Eurozone remains a stable and strategic choice for European investors. Investing in real estate where your assets and income are denominated in the same currency can shield you from unnecessary financial shocks.

Not All Property Offers Are Equal

Despite the illusion of global access, most available real estate offers target tourism-oriented purchases—vacation homes, resort condos, and short-term rental properties. These don’t always align with the needs of investors seeking stable, long-term income and portfolio diversification.

When it comes to long-term rental apartments, the offer is surprisingly limited. Add to that the delay before a property can be handed over to professional management, and the process becomes difficult—if not impossible—for hands-off investors.

Yet, long-term rental investments offer some of the most consistent and crisis-resistant returns in the real estate market. Why?
Because people always need a place to live. Tourism may fluctuate. Employment centers and permanent residents do not.

Crisis-Resistant Locations: Where Jobs Go, Money Follows

It makes strategic sense to invest near major cities or economic hubs. These regions:

• Attract stable employment
• Offer reliable income streams for tenants
• Remain in high demand even during downturns

When crises hit, rural or seasonal areas are hit first. In contrast, economic centers often absorb additional demand as people move toward opportunity and security.

At the same time, geopolitical risks should not be ignored. Conflicts in Ukraine and Central Europe reduce the appeal of investment in regions like the Balkans. That’s why Western Europe—particularly regions that are economically stable, politically secure, and currency-protected—remains the safest long-term bet.

Why Valencia Stands Out

Our current investment focus reflects all of the above: Valencia, Spain.

• Located in the Eurozone
• Stable, growing economy
• A hub for major industrial and tech investments
• One of Europe’s top ports (6th largest)
• Shielded from energy crises due to diversified supply chains
• Far from geopolitical hotspots and vulnerable regions

What makes Valencia particularly attractive is its unique positioning:
It is not only an industrial and academic center but also home to the largest number of Erasmus students in Europe. That’s a powerful signal for long-term rental investors, as student housing offers high, recurring demand for 6–12-month leases—often more profitable and stable than tourist rentals.

Final Thoughts: Where Security Meets Opportunity

Valencia is a region where the euro, European Union membership, strong economy, and global connectivityconverge.
It’s resilient to crises, ideal for long-term rentals, and offers a healthy balance between appreciation potential and passive income.

At the end of the day, you want to invest where there’s demand, security, and growth—and that’s exactly what Valencia offers.

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