Updated: 14 October 2025
Rental demand in Spain remains robust, especially in coastal areas and major cities. According to the Bank of Spain, rental prices have increased consistently over the past five years, with Marbella, Madrid, and Barcelona leading in rental yields.
Tourism plays a central role, as Spain consistently ranks among the top three global destinations, ensuring short-term rental demand throughout the year. Local economic recovery and international migration add further pressure to the rental market, making Spain a highly attractive investment hub.
“Spain’s tourism-driven demand ensures year-round rental opportunities.”
Which Spanish regions offer the best rental yields?
The highest rental yields are concentrated in urban and coastal regions. For instance, Valencia averages around 6% gross yields, while Marbella sees returns of 4.5–5.5% depending on property type. Madrid and Barcelona also remain strong, averaging 4–5%.
Coastal towns like Estepona or Fuengirola can deliver higher returns due to a lower cost of entry compared to Marbella while benefiting from the same holiday-driven rental demand. Investors seeking a balance between long-term stability and short-term gains often combine city apartments with coastal holiday homes.
| Location | Average Yield % | Average Price €/m² | Key Market Driver |
| Marbella | 4.5 – 5.5 | 4,800 | Luxury tourism demand |
| Valencia | ~6.0 | 2,200 | Domestic rental demand |
| Madrid | 4.0 – 5.0 | 4,100 | Professional tenants |
| Estepona | 5.0 – 6.0 | 3,200 | Holiday rentals growth |
“Valencia and Estepona lead Spain in rental yield potential.”
How do Marbella and Estepona compare for rental investors?
Marbella offers prestige and strong luxury demand, while Estepona delivers higher yields with lower entry costs. Marbella’s prime properties attract wealthy international tenants, particularly in Golden Mile and Puerto Banús. Estepona, meanwhile, has seen rapid urban development, drawing tourists looking for affordable alternatives close to Marbella.
The choice depends on investor strategy—Marbella ensures stability and brand recognition, while Estepona maximizes profitability through higher yield percentages.
| Factor | Marbella | Estepona |
| Avg. Property Price/m² | €4,800 | €3,200 |
| Avg. Rental Yield | 4.5 – 5.5% | 5.0 – 6.0% |
| Tenant Base | Luxury holidaymakers | Families, budget tourists |
| Market Image | Prestige & exclusivity | Value & growth potential |
What types of rental properties perform best in Spain?
Holiday apartments in coastal areas dominate Spain’s short-term rental sector. According to Idealista, one-bedroom and two-bedroom units near beaches achieve the highest occupancy rates. Villas with private pools also perform exceptionally well in Marbella’s luxury segment.
Urban apartments in Madrid and Barcelona benefit from long-term tenants such as professionals and students. Investors seeking stable monthly income often favor these metropolitan rentals, while those chasing higher yields prioritize vacation homes on the Costa del Sol.
“One and two-bedroom holiday units deliver the strongest occupancy rates.”
Are short-term or long-term rentals more profitable?
Short-term rentals usually offer higher yields, often exceeding 7–8% annually in high-tourism zones like Marbella, Ibiza, or Málaga. However, they also come with higher management costs, regulatory compliance, and seasonality. Long-term rentals, on the other hand, provide more stability, lower turnover, and predictable monthly cash flow.
For investors, diversification is key: combining a holiday property in Marbella with a long-term rental in Madrid spreads both risks and returns.
What regulations affect rental properties in Spain?
Spain has implemented stricter rules for holiday rentals, especially in Andalusia, Catalonia, and Madrid. Owners must register properties with local tourism boards, meet safety standards, and obtain a “Vivienda con Fines Turísticos” (VFT) license.
Failure to comply can result in fines exceeding €30,000. According to Andalusian tourism authorities, Marbella has one of the most active enforcement systems. Long-term rentals face fewer restrictions but must comply with national tenancy laws that favor tenant protection.
Key pull-quote: “Licensing is essential for short-term rentals across Andalusia.”
How do property taxes in Marbella compare to other areas?
Property taxes in Marbella are competitive compared to other European luxury destinations. Annual Property Tax (IBI) averages 0.4–1.1% of cadastral value. Estepona’s rates are slightly lower, averaging 0.35–0.95%.
For investors, this makes Marbella attractive when compared with France or Italy, where property taxes can exceed 1.5%. According to Quintessentia Property Advisors, effective tax planning through non-resident schemes further enhances investor returns.
| Location | IBI Tax Range % | Additional Notes |
| Marbella | 0.40 – 1.10 | Competitive vs. luxury markets |
| Estepona | 0.35 – 0.95 | Slightly lower than Marbella |
| Madrid | 0.40 – 1.00 | Standard capital city range |
| Barcelona | 0.50 – 1.20 | Higher due to urban density |
Is financing available for non-resident investors?
Yes, Spanish banks actively finance non-residents purchasing investment properties. Typical loan-to-value (LTV) ratios for foreign buyers are 60–70%, with interest rates starting from 3.5% depending on credit profile and property type.
Marbella attracts many international buyers from the UK, Scandinavia, and the Middle East, making local banks highly accustomed to serving this demographic. Using a mortgage can also provide tax benefits through deductible interest.
What rental income can investors realistically expect in Marbella?
In Marbella, rental income depends on property type and location. A beachfront one-bedroom apartment can generate €900–1,200 per week in peak summer season, while luxury villas rent for €6,000–12,000 weekly.
Annualized returns for well-managed properties average 4.5–6%. According to Engel & Völkers Marbella, prime Golden Mile villas enjoy the highest occupancy rates among luxury holiday rentals.
FAQ
Is Marbella still considered a safe market for rental investment?
Yes. Marbella benefits from global recognition, stable luxury demand, and limited prime land supply, ensuring long-term resilience.
What are the main risks for rental investors in Spain?
Regulatory changes, seasonality in tourism-driven markets, and property management challenges are the top risks to monitor.
Can foreigners buy and rent property in Spain freely?
Yes. Spain allows foreign ownership without restrictions, and non-residents can rent properties after proper licensing.
Are Spanish rental returns higher than in other EU countries?
Generally yes. Spain averages 4–6% yields, while France and Italy often average 2.5–4%, making Spain more attractive.
Do investors need a local property manager in Marbella?
Highly recommended. Professional managers handle licensing, guest check-ins, and maintenance, crucial for short-term rentals.
